Here is another British company that is increasing its bet on emerging markets. With 29 per cent of group revenues already coming from EM, security company G4S on Tuesday set a target of 50 per cent by 2018.
With 625,000 staff already on its books, we will be seeing a lot more of those black-uniformed security men with the G4S logo on their chests in India, China and Middle East.
As G4S (GFS:LSE) reported in its latest half-year results, 29 per cent of group revenues of £3.76 billion in the six months to the end of June came from EMs. Pre-tax interim profits totalled £149 million, compared to £142 million in the first half last year.
The shares rose nearly 6 per cent as investors generally welcomed the news. Guardian Stockbrokers said in a note:
Positive numbers from G4S which shows an impressive forward looking pipeline, lower tax charge, EPS ahead of consensus, dividend increase, defensive characteristics which is encouraging given the recent market turmoil.
With concerns still on the horizon on global economic growth focus is yet again on emerging markets and this is why G4S looks like an interesting play with EM expansion ahead of target.
The group’s chief executive Nick Buckles expects 50 per cent of G4S revenues to come from new markets by 2018.
As the FT’s Mark Wembridge reports, Buckles sees the company expanding further in South America and Asia. “Just by the nature of the fact that new markets are growing strongly, we expect to grow organically,” Buckles told a conference call. “We would be focusing a chunk of our acquisition spend on new markets, so we are currently looking at places such as Brazil, Ecuador, Thailand, Malaysia and South Korea. The market growth itself and our positions in those markets will generate a big chunk of our business by 2018.”
With incomes growing in emerging countries, the move makes sense. G4S has done well with its strong international brand name in regions where local security companies often have a poor image associated with the criminal underworld.
G4S scored several contracts in emerging countries in the past few months. Manned security for ING in Turkey, the Hactl SuperTerminal in Hong Kong (the world’s busiest cargo airport) and high-profile jobs with the US embassy in Afghanistan and the southern oil fields in Iraq are amongst many that will make G4S’s name in EM even bigger.
But although the growth of the company is increasingly fuelled by its EM operations, it comes at certain costs. G4S took a hit during the Arab Spring, when Saudi Arabian government requested the company to pay a special “social unrest” bonus to all its employees, which did take its toll on the company’s half-year results.
Source: http://blogs.ft.com
With 625,000 staff already on its books, we will be seeing a lot more of those black-uniformed security men with the G4S logo on their chests in India, China and Middle East.
As G4S (GFS:LSE) reported in its latest half-year results, 29 per cent of group revenues of £3.76 billion in the six months to the end of June came from EMs. Pre-tax interim profits totalled £149 million, compared to £142 million in the first half last year.
The shares rose nearly 6 per cent as investors generally welcomed the news. Guardian Stockbrokers said in a note:
Positive numbers from G4S which shows an impressive forward looking pipeline, lower tax charge, EPS ahead of consensus, dividend increase, defensive characteristics which is encouraging given the recent market turmoil.
With concerns still on the horizon on global economic growth focus is yet again on emerging markets and this is why G4S looks like an interesting play with EM expansion ahead of target.
The group’s chief executive Nick Buckles expects 50 per cent of G4S revenues to come from new markets by 2018.
As the FT’s Mark Wembridge reports, Buckles sees the company expanding further in South America and Asia. “Just by the nature of the fact that new markets are growing strongly, we expect to grow organically,” Buckles told a conference call. “We would be focusing a chunk of our acquisition spend on new markets, so we are currently looking at places such as Brazil, Ecuador, Thailand, Malaysia and South Korea. The market growth itself and our positions in those markets will generate a big chunk of our business by 2018.”
With incomes growing in emerging countries, the move makes sense. G4S has done well with its strong international brand name in regions where local security companies often have a poor image associated with the criminal underworld.
G4S scored several contracts in emerging countries in the past few months. Manned security for ING in Turkey, the Hactl SuperTerminal in Hong Kong (the world’s busiest cargo airport) and high-profile jobs with the US embassy in Afghanistan and the southern oil fields in Iraq are amongst many that will make G4S’s name in EM even bigger.
But although the growth of the company is increasingly fuelled by its EM operations, it comes at certain costs. G4S took a hit during the Arab Spring, when Saudi Arabian government requested the company to pay a special “social unrest” bonus to all its employees, which did take its toll on the company’s half-year results.
Source: http://blogs.ft.com
No comments:
Post a Comment