40 1GM Thursday October 15 2020 | the times
Business
The accelerated publication of G4S’s
latest trading performance left inves-
tors little the wiser yesterday on either
its recovery from the pandemic or on
whether they can expect a return of the
dividend.
The security company, which, with
£7 billion of annual revenues and
530,000 people deployed in 80 coun-
tries, is the global industry leader, is
exciting takeover interest from at least
two smaller North American rivals.
However, if Gardaworld, the Cana-
dian group that has tabled a formal
£3 billion, 190p-a-share hostile bid, and
Allied Universal, an American rival
that has stepped forward with a mere
“expression of interest”, had been
expecting fodder for their approaches
from a nine-month update, they will
have been disappointed.
The G4S update was delivered three
weeks earlier than scheduled and was
significantly shorter than the equiva-
lent statement produced last year.
Under the City’s rules of engage-
ment, Garda has entered a period up to
the end of month within which it must
produce a formal offer document. Of
the G4S trading statement, Garda said:
“It conceals more than it reveals.”
In the statement, G4S said that
Investors left in dark
by latest G4S update
revenues down 2 per cent had “re-
mained resilient... broadly in line with
2019”, with the dip in income “offset by
tight direct and indirect cost-control
and reduced interest costs”.
G4S has lost business from its regular
work providing security at airports and
events, although that has been offset by
work including Covid-19 screening and
testing for financial services, health-
care and retail businesses.
The company, which has received
negative mdia coverage over the end-
ing of its contracts to run Birmingham
prison, Gatwick’s Brook House immi-
gration centre and the Medway youth
jail in Kent, confirmed that its new Five
Wells “mega-prison” contract in
Northamptonshire was worth £30 mil-
lion a year, although not until 2022.
The statement concluded: “The
global economic outlook remains un-
certain.”
Unimpressed, Garda said: “The
announcement conceals more than it
reveals compared to previous updates.
Revenues are sagging, there is no
mention of profit or cashflow and the
business performance is obscure.
“G4S congratulates itself for ‘retain-
ing new contracts’, but makes no men-
tion of the quantum of contract losses.
If these numbers demonstrate the
resilience of the business, why is thedividend not resumed at any level?”
There was no comment from Allied
Universal.
A City source said that such third-
quarter updates tended not to be
particularly “granular” and typically
would not be the vehicle for comment
on the dividend.
G4S scrapped its dividend for last
year as Covid-19 swept the country, but
it has made no announcement on its re-
instatement since, despite many other
leading companies that proved resil-
ient during the pandemic reviving the
shareholder payout.
Stephen Rawlinson, an independent
analyst of the sector, said that investors
might have expected better data “on
how much higher earnings might be or
on the specifics of interest and debt
amounts... Many items are not men-
tioned. We suspect that G4S would not
have made the statement in the
absence of the pressure it’s under.”
Robert Plant, an analyst at Panmure
Gordon, the stockbroker, said that he
had a 225p target for the share price, but
only because that was the level at which
he believed the company might engage
in takeover talks.
Before Garda’s interest, G4S shares
stood at about 100p and were at 145p
when the 190p offer was tabled. Last
night they were largely flat at 209p.Robert Lea Industrial Editor
W
aitrose
has
fallen
out of
the
running to buy
Mindful Chef after the
online recipe box
business entered into
exclusive negotiations
with Nestlé (Ashley
Armstrong writes).
The John Lewis
Partnership, which
owns Waitrose, had
been in talks to buyMindful Chef as part
of its efforts to
modernise the retailer
and focus on online
growth.
Tomorrow the
employee-owned
business will unveil
the outcome of a
strategy review, led by
Dame Sharon White,
its new chairwoman,
which is expected to
focus on more smaller
partnerships, updating
the role of its storesDeal is not what
they had in mind