Aug 9, 2018
G4S shares tumble as profits and revenues fall
G4S shares suffered their worst fall in a year after the security company reported half-year profits below expectations, while revenue dropped due to currency movements and the sale of business units. Revenue was down 7.5 per cent compared with the corresponding period last year at £3.67bn, while statutory pre-tax profit fell by more than one-third to £139m, as G4S made less money by selling or closing unwanted subsidiaries. Shares in G4S group sank by as much as 9 per cent on Thursday, before paring losses to 7.5 per cent, to trade at 261p. "With the shares near six-month highs, investors appear to be using this decline in profits as an excuse to take some profits," said Michael Hewson, chief market analyst at CMC Markets UK. Along with peers in the outsourcing sector, G4S has had a rough time in recent years and is seeking to get back on track. Mr Almanza said G4S delivered a "Marked improvement" in revenue generation in the second quarter, with organic growth of 2.8 per cent. G4S also raised concerns that Brexit could lead to a "Shortage of skills or workforce availability" in the UK, though it noted that 80 per cent of its revenues were generated outside Britain.
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