Dec 13, 2018

G4S rises 10% on plan to separate cash from security businesses

Security operator G4S announced on Wednesday it planned to separate out its cash business from its core division, though insisted it was not beginning a sale process, sending shares up 10 per cent. The government contractor said it intended to split its cash and secure solutions businesses - its two principle units - to "Enhance the focus and success of both." G4S said it was reviewing possible options, including a full de-merger or an initial public offering, but chief executive Ashley Almanza said the move was not the beginning of a sale process. G4S' cash business, which includes ATM and cash in transit services, accounted for 16 per cent of group revenues in the six months to June, and has customers across 45 countries. Sales in the division fell 13 per cent to £560m in the half-year compared to the first half of 2017, while G4S' secure solutions division saw a rise of 3 per cent to £3bn. In 2017, the cash business posted sales growth of 2 per cent to £1.2bn. The company put the first-half decline down to a particularly strong first half last year, saying it had not experienced the same number of contract wins in 2018, but also noted higher operating costs. G4S also said that although cash usage "Is expected to continue to grow in emerging markets, in developed markets cash volumes are expected to gradually decline." As such, the company said it planned to focus on markets "Where we have, or can build a number one or number two position."

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