G4S has said it will spin off its cash handling business, a move which could see its armoured vans come off British streets, as the UK contractor posted a fall in pre-tax profit in half-year results today.
The firm will now focus solely on its security business, through which it runs prisons and detention centres across Britain.
G4S’s statutory profit before tax fell to £108m in the six months to 30 June, down from £142m a year earlier.
Its revenue rose, however, reaching £3.8bn in the second half compared to £3.7bn in the same period in 2018.
G4S’s earnings per share fell to 3.8p from 6.8p a year previously.
Its operating cash flow also fell to £189m in the second half from £251m a year earlier.
Why it’s interesting
The sight of G4S’s blue armoured vans transporting cash around the country could become a thing of the past as it turns to focus on its security operations.
Its cash solutions business, which includes a network of cash machines, contributed under a fifth of revenues in 2018.
The move follows the launch of a review in December 2018 into separating its two main businesses. G4S said it has received a number of unsolicited expressions of interest from third parties to acquire parts or all of the cash solutions businesses.
What G4S said
Chief executive Ashley Almanza said: “Our separation review is now complete and the board has approved the separation of cash solutions from the group. As a result, we have set in train plans for the demerger of cash solutions in the first half of 2020.
“We believe that this will create two strong, focused businesses each with the clear potential to capitalise on market leading positions and to unlock substantial value for customers, shareholders and employees.”
On the financial results, he said: “In the first half of this year, our improving sales performance in both secure solutions and cash solutions saw the group deliver underlying revenue growth of 4.7 per cent. This growth together with new contract wins, supports our medium-term revenue goal of four to six per cent per annum.”
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