Expect more acquisitions by G4S, according to the security company’s 2007 report.
The report spoke of ‘developing our senior management population’ and ‘acquiring businesses and individuals who bring expertise to the organisation’’. The firm spoke of a a growing trend of pricing pressure in core basic services and a demand from customers for G4S to take a broader role in managing their risks. The company spoke of offering risk assessment and consulting; and of becoming a partner with its customers, in long term contracts. The report described the outlook as good and was ‘not expecting the recent economic uncertainties to impact [our] ability to continue to deliver strong results performance’.
G4S chief executive Nick Buckles said: “The basic elements of the strategy which resulted from this review include a need to add value to the core services that we already provide by taking a greater role not just in specialist security areas, but in total outsourcing of the management of environments where security and safety is key.” As for this country, according to the report: “There was good organic growth of 6pc in the UK & Ireland and margins remained strong at 8.2pc. Customer retention rates in the security business were high at around 95pc and there were a number of significant contract wins in the year. A new contract to assist passengers with restricted mobility at London Gatwick Airport will commence in April 2008.” While the UK and US are named as key areas, so are developing countries such as India, where the coimpany reported a growth of around 28pc and strong margins. “G4S is the second largest private employer in India and we have recently won contracts for security at four airports in Delhi, Mumbai, Hyderabad and Cochin.”
As for the cash services side of the business, in the UK & Ireland “there was solid revenue growth and positive margin enhancement as a result of strong performances in the ATM and cash management businesses. In the last quarter of 2007, the UK business won a substantial contract with HBOS for out of hours bank branch servicing and it continues to win business from competitors as they cope with operational issues. In Ireland there was good growth and margins should improve in 2008 due to the implementation of a post office outsourcing contract.”
