Group margin at multi-national security contractor G4S was down around 0.6 per cent due for the three months to March 31, the firm reports. The firm puts this down to what it terms ‘continued challenging economic and trading conditions in Continental Europe, ongoing pricing pressure in the UK and Ireland cash solutions businesses, the mix effect of new contracts starting up in UK Government and the impact of a £6m charge in the African region relating mainly to the write-off of receivables’.
A proposed closure of 30 prisons and other cost reductions by the Netherlands Ministry of Justice will have a significant negative impact on the group’s Dutch business which provides staff to the prisons. For all of these reasons, and despite business improvement plans, the first quarter margin trends are expected to continue for the full year.
In the first three months of 2013, overall revenues compared to the same period last year, grew by 7.5 per cent at constant exchange rates and by 7.7pc at actual exchange rates. The group operating margin was around 0.6pc lower compared to the same period in 2012. The company did point to overall organic growth at 6pc, which broke down to 12pc in developing markets and 4pc in developed markets . In its secure solutions arm, organic growth was 6pc, helped by a continued strong performance in developing markets and UK government. And in cash solutions, organic growth was 3pc overall. Again, developed markets did less well than developing markets; in the developed world it declined 1pc while developing markets grew 14pc.
