Security services group G4S expects to benefit from increased government outsourcing in 2010 and beyond after 2009 profit beat expectations, helped by growth in new markets and at its public sector unit.
“With the fiscal constraints imposed on the British government the opportunity is there for us to help them reduce their costs,” chief executive Nick Buckles said. “We grew our UK government business by 16 per cent last year – it normally grows by around 10 per cent – and there’s no reason why 2010 cannot be similar and 2011 even better.”
G4S, which provides services ranging from cash transportation and facilities management to security and protection, said its pre-tax profit rose 20 per cent to £417.1m for 2009 on revenue 18 per cent higher at £7bn.
Market expectations for 2009 pretax profit had ranged from between £293m and £416m, with the consensus at £372.6m.
The company, which with 595,000 employees claims to be the biggest private-sector employer in the world after US supermarket chain Wal-Mart, said it would pay a final dividend of 4.16p, making a total dividend of 7.18p, 11.7 per cent up on last year.
G4S delivered strong growth in Africa and the Middle East, helped by contract wins at Baghdad International and Qatar airports, the FIFA Club World Cup soccer tournament in the UAE and oil and gas related contracts in Papua New Guinea.
Evolution analyst Graham Brown said: “2009 organic revenue growth of 3.7 per cent versus 4.2 per cent for the first nine months implies about 2.2 per cent in Q4.”. However, the Anglo-Danish company said it expected organic growth in 2010 to be broadly similar to 2009.
G4S , formerly Group 4 Securicor, will spend its usual £100m-£150m on acquisitions this year, said Buckles.
City A.M. Reporter