logo-loader

Shares in G4S jump after positive update

Published: 14:35 09 May 2016 BST

G4S-Security---cash-in-transit-armoured-vehicle-(5)-001
G4S had no new onerous contract charges or impairments in the three months to the end of March

Shares in G4S PLC (LON:GFS) were on track for their best daily performance in about five years on Monday after the troubled security company issued a positive trading update.

The stock motored 6% to 195.4p as G4S said it was on course to end a number of loss-making UK public service contracts.

There were no new onerous contract charges or impairments in the three months to the end of March  and onerous contract costs were within the group's provisions for losses on these contracts, it said.

It also announced higher profits and contract wins since the start of the year worth a total of £950mln.

G4S faced severe criticism over its failure to supply enough security staff to the 2012 London Olympics and was also embroiled in controversy over a government prisoner tagging deal.

The problems sparked the departure of former chief executive Nick Buckles, who was replaced by Ashley Almanza.

Almanza said: "Against a backdrop of macro-economic uncertainty, G4S had a positive start to the year. We continued to implement our strategy to transform the group’s focus and performance and this is reflected in our revenue growth and improving profit and cash generation."

Continuing businesses had revenues of £1.5bn (Q1 2015: £1.4bn), 4.5% higher than the first quarter of 2015.

Revenues from onerous contracts were £55mln (Q1 2015: £46mln) and portfolio businesses had revenues of £186mln (Q1 2015: £218mln).

Pre-tax profits before interest and amortisation rose 6.5%, excluding restructuring charges of £1mln (Q1 2015: £1mln) and £1mln profit (Q1 2015: £4mln) from portfolio businesses being sold or closed.

Brokers welcomed the update. JPMorgan said it “reads reassuringly” and Citigroup said the group was still on track for full-year consensus profits of about £430mln.

Caledonia Mining tackles 2023 challenges with optimism for 2024 as it...

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) chief executive Mark Learmonth tells Proactive's Stephen Gunnion the company faced a challenging 2023, primarily due to poor production in the first half of the year at its core asset, the Blanket Mine in Zimbabwe, and an underperformance...

1 hour, 43 minutes ago