In our view, the comments imply mid single digit downgrades to consensus earnings. Margin compression and weaker organic growth are usual at the end of economic downturns, especially for low beta stocks, which have held up reasonably well in the early stages of the decline.
GUY HEWETT ESPIRITO SANTO
We believe G4S’s developing market business and UK outsourcing business still represent a good growth opportunity for the business. However, we still expect margin pressure to be sustained across the remainder of the business, particularly in manned security.
MIKE ALLEN PANMURE GORDON
Pricing pressure in Europe is not new, along with the phasing of UK government contracts, but the issues in the Netherlands coupled with charges in Africa suggests pressures are now more wide ranging across the group.