G4S showed resilient performance in months before £3bn takeover bid
21 September 2020, 11:24
The company’s shares dropped by more than 2% on the news.
Security group G4S has revealed its revenues have been “resilient” in the first eight months of the year as the business is locked in a potential hostile takeover battle with a Canadian rival.
The business said its revenues were just 1.9% lower compared with the same period in 2019, and the drop has been “more than offset” by controlling costs.
“As a result, the group’s underlying earnings which were in line with 2019 at the six months stage are now ahead of the prior year for the first eight months of 2020,” bosses said in a statement.
Chief executive Ashley Almanza said: “G4S today is a focused global business delivering technology-enabled security solutions. The benefits of our strategy, strong execution and timely response to Covid-19 continue to be reflected in the group’s results during 2020 with resilient revenue, earnings and cash flow.”
Last week, bosses at G4S told suitor Gardaworld to go back to the drawing board, rejecting a £3 billion takeover offer floated by the Canadian security company.
But Monday’s announcement might undermine the board’s argument that Gardaworld is undervaluing the business.
Its shares fell by 2.3% to 189p after the announcement, just one pence below Gardaworld’s potential offer.
Gardaworld needs to make a solid bid by October 12.
G4S said: “Following a strong performance in the first half of 2020, the group’s revenues have remained resilient through the first eight months of the year.
“Secure Solutions revenues, which account for 93% of group revenues, were broadly in line with 2019.
“Group revenues were just 1.9% lower overall and this was more than offset by tight direct and indirect cost control and reduced interest costs, the latter reflecting both refinancing benefits and the group’s improving net debt position.”
Gardaworld said: “This is a management team that has simply run out of ideas. Covid has generally been positive for businesses like this and yet they use it as a fig leaf to disguise their own failings.”
