G4S to close the year on a low

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Security services giant, G4S is set to end 2013 on a miserable note. The stock is the worst on the local bourse so far this year, with share value down by 45.7 per cent to 315 thebe from a high of 585 thebe. Investors have remained jittery with the once high flying company as it has been besieged by fierce growing competition and high running costs. Its highest cost was the acquisition of FMG that took a toll on the company’s balance sheet.

According to Black-thread market analyst, Karabo Tladi, “Investors continue to offload G4S shares following disappointing interim financial results. The counter is currently trading at its lowest in 52 weeks.”
Amid the tumble that the company has been experiencing, G4S appointed a new Managing Director, Michael Kampani, earlier this year. According to Tladi, investors are pinning their hopes on the new man at the top, anticipating a change in fortunes of the business going forward. “The new business that the group acquired (FMG) last year is yet to add shareholder value. The business has destroyed value, with earnings dropping significantly,” Tladi noted.

Speaking at the release of the company’s interim results two months ago, Kampani said that the company will be going through a streamlining process in the difficult times. He told the media in November that G4S would be going through a staff retrenchment process.
Barclays Bank is another Botswana Stock Exchange listed company that has been sailing in rough seas this year. The bank has one of the worst performing stock on the local bourse with trading value down 15.7 per cent so far this year to 552 thebe.

According to Tladi, Barclays has been on a losing streak lately since the announcement of its poor interim results. He said the once leading bank in Botswana is losing its market hold to competitors, “the bank is losing ground to FNBB which continues to lead the market with technology and innovation. FNBB is the only bank of the market so far that is able to cover its opex (operating expenses) with non-interest income. Barclays has a lot of ground to make up with respect to technology and innovation.”

Newly appointed Managing Director, Reinette Van Der Merwe, who was unveiled to stakeholders two weeks ago, has been given an initial three-year contract by the board to get the bank profitable again and enhance its ability to compete.