G4S 2014 Interim Management Statement
G4S, the leading global integrated security company, reports today on trading and financial performance from 1 July to date and provides an overview of financial performance for the nine months ended 30 September 2014. This Interim Management Statement has been prepared following the adoption of IFRS10/11 effective 1 January 2014.
All figures and commentary are stated at constant exchange rates.
Financial performance for the nine months to 30 September was in line with our plans. Organic revenue growth, compared to the same nine month period last year was up by 4.2%. We continued to invest in organic growth and we have won new contracts with annual revenues of over £870 million and total contract value of £1.7 billion. Contract retention for the nine months was similar to historical levels, at slightly above 90%. Notwithstanding very high pipeline conversion, we ended the period with a sales pipeline of £5.1 billion.
The benefits from our programme of corporate transformation resulted in underlying PBITA and earnings growth ahead of revenues, with the half year improvement in profits continuing into the third quarter and expected to continue for the full year. Operating cash flow for the nine months also improved compared with last year.
Emerging markets’ organic revenue growth for the nine months was 11% compared with 2013. Developed markets’ organic revenue growth for the same period was 1%, with a continued strong performance in the North American business of 6%, partially offset by a 1% decline in the UK and Europe.
In the third quarter we signed a binding sale and purchase agreement (SPA) for the sale of our US government solutions business for $135 million, comprising cash proceeds of $80 million and retained receivables of $55 million. The retained receivables are expected to be collected within 18 months of completion. The binding SPA is subject to customary closing conditions and the sale is expected to complete by the year end.
Commenting on current trading and outlook, Ashley Almanza, Group CEO, said “We are executing a clear and focused strategy which is delivering tangible benefits. Our trading performance is in line with our plans, reflecting double digit revenue growth in emerging markets, the return of strong growth in North America and, as expected, a 1% decline in revenues in the UK and Europe. Our trading performance in 2014 and the on-going implementation of our performance improvement plans are expected to provide good momentum for the group in 2015”.