G4S PLC (LON:GFS) shares plummeted as the British security services group lowered its revenue growth outlook for the rest of the year following a flat performance in the Middle East and India.
The company now expects 2017 organic revenue growth of between 3% and 4% and “good” profit growth, after predicting a revenue increase of 4% to 6% earlier this year.
G4S said trading for the first nine months of the year was in line with expectations. Organic revenue rose 4.4% during the period with growth across all regions apart from the Middle East and India.
Shares dropped 5.44% to 264.40p in early trading.
Nevertheless, bid and pipeline contract wins were “encouraging”, G4S said.
Systems and technology-enabled security continued to gain traction in key markets and accounted for mnore than £1.7bn in annualised revenue, up from £1.5bn December, the company added.
The retail cash solutions continued to receive a “positive market response” as we extended sales and marketing across North America, Europe, Africa, Middle East and Asia.
"The company has flagged tough comparatives in 4Q and therefore now sees fiscal year organic growth at 3-4% (vs. consensus at 4%) which would imply a further small deceleration to 0.6% in 4Q at the mid-point," said UBS.
"However, good progress on margins should limit consensus downgrades on an EBITA level with FY consensus at £507m unlikely to move much."
The group, which provides outsourced services such as guarding, aviation screening and mobile patrols, has been reducing its dependency on Britain after it overstretched on loss-making government contracts and its main driver of growth is now the US.
Earlier this year G4S also ran into troubles when the head of a one of its immigration units in Britain resigned following allegations of abuse at the centre.