It has been a dire first half of the year for security giant, G4S Botswana. The company has seen its stock tumble from being a star performer two years ago to become one of the few kissing the bottom of the barrel this year.
According to the interim results published Friday, G4S has made less than 2 per cent revenue growth in the last six months. This marginal growth was largely realised from the Facilities Management Services (FMS) business which the group acquired in 2012. The FMS business buyout was highly controversial as the Competition Authority refused G4S the opportunity to buy a company that had facility management, cleaning services and a security division; Shield Security. The Authority deemed the purchase of the latter as anti competitive. G4S’ net earning tanked on a year to date basis by a staggering 35 per cent.
While this is a bad showing for the company, the newly appointed Managing Director, Michael Kampani believes that they have hit rock bottom and the only way to go was ‘up’. “Our results have not been so great in the interim and the previous full year, however, we are confident with our turnaround strategy that will see us do much better in second half,” Kampani said during the release of the results.
Some of G4S’ main competitors, Security Systems and Manned Security have not seen much growth.
Kampani, who was appointed just over a month ago said the company’s problems stem from the duration of the acquisition which was complicated and took longer than expected, and a general loss of focus as the company took ‘its eye off the ball’. He said while these results have been bad, they have in no way affected delivery and service to their clients.
“We have a turnaround plan for revenue growth, profit growth and customer service,” he said. Firstly, they will implement an in house strategy which will be meant to realign the Botswana service standard with that of other players worldwide. He said on the business growth side, “there are a lot more synergies we can realise from the facilities management division to grow the company.”
Kampani said while they are optimistic about their prospects, they need to get their prospective clients to know that they are not just a security company but a diversified group.
The group is performing badly on the Botswana Stock Exchange at a 25.3 per cent lower year to date. It leads the pack of recent bad performers, which amongst others include Wilderness at 24.1 per cent, Imara and Barclays at 23.7 and 11.3 per cent respectively.