Security giants G4S releases unpleasant results

Botswana Stock Exchange listed security company G4S on Friday released its financial results for the year ending December 2013 with a marginal revenue growth of  only 0,7 percent (P187million to P188,2million) which the company attributed to challenging market conditions. 



The slight profit growth was driven by Systems and Facilities Management.


The company’s net earnings attributable to equity holders was 31,9 percent lower than for the corresponding period in 2012. This was due to the subdued revenue growth, increases in the impairment for trade receivables, one-off costs associated with restructuring of the business and a decline in investment income following the acquisition of the Facilities Management business in 2012.



The company’s Managing Director Michael Kampani commented at the press briefing on Friday that, although the profit was lower, they were on the right track.


“We have enough cash to meet our investment needs for 2014. Competition is there and has been growing on the guarding side. Our guarding last year did not grow much because sales approach did not yield as expected. I would not blame our financial performance on the competition though,” he said.



The company has declared a total dividend of P7.06 per share a value of P5, 6million, of which half (P2, 8million) of it has already been paid as an interim dividend according to Kampani. He explained that the company was not experiencing cash flow problems hence the paying of the dividends



“Our market share has become stable we remain strong on the market at 80 percent. We need to be more aggressive, to go out and sell, and at the same time we have to be more flexible in pricing. We need to be responsive to what the customers want. There is proliferation of guarding companies; there are about 700 of those and the major players take about 30 percent of the market share. We are not chasing market share but growth and hence becoming profitable and return investment to the shareholder.”



The company Director however indicated that, they foresee good opportunities in the cleaning business in 2014.


G4S finished the year with no Finance Director in place and the credit control department had undergone retrenchment, as a result, some customers defaulted for more 3 months something Kampani said was not ideal. He however gave assurances that their debt shall be significantly contained in 2014 as measures are already in place to deal with the challenges.