G4S posts higher profit as revenue slips

Saleha Riaz
·1-min read
For the first nine months of the year, G4S retained and won contracts with an annual revenue contract value of £2bn. (AP Photo/Wilfredo Lee)
For the first nine months of the year, G4S retained and won contracts with an annual revenue contract value of £2bn. (AP Photo/Wilfredo Lee)

UK security firm G4S (GFS.L) said profit for the first nine months of 2020 was ahead of last year thanks to cost-cutting efforts, despite a slight slip in revenue.

“Group revenues were just 2% 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,” it said in a statement.

READ MORE: G4S gets bid from US rival as it fends off £3bn GardaWorld takeover

The company said its underlying earnings for the first nine months of the year, during which it has retained and won contracts with an annual revenue contract value of £2bn ($2.6bn), are ahead of 2019.

G4S Group CEO Ashley Almanza said: “The benefits of our strategy, strong execution and rapid response to Covid-19 continue to be reflected in the Group’s results during 2020 with resilient revenue, earnings and cash flow.”

Chart: Yahoo Finance UK
Chart: Yahoo Finance UK

G4S is facing a £3bn hostile approach from Canadian firm GardaWorld, which it has branded “unattractive and opportunistic.” It has also received an expression of interest about a possible bid from Allied Universal Security Services.

The British company is the biggest security firm in the world, with about 530,000 employees across 85 countries, providing guarding to embassies, prisons and justice services, sports stadiums and music events.

In July, it announced that it could axe up to 1,150 jobs at its UK cash business after the coronavirus lockdown saw an increased shift to digital demand. It had already sold most of its US cash operations to Brinks in February 2020.

WATCH: What is the new job support scheme?