G4S forecasts full-year drop in margins

Suzie Neuwirth

OUTSOURCING firm G4S today announced that its operating margin had dropped 0.6 per cent in the first quarter and expects the decline to continue for the full year.

The company said that the year-on-year decline was due to challenging market conditions in Europe, on-going pricing pressure in the UK and Ireland cash solutions businesses and a £6m charge in Africa relating to the write-off of receivables.

The proposed closure of 30 prisons by the Netherlands Government will impact the group’s Dutch business which provides staff to the prisons.

However, organic growth was six per cent, due to stronger performance in developing markets.

“The macro-economic environment has affected developed markets margins and, despite active business improvement plans which are being implemented, group margins are expected to continue to be impacted adversely in the short term,” said G4S.