G4S plc Q1 2019 Trading Update
Commenting on first quarter trading, G4S Group Chief Executive Officer, Ashley Almanza said:
“Our sales wins in the second half of 2018 provided a good start to 2019 and the Group’s revenues were 4.8% higher than the first quarter of last year, with growth in all regions and divisions. This momentum, together with growing technology-enabled services in both our cash and security businesses, underpins a positive outlook for the Group.
“We continue to make good progress with our separation review with the aim of establishing two strong, independent businesses that are able to take advantage of their market leading positions and excellent service offerings for the benefit of customers, employees and shareholders. The Board believes that a separation has the clear potential to unlock substantial shareholder value.”
Group Revenues were 4.8% higher than the first quarter of 2018, with growth in both Secure Solutions and Cash Solutions. As previously reported, during the second half of 2018 we renegotiated shareholder agreements in certain businesses, increasing our revenues, with no incremental investment, and this contributed 0.4% to Group revenues in the first three months of 2019.
Secure Solutions revenues were 4.9% higher with strong growth in Africa (9.3%) and in the Americas (8.5%). Revenues in Asia grew 3.4% and our Europe & Middle East region returned to growth with revenues up by 1.1%. The continuing development and deployment of our technology-enabled solutions across G4S’s unmatched global market footprint is providing customers with tangible benefits and is having a positive impact on our sales wins and contract retention.
Cash Solutions revenues increased by 4.4%, with our market leading North America Retail Cash Solutions business growing revenues by over 30%. We launched a new retail software and service solution for the multi-store small-box retail segment where we see an exciting opportunity to enhance the efficiency and control of cash management for customers. We continued to successfully mobilise a multi-store big-box contract across the USA which we won in the second half of 2018 and we have a large pipeline of opportunities in both the big-box and small-box market segments. Global Cash solutions revenues excluding North America Retail Cash Solutions rose by 1.6%.
During the first quarter the Group disposed of a parking management business in Estonia and realised disposal proceeds of £5 million. This business was included in underlying results in 2018 and had full year revenues of £6 million and PBITA of £1 million in 2018.On 9 April 2019, Standard & Poor’s re-affirmed the Group’s credit rating as BBB- with a stable outlook.
Results for the six months to 30 June 2019 will be published in August 2019.