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G4S to benefit from Trump's military spending plans as it reports full year earnings

US President Donald Trump's plans to increase defence spending may lend support to G4S while The Restaurant Group's new chief executive has plenty of work ahead after its struggles

Trump
Trump's military spending pledge to help G4S

Security services group G4S plc (LON:GFS) reports its full year results tomorrow with a key focus on how it may benefit from the new US administration’s pledge to boost military spending.

US President Donald Trump has said he plans to increase defence spending by a record US$54bn, which could lend support to the company’s results once the money comes rolling into the sector.

Deutsche Bank said the US has been a main driver of growth for G4S and sees continued demand in security. The US division is also likely to be supported by the group’s Cash 360 system, machines that reduce the risk of theft by cashiers at the till. The smart safes have been used by Walmart, Center Parcs, and Crowne Plaza hotels.

Deutsche Bank has estimated a 5.5% organic growth in North America for fiscal year 2017.

For 2016 the bank sees underlying earnings (EBITA) of £454mln, broadly in line with the consensus forecast, compared to £385mln the previous year. It expects organic growth of 5.9%

Elsewhere, The Restaurant Group plc (LON:RTN), is expected to report a decline in full year earnings amid a fall in visitors and fierce competition.

In a pre-close trading update in January, the owner of Frankie & Benny’s and Garfunkel’s restaurants said like-for-like sales dropped 5.9% in the fourth quarter due to challenging trading conditions.

Numis has pencilled in pre-tax profit of £77.1mln, down from £86.8mln the previous year, along with an unchanged dividend. However, the broker believes the focus will be on current trading and plans for the group’s turnaround under Andy McCue, who was appointed chief executive in September. 

Significant announcements expected

FinalsAdmiral Group PLC (LON:ADM), Cairn Energy PLC (LON:CNE), CLS Holdings PLC (LON:CLI), Dignity PLC (LON:DTY), Foxtons Group PLC (LON:FOXT), G4S PLC (LON:GFS), Hill & Smith Holdings PLC (LON:HILS), Legal & General Group PLC (LON:LGEN), Lookers PLC (LON:LOOK), Loopup Group PLC (LON:LOOP) , NMC Health plc (LON:NMC), PageGroup PLC (LON:PAGE) , Restaurant Group (The) PLC (LON:RTN), Stock Spirits Group (LON:STCK), Tyman (LON:TYMN), WANdisco (LON:WAND), XP Power Ltd (LON:XPP)

InterimsCeres Power Holdings PLC (LON:CWR)

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