Citizen Empowerment Drive Affects G4S

Due to the advent of citizen economic empowerment, the security company has evidenced a notable performance shortfall


The rapid upswing in start-up security businesses in Botswana due to citizen economic empowerment has resulted in a notable performance shortfall for security solutions company, G4S (Botswana) Limited, Managing Director Mokgethi Magapa has said.

In the G4S Botswana 2019 annual report, Magapa says the company was able to access only 40 percent of the total market share not reserved for 100 percent citizen owned entities.

To worsen their plight, additional entrants were observed in the cash-in-transit and cash management businesses, a development that increased competition and aggressive, albeit unsustainable, pricing models.

The G4S Botswana MD also notes that the company was swamped with cancellation of contracts in the cleaning business driven by citizen economic empowerment that calls for the contracting of 100 percent citizen owned businesses in this arena. The cleaning business of G4S is 51% citizen owned and 49% owned by G4S PLC.

The cancellation of contracts was also felt in the G4S Facilities Management business unit after two major contracts were cancelled in 2019. However, the lost revenue due to the cancellation was stabilised by the reduction in profit losses that came as a result of those two contracts.

This is a company whose profit declined from P29.5 million in 2018 to P20.1 million for the period under review while revenue increased by a mere 0.15 percent from P206.1 million in 2018 to P206.4 million in 2019.

Even so, amid the adverse market conditions, Magapa says companies are increasingly beginning to view risk and security as an integral cog and strategic lever to be used in their operations with a direct effect on their bottom line. “This presents an opportunity for growth and increased integration for our business sector,” he notes in the results.
The MD notes also that G4S has not been spared the adverse effects of COVID-19.

“We have been faced with the inability to train staff due to restrictions as well as a drop in demand due to Coronavirus-related losses experienced by our target audience,” he says. “To reconcile, G4S has turned to reviewing direct costs to ensure that the limited revenue that is received is not offset by associated escalating costs.”