G4S plc Trading Update
GROUPOrganic revenue growth was 4.3% for the third quarter and 4.2% for the first nine months of 2019. Revenue growth was 4.9% for the third quarter and 4.7% for the nine months.
The Group produced good overall growth of 4.3% in Secure Solutions, with organic growth in security
revenues of 4.9%, partially offset by 3.2% lower revenues in our ancillary care and justice services.
We continued to deliver strong organic growth in the Americas (+9.9%) and Africa (+5.9%) driven by our technology solutions, with improved momentum in Asia (+5.3%), partially offset by a 1.8% decline in Europe reflecting commercial discipline in contract bidding.
We continue to invest in our sales and marketing capability to support our growth strategy. As previously reported, we are also investing in additional mobilisation resources to support the strong growth being achieved in the Americas, Africa and Asia.
Organic revenue growth was 4.1% with continued strong growth of 21% in Retail Cash Solutions North America and growth of 1.8% in the rest of the cash solutions business.
Earlier this year we launched a new offering in the small box segment and in October, we signed a 5 year contract with one of the world’s largest convenience store chains for several thousand stores, initially in the United States. This is the largest single small box contract signed in 2019, bringing our total small box sales to over 6,450 stores in 2019, much of which will be rolled out in 2020. This validates the strong customer value proposition of our new solution and provides confidence in the substantial growth potential in the small box market segment. In North America we now have an installed or committed base of over 15,800 locations of which 7,700 are large box.
We continued to make good progress with preparations for the demerger of Cash Solutions in H1 2020. We believe that this will create two strong focused businesses each with the clear potential to capitalise on market leading positions and to unlock substantial value for customers, employees and shareholders. At the same time, we continue to evaluate unsolicited third party proposals which may provide an alternative to the demerger, although no assurance can be provided that any such proposal will lead to a transaction.
DEMERGER OF CASH SOLUTIONS
FX MOVEMENTSRecent sterling strength means that applying October 2019 closing rates to underlying results for the nine months ended 30 September would result in a reduction in revenues of 2.0% and reduction in adjusted PBITA of 2.1%.
We expect our organic growth momentum to continue into the fourth quarter of 2019. To sustain strong revenue growth, we will continue to invest in additional sales and business development resources and mobilisation capacity. These investments, together with our productivity programmes, sales pipeline and our technology strategy provide good foundations for further progress in 2020.
The Group will announce FY 2019 results on 12 March 2020. *
* (NB: Updated financial calendar announcement 12 December 2019 - FY 2019 Results will now be on 11 March 2020)