G4S share price rises on higher operating profit

on Mar 10, 2015
Updated: Oct 21, 2019

G4S Plc (LON:GFS) today reported a 7.9-percent increase in 2014 underlying pre-tax operating profit, driven by cost savings and a rise in revenue. The result of £424 million was higher than a consensus forecast of £414 million.

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The world’s largest security group said that its full-year revenue from continuing operations had risen 3.9 percent to £6.75 billion, with the increase driven by strong demand for the company’s services in emerging markets(with sales up 8.9 percent) and North America(up 6.9 percent), which helped offset declines in the UK & Ireland and in Europe. The firm said its sales pipeline stood at an annual value of £5.5 billion.
Adding more good news for investors, G4S ‘s board recommended a five-percent increase to the company’s final dividend to 5.82p per share, bringing the total 2014 dividend to 9.24p per share.
In what was one of the few negative points in the report, the company announced a £45-million increase in provisions for legacy UK Government contracts.
The company’s chief executive officer Ashley Almanza commented on the results: “The group made good progress with its strategic plan, delivering commercial, operational and financial progress during 2014.” He added: “There remains much to be done to realise the full potential of our strategy and we expect to make further progress in 2015.”

In today’s trading, G4S shares were up two percent at 296.90p, as of 08:17 UTC. The stock has risen 6.8 percent since the start of the year. The company’s market capitalisation currently stands at £4.6 billion.
According to the Financial Times, the 17 analysts offering 12 month price targets for G4S have a median target of 280.00p, with a high estimate of 320.00p and a low estimate of 225.00p. As of March 09, 2015, the consensus forecast amongst 22 polled investment analysts covering G4S has it that the company will outperform the market. This consensus estimate has been maintained since the sentiment of investment analysts improved on March 09, 2015.
As of 10:38 GMT, Tuesday, 10 March, G4S plc share price is 300.10p.
As of 18:02 GMT, Tuesday, 10 March, G4S plc share price is 286.10p.


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