Outsourcing firm G4S has reported a pre-tax profit of £148m for 2014 – up from a loss of £190m the previous year. Revenue climbed 3.9 per cent to £6.7bn while earnings per share increased to 13.6p from 12.9p.
Profit before interest, tax and amortisation was in line with City estimates at £424m – 7.9 per cent higher than 2013. G4S has upped the amount of money set aside to compensate the UK government by £45m.
Why it's interesting
G4S has been plagued with scandals and was forced to pay a heavy price last year. In March 2013, it was forced to repay £108.9m to the government after it emerged the company had been overcharging the taxpayer by using security tagging on prisoners who were either dead or in jail. G4S had previously been criticised for failing to provide enough security guards for the 2012 Olympics.
In April, G4S was permitted to start bidding on UK government contracts again after it had been blocked last year, securing a £4m contract to provide management services to HM Revenue & Customs worth £4m later that month. But after a long struggle the company managed to return to profit in the six months to June. G4S was upgraded by Deutsche Bank to a "hold" on Monday.
What G4S said
Ashley Almanza, Group chief executive officer, commented:
The group made good progress with its strategic plan, delivering commercial, operational and financial progress during 2014. This is reflected in a 7.9 per cent increase in underlying PBITA, a 11.7 per cent increase in underlying earnings and a 25 per cent increase in cash flow from the group's operating businesses.
The group's progress and prospects are reflected in the Board's recommendation to increase the final dividend by five per cent. There remains much to be done to realise the full potential of our strategy and we expect to make further progress in 2015."
G4S has enjoyed a significant rebound since the dark days of 2012. The company has sold off eight businesses and shut down 43 subsidiaries. The group underperformed in some areas today, recording lower revenue and emerging markets growth than some had been expecting.