Britain's G4S posted an 8.2 per cent rise in first-half core earnings on Wednesday and maintained its dividend, sending its shares 7 per cent higher as the group said it was making "substantial" progress in its turnaround plan.
Shares in the world’s largest security firm jumped on relief that the dividend – seen as vulnerable by some analysts – was maintained at 3.59 pence per share.
The company, which runs services ranging from moving cash for companies to protecting ships, is selling weak businesses under a restructuring programme as it attempts to recover from a string of high-profile contract problems in Britain.
Brexit vote impact
Analysts had feared that the group would be hit by Britain’s vote to leave the European Union, a more sluggish economy and a fall in the value of the pound making its debt in foreign currencies more expensive to service. The UK alone accounts for around one fifth of G4S’s revenues.
The company cut debt to 3.2 times core earnings (before interest, taxes, depreciation and amortisation) from 3.3 times at the end of 2015, and said debt reduction remains one of its priorities. It said it was able to whittle down debt thanks to strong cash flow, offsetting the impact of weaker sterling on euro and dollar-denominated debt.
Group revenue rose 5.1 per cent.
Results were in line with expectations, with core earnings of £199 million landing within a forecast range of £185 million to £205 million. – (Reuters)
