New G4S boss seeks billion dollar makeover
By Neil Maidment, ReutersLONDON -- G4S, the world's largest security services firm, plans to raise about 600 million pounds (US$932 million) by selling shares and assets as its new boss seeks to restore its battered reputation by cutting debt and focusing on emerging markets.
August 29, 2013, 11:37 am TWN
Chief Executive Ashley Almanza, a former executive at oil and gas firm BG Group, was promoted from finance chief in June after a string of blunders by his predecessor, including a failed takeover bid in 2011, a botched contract to staff the 2012 Olympic Games and a profit warning in May.
He said on Wednesday he would give a detailed plan in November, but that the initial measures he was putting in place should help to avoid a costly credit-rating downgrade, improve profit margins and start to deliver tangible benefits in 2014.
Panmure Gordon analyst Mike Allen welcomed Almanza's debut announcement as chief executive. “We applaud the quick work undertaken by management to re-structure the group and shore up the balance sheet,” he said.
G4S, which runs services from managing prisons and transporting cash to guarding the Wimbledon tennis championships, aims to benefit from a trend among cash-strapped governments and businesses to outsource security work.
However, it has come under pressure as governments in developed markets in particular have cut back services.
The company said its first-half operating profit margin slipped to 5.5 percent from 5.9 percent in the same period last year, reflecting a lost prison contract in the Netherlands and squeezed pricing in Britain and elsewhere in Europe.
Net debt rose to 1.95 billion pounds as of June 30, some 3.2 times earnings before interest, tax, depreciation and amortization compared with a target of 2-2.5 times.