Shares in G4S (LON:GFS) have fallen deep into the red in London this morning as the security services group lowered its revenue growth outlook. The move followed the company’s disappointing performance in the Middle East and India.
As of 10:11 GMT, G4S’ share price had given up 5.20 percent to 265.07p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.17 percent lower at 7,549.52 points. The security group’s shares have added about seven percent to their value over the past year, and are up by some 11 percent in the year-to-date.
G4S lowers revenue growth outlook
G4S updated investors on its trading performance this morning, forecasting full year 2017 organic revenue growth of between three percent and four percent, as well as ‘good profit growth’. Reuters notes, however, that earlier in the year, the outsourcing group had forecast that its full-year revenue would grow between four percent and six percent.
The security services company, however, reassured investors that it was on track for its net debt to EBITDA ratio to be 2.5x or lower by the end of the year.
Middle East and India drag
“Trading for the nine months was in line with expectations. Organic revenue growth was 4.4 percent, with all regions growing apart from the Middle East and India region,” G4S’ chief executive Ashley Almanza commented in the statement.
“The main drag is the Middle East and India region, excluding these G4S would have achieved 6.1 percent organic growth,” said Stifel analysts, as quoted by Reuters.
Earlier this year, G4S revealed that its profits had climbed in the first half of the year. The security group, however, maintained its payout to shareholders unchanged.