G4S plc
Preliminary Results Announcement
January - December 2009
G4S, the international security solutions group, today announces its preliminary
results for the twelve months to 31 December 2009.
RESULTS HIGHLIGHTS
* Robust organic turnover growth* of 3.7% (2008: 9.5%)
* Group turnover* up 7.4% to £ 7,008.6 million (2008: £6,524.7m)
* PBITA* up 10.0% to £ 500.3 million (2008: £454.8m)
* Margin* increased to 7.1% (2008: 7.0%) through strong cost control and
improved business mix
* Strong cash flow generation up 27% to £449.9 million, 90% of PBITA (2008:
85%)
* Adjusted earnings per share increased by 22% to 20.2p (2008:16.6p) and by
12% at constant exchange rates
* Recommended final dividend up 13.0% to 4.16 pence per share DKK 0.3408
(2008: 3.68p/DKK 0.3052)
* Recommended total dividend up 11.7% to 7.18 pence per share DKK 0.6007
(2008: 6.43p/DKK 0.5624)
* Invested £153.2million in a number of acquisitions to increase our
capability in the government, financial institution, port and nuclear power
outsourcing sectors
*at constant (2009) exchange rates
Nick Buckles, Chief Executive Officer, commented:
"The group achieved an excellent performance in 2009, with businesses performing
well across all markets, service lines and customer segments. The global
economic downturn was a major challenge for the business community as a whole in
2009, with rapid declines in GDP and inflation rates across the world. That G4S
was able to report a further improved performance for the year demonstrates both
the breadth and international diversity of our business mix. It also
demonstrates our increasing ability to deliver innovative, outsourced solutions
to our customers, helping them drive efficiency and reduce costs in their
businesses.
Although low inflation has limited the ability to increase prices which has
affected organic revenue growth, sales volumes have held up well. This, combined
with continued focus on cost control, and debtor and cash control, has helped to
increase margins and substantially exceed our cash conversion target.
We expect organic growth in 2010 to be broadly similar to 2009 whilst continuing
to maintain our discipline on margins and cash generation.
We are confident that our strategic plan, which is enhancing our ability to meet
increasingly sophisticated customer needs by adding new capabilities and
technologies to our offer, has put the group in a strong position to maintain
our longer term growth momentum as we pursue attractive global opportunities in
our key target sectors."
For further enquiries, please +44 (0) 1293 554400
contact:
Nick Buckles Chief Executive Officer
Trevor Dighton Chief Financial Officer
Helen Parris Director of Investor
Relations
Media enquiries:
Alison Flynn Media Relations Manager +44 (0) 1293 554400
Kevin Smith Citigate Dewe Rogerson +44 (0) 207 282 1054
High resolution images are available for the media to view and download free of
charge from www.vismedia.co.uk <https://www.vismedia.co.uk/>.
Notes to Editors:
G4S is the world's leading international security solutions group, which
specialises in outsourced business processes in sectors where security and
safety risks are considered a strategic threat.
G4S is the largest employer quoted on the London Stock Exchange and has a
secondary stock exchange listing in Copenhagen. G4S has operations in more
than110 countries and over 595,000 employees. For more information on G4S, visit
www.g4s.com.
Presentation of Results:
A presentation to investors and analysts is taking place today at 0900hrs at the
London Stock Exchange.
Webcast:
http://streamstudio.world-television.com/CCUIv3/frameset.aspx?ticket=707-803-822
3&target=
en-default-&status=preview&browser=ie-10-8-0-0-0&stream=wm-audio-32
Dial-in facility:
UK Access Number +44 (0) 20 7075 1520
UK Toll Free 0808 238 7320
US Toll Free* Number 1866 793 4273
DK Toll Free* Number 80 88 49 45
Participant PIN Code 933947#
Replay Details (for seven days):
UK Toll Access Number +44 (0) 20 3364 5943
UK Toll Free Access Number 0808 238 9699
US Toll Free Access Number 1 866 286 6997
DK Toll Free Number 80 88 70 69
Conference Reference 261023#
Participant PIN Code 933947#
Capital Markets Day:
G4S will hold a Capital Markets Day in London on 18 May 2010
Annual General Meeting:
'The company's annual general meeting will be held in London on 28 May 2010
FINANCIAL SUMMARY
Results
The results which follow have been prepared under International Financial
Reporting Standards, as adopted by the European Union (adopted IFRSs).
Group Turnover
+-----------------------------------+--------+--------+
|Turnover of Continuing Businesses | 2009 | 2008 |
| | £m| £m|
+-----------------------------------+--------+--------+
|Turnover at constant exchange rates|7,008.6 |6,524.7 |
+-----------------------------------+--------+--------+
|Exchange difference | -| (596.2)|
+-----------------------------------+--------+--------+
|Total continuing business turnover |7,008.6 |5,928.5 |
+-----------------------------------+--------+--------+
Turnover increased by 18% to £ 7,008.6 million or by 7.4% at constant exchange
rates. Organic turnover growth was 3.7%.
+---------------------+------+-------------+-----------------+-----------+-----+
|Organic Turnover|Europe|North America|Developed Markets|New Markets|Total|
|Growth * | | | | | |
+---------------------+------+-------------+-----------------+-----------+-----+
|Secure solutions | 2.7%| 0.0%| 1.7%| 8.6%| 3.5%|
+---------------------+------+-------------+-----------------+-----------+-----+
|Cash solutions | 2.5%| 3.3%| 2.6%| 12.0%| 4.7%|
+---------------------+------+-------------+-----------------+-----------+-----+
|Total | 2.7%| 0.2%| 1.9%| 9.2%| 3.7%|
+---------------------+------+-------------+-----------------+-----------+-----+
Excluding North America commercial nuclear security, which lost a large contract
during 2008, the organic growth rate for the group was 4.4%.
* Calculated to exclude acquisitions and disposals, and at constant exchange
rates
Group Profit
+---------------------------------------+------+------+
|PBITA * of Continuing Businesses | 2009 | 2008 |
| | £m| £m|
+---------------------------------------+------+------+
|PBITA at constant exchange rates |500.3 |454.8 |
+---------------------------------------+------+------+
|Exchange difference | -|(39.8)|
+---------------------------------------+------+------+
|Total continuing business PBITA |500.3 |415.0 |
+---------------------------------------+------+------+
|PBITA margin at constant exchange rates| 7.1%| 7.0%|
+---------------------------------------+------+------+
* PBITA is defined as profit before interest, taxation and amortisation of
acquisition-related intangible assets
PBITA increased by 21% to £500.3 million or by 10.0% at constant exchange rates.
The PBITA margin was 7.1%.
Cash Flow and Financing
+----------------------------+------+------+
|Cash Flow | 2009 | 2008 |
| | £m| £m|
+----------------------------+------+------+
|Operating cash flow |449.9 |353.2 |
+----------------------------+------+------+
|Operating cash flow / PBITA | 90%| 85%|
+----------------------------+------+------+
Operating cash flow, as analysed on page 21, was up 27% to £449.9 million in the
period, representing 90% of PBITA. Net cash invested in acquistions was £153.2
million. Net debt at the end of the period, as analysed on page 20, was £1,433.4
million (December 2008: £1,347.7 million).
Adjusted earnings per share
+--------------------------------+--------+---------------------------+--------+
| | 2009 | 2008 at constant exchange| 2008 |
|Adjusted earnings per share | £m| rates| £m|
| | | £m| |
+--------------------------------+--------+---------------------------+--------+
|PBITA from continuing operations| 500.3 | 454.8 | 415.0 |
+--------------------------------+--------+---------------------------+--------+
|Interest (before pensions) | (95.3)| (101.5)| (88.2)|
+--------------------------------+--------+---------------------------+--------+
|Tax | (105.3)| (94.3)| (88.4)|
+--------------------------------+--------+---------------------------+--------+
|Minorities | (16.7)| (13.7)| (13.7)|
+--------------------------------+--------+---------------------------+--------+
|Adjusted profit attributable to | 283.0 | 245.3 | 224.7 |
|shareholders | | | |
+--------------------------------+--------+---------------------------+--------+
|Average number of shares (m) |1,403.6 | 1,357.7 |1,357.7 |
+--------------------------------+--------+---------------------------+--------+
|Adjusted EPS (p) | 20.2p| 18.1p| 16.6p|
+--------------------------------+--------+---------------------------+--------+
Adjusted earnings per share, reconciled to basic earnings per share on page 19,
increased by 22%, or by 12% at constant exchange rates.
BUSINESS ANALYSIS
Secure Solutions
+-------------------------+-----------------+-------------+-----------+--------+
| | Turnover| PBITA| Margins|Organic |
| | £m| £m| | Growth|
|* At constant exchange +--------+--------+------+------+-----+-----+--------+
|rates | 2009 | 2008 | 2009 | 2008 |2009 |2008 | 2009 |
+-------------------------+--------+--------+------+------+-----+-----+--------+
|Europe * |2,637.0 |2,449.1 |176.6 |158.7 | 6.7%| 6.5%| 2.7%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
|North America * |1,495.3 |1,449.5 | 84.8 | 83.3 | 5.7%| 5.7%| 0.0%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
|New Markets * |1,535.1 |1,346.2 |126.2 |105.8 | 8.2%| 7.9%| 8.6%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
|Total secure solutions * |5,667.4 |5,244.8 |387.6 |347.8 | 6.8%| 6.6%| 3.5%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
|Exchange differences | -| (508.8)| -|(30.9)| | | |
+-------------------------+--------+--------+------+------+-----+-----+--------+
|At actual exchange rates |5,667.4 |4,736.0 |387.6 |316.9 | | | |
+-------------------------+--------+--------+------+------+-----+-----+--------+
The secure solutions business continued its strong performance with good organic
growth of 3.5% and margins improved to 6.8%.
Europe
+-------------------------+-----------------+-------------+-----------+--------+
| | Turnover| PBITA| Margins|Organic |
| | £m| £m| | Growth|
|* At constant exchange +--------+--------+------+------+-----+-----+--------+
|rates | 2009 | 2008 | 2009 | 2008 |2009 |2008 | 2009 |
+-------------------------+--------+--------+------+------+-----+-----+--------+
|UK & Ireland * |1,139.3 | 942.6 | 97.3 | 78.0 | 8.5%| 8.3%| 7.4%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
|Continental Europe * |1,497.7 |1,506.5 | 79.3 | 80.7 | 5.3%| 5.4%| -0.5%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
|Total Europe * |2,637.0 |2,449.1 |176.6 |158.7 | 6.7%| 6.5%| 2.7%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
Organic growth in Europe was 2.7% compared to 8.3% in 2008. Margins improved to
6.7% helped by a strong performance in the UK government segment.
There was good organic growth of 7.4% in the UK & Ireland and margins
strengthened further to 8.5%. This was despite a serious economic downturn in
Ireland which saw revenues decline more than 14% and margins decline to less
than 2%. Key contract wins in 2009 included an extension to HMP Parc prison, the
renewal of a national meter-reading contract with a major utility provider, an
extension of the Electronic Monitoring contact, a new Electronic Monitoring
contract for Northern Ireland and a PFI contract to provide facilities
management services at the Dublin Criminal Courts complex which opened in
November 2009.
The Continental Europe region faced the biggest challenges of the economic
downturn as mandatory, above inflation, wage rate increases were implemented in
some countries. However strict cost control across the region, including
significant cost cutting in the Baltics which saw revenues decline by 17%,
limited the profit impact. Overall organic growth was -0.5% and margins were
slightly below the prior year at 5.3%. The security systems business, which
accounts for around 30% of Continental European secure solutions revenues,
performed well in a very difficult environment maintaining revenues and margins
overall. Strong performers included the Netherlands due to good performances in
the aviation and justice services sectors, Norway as a result of a positive
impact from aviation and the Statoil contract and Romania as a result of a new
contract win with Petrom.
Contract retention in the region was high at more than 95% and we believe we
have gained market share with our solutions strategy outperforming single
service providers.
North America
+---------------------------+-----------------+-----------+-----------+--------+
| | Turnover| PBITA| Margins|Organic |
| | £m| £m| | Growth|
|* At constant exchange +--------+--------+-----+-----+-----+-----+--------+
|rates | 2009 | 2008 |2009 |2008 |2009 |2008 | 2009 |
+---------------------------+--------+--------+-----+-----+-----+-----+--------+
|North America * |1,495.3 |1,449.5 |84.8 |83.3 | 5.7%| 5.7%| 0.0%|
+---------------------------+--------+--------+-----+-----+-----+-----+--------+
Organic growth in North America was flat. If the loss of a large contract in the
commercial nuclear sector is excluded, organic growth was 2.8%. Margins were
unchanged at 5.7%.
In the United States there was no growth in the commercial sector due to
contract wins and renewals being offset by service reductions for some
customers. Customer retention was excellent at more than 90%.
New contract awards in 2009 included electronic monitoring of offenders in Cook
County and secure solutions contracts with City of Houston, City of Chicago and
TD Ameritrade. Contract renewals and extensions included a secure solutions
contract for Bank of America locations nationwide, Merrill Lynch worldwide, an
extension to the protective services contract at the Savannah River nuclear site
for a minimum of five years and protective and emergency services for NASA at
14 locations across the US.
In 2009, the US business made three important strategic acquisitions - Adesta,
which will significantly enhance capability in seaport security and the chemical
and petrochemical industries in North America and internationally; All Star,
which broadens G4S North America's US government outsourcing capability and
share of the government sector; and lastly NSSC, which has risk consulting and
security solutions expertise focused on the chemical and nuclear power sectors.
In Canada, the organic growth rate of 2.1% was in line with the prior year and
continued cost focus meant that margins improved. In February 2010, G4S was
awarded a contract by the Canada Border Services Agency to help secure the
Canada border.
New Markets
+-------------------------+-----------------+-------------+-----------+--------+
| | Turnover| PBITA| Margins|Organic |
| | £m| £m| | Growth|
|* At constant exchange +--------+--------+------+------+-----+-----+--------+
|rates | 2009 | 2008 | 2009 | 2008 |2009 |2008 | 2009 |
+-------------------------+--------+--------+------+------+-----+-----+--------+
|Asia * | 522.0 | 455.9 | 41.1 | 36.0 | 7.9%| 7.9%| 5.6%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
|Middle East * | 424.5 | 374.1 | 38.5 | 31.1 | 9.1%| 8.3%| 13.4%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
|Africa * | 305.6 | 265.9 | 29.0 | 23.8 | 9.5%| 9.0%| 6.8%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
|Latin America & Caribbean| 283.0 | 250.3 | 17.6 | 14.9 | 6.2%| 6.0%| 9.4%|
|* | | | | | | | |
+-------------------------+--------+--------+------+------+-----+-----+--------+
|Total New Markets * |1,535.1 |1,346.2 |126.2 |105.8 | 8.2%| 7.9%| 8.6%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
In New Markets, organic growth was excellent at 8.6% and margins were higher
than the prior year due to improved performance, particularly in Africa and the
Middle East. The New Markets businesses have also benefited from the
implementation of the group's key sector strategy - focusing on areas such as
oil and gas, events and aviation. New contracts won during 2009 include Baghdad
International and Qatar airports, the FIFA Club World Cup tournament in UAE, the
Abu Dhabi and Macau Grands Prix and we are currently mobilising several large
contracts in Papua New Guinea for the oil and gas industry.
Organic growth in Asia was 5.6% and margins were maintained at 7.9%. India, the
largest market in the region achieved double-digit revenue growth and improved
margins. The outlook for the Asia region looks encouraging in 2010, despite the
loss of the DIAC (immigration management) contract in Australia. Macau declined
13% in 2009 but is expected to improve in 2010 as investment is returning to the
casino industry.
Towards the end of the year, new security rules were introduced which will allow
foreign ownership of manned security companies in China. Licenses are expected
to be issued during the second half of 2010 which is a positive development for
the medium term. G4S also acquired Hill & Associates, Asia's leading risk
consultancy firm which will provide additional risk consultancy and risk
management capability across the region.
In the Middle East, growth continued to be excellent across the region with
improved margins of 9.1%. Qatar and UAE performed particularly strongly, mainly
as a result of the new airport contract in Qatar and federal wage legislation in
UAE.
Africa performed strongly with organic growth of 6.8% and margins of 9.5%,
helped by strong organic growth in Nigeria, Morocco, Kenya and the care and
justice services business in South Africa and a continued focus on higher margin
work in South Africa secure solutions which has reduced its contract portfolio
by 20%.
The Latin America & Caribbean region has performed well as a result of a number
of large contract wins in Argentina, Ecuador and Peru, giving organic growth of
20.7%, 38.9% and 14.3% respectively. Overall for the region, organic growth was
9.4% and margins were 6.2%.
Cash Solutions
+-------------------------+-----------------+-------------+-----------+--------+
| | Turnover| PBITA| Margins|Organic |
| | £m| £m| | Growth|
|* At constant exchange +--------+--------+------+------+-----+-----+--------+
|rates | 2009 | 2008 | 2009 | 2008 |2009 |2008 | 2009 |
+-------------------------+--------+--------+------+------+-----+-----+--------+
|Europe * | 929.2 | 904.8 |102.0 | 98.9 |11.0%|10.9%| 2.5%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
|North America * | 98.8 | 95.9 | 4.1 | 0.9 | 4.1%| 0.9%| 3.3%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
|New Markets * | 313.2 | 279.2 | 46.3 | 44.2 |14.8%|15.8%| 12.0%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
|Total Cash solutions * |1,341.2 |1,279.9 |152.4 |144.0 |11.4%|11.3%| 4.7%|
+-------------------------+--------+--------+------+------+-----+-----+--------+
|Exchange differences | -| (87.4)| -|(10.4)| | | |
+-------------------------+--------+--------+------+------+-----+-----+--------+
|At actual exchange rates |1,341.2 |1,192.5 |152.4 |133.6 | | | |
+-------------------------+--------+--------+------+------+-----+-----+--------+
The cash solutions business performed well with organic growth of 4.7% and
margins of 11.4%.
Organic growth in Europe was 2.5% and was impacted by lower interest rates,
lower inflation and a reduction in some services by customers, but cost control
measures ensured margins improved to 11.0%.
In the UK & Ireland, the cash solutions business performed well with good
organic growth and margins holding firm. The fifth "super branch" cash
management centre in the UK was opened in London in January 2009. SMI, a leading
international cash management consultancy business, was acquired early in 2009
to add to the group's existing cash management and consultancy capability. SMI
acts as a consultant to central banks on bank note security and central bank
processes. The first CASH360 sales have been achieved in the UK, with a strong
pipeline of pilots.
Elsewhere in Europe, organic growth was affected by a reduction in
transportation and ATM services but continued strong growth was achieved in
Greece, Romania and Latvia.
In North America, the business in Canada stabilised under the new management
improving profit margins from 0.9% in 2008 to 4.1% in 2009. The Canadian cash
solutions business also achieved positive turnover growth for the first time
since 2006.
Organic growth in New Markets was excellent at 12.0% with margins lower at
14.8% due to the re-negotiated tolls contract in Colombia and the impact of some
significant robberies in Saudi Arabia. South Africa, one of the largest new
markets for cash solutions, performed very well amidst challenging market
conditions. Excellent growth and strong margins were achieved in UAE and
Malaysia. New cashflow forecasting software has been introduced in Malaysia
which will help customers reduce the cost of cash.
STRATEGIC DEVELOPMENT
Our strategy is to differentiate ourselves in our markets by using our expertise
to drive outsourcing and to minimise commoditisation of traditional security
services. We are stepping this out sequentially across our broad geographic
footprint. We see strong evidence of this strategy delivering enhanced growth
opportunities for the group by:
* Capitalising on the structural growth opportunity of increased demand for
outsourcing by delivering innovative, cost reducing, solutions to customers
as they re-shape their businesses in response to economic pressures
* Focusing the group on attractive global markets and sectors and enhancing
its ability to meet increasingly sophisticated customer needs through
capability-building acquisitions, new technology and creating new markets
* Increasing global diversification - G4S has a broad international presence
and unique developing markets exposure. We can export our government
expertise into other countries, drive development of cash solutions in New
Markets and develop secure solutions for multi-national customers across
numerous countries
OTHER FINANCIAL ISSUES
Acquisitions and divestments
The group invested a total of £153.2m in 2009 on acquisitions which have added
new capabilities to the group and will support the implementation of the group's
strategy. Acquisitions included:
* SMI - a worldwide cash consultancy business based in the UK acquired on 24
February
* Adesta - a US-based risk consulting and systems integration business
specialising in the ports and chemical security sectors acquired for $66m on
31 December
* All Star - one of the premier secure facilities management companies
servicing the US Government acquired for $59.9m on 23 November
* Hill & Associates - Asia's leading risk mitigation consultancy acquired for
$8m on 30 November
* NSSC -a US based risk consultancy specialising in the nuclear power sector
in the US and internationally, acquired for $22m on 31 December
The group's acquisition strategy will continue to focus on niche opportunities
which will both help to deliver its strategic objectives and meet its financial
performance criteria. Areas of particular interest include risk consulting,
systems integration and sector specialists and G4S expects to invest around
£100m in further capability-building acquisitions in 2010.
At the end of 2007, we signalled our intention to divest our remaining
businesses in France and Germany. The majority of these businesses were divested
during 2008 with the final divestment taking place in February 2009.
Financing & Interest
The group has a prudent approach to its balance sheet whilst maintaining the
flexibility to pursue acquisitions when appropriate. It has a long term stable
credit rating of BBB granted by Standard & Poor's in March 2009 and has a
diverse range of finance providers. The group is currently well capitalised with
no significant maturities until 2012. Borrowings are at attractive rates and
liabilities broadly match the business mix by currency.
The group's primary sources of finance are:
(i) A £1.087bn multicurrency revolving credit facility provided by a consortium
of lending banks at a margin of 0.225% over LIBOR and maturing on 28 June 2012.
(ii) A $550m private placement of notes on 1 March 2007, which mature at various
dates between 2014 and 2022 and bear interest at rates between 5.77% and 6.06%.
(iii) A $514m and £69m private placement of notes on 15 July 2008, which mature
at various dates between 2013 and 2020 and bear interest at rates between 6.09%
and 7.56%.
(iv) A £350m Public Note issued on 13 May 2009 bearing an interest rate of
7.75%, maturing 13 May 2019.
At 31 December 2009 the group had other short-term committed facilities of £45m
and uncommitted facilities of £515m.
As of 31 December 2009, net debt was £1,433.4m representing a gearing of 99%.
The group headroom was £614.7m at the year end. The group has sufficient
borrowing capacity to finance its current investment plans.
Net interest payable on net debt was £89.1m. This is a net increase of 10% over
the 2008 cost of £81.0m, due principally to the impact of exchange differences.
The group's average cost of gross borrowings during 2009 was 4.7% compared to
5.5% in 2008.
Also included within financing is other interest costs of £6.2m (2008: £6.0m)
and net expense of £19.0m (2008: net income £3.7m) in respect of movements in
the group's retirement benefit obligations.
Taxation
The effective tax rate for the year on adjusted earnings was 26.0%, compared to
26.9% for 2008. The group believes that the rate is sustainable going forward as
a result of the ongoing rationalisation of the post-merger group legal structure
and the elimination of fiscal inefficiencies.
Retirement benefit obligations
The group's funding shortfall on funded defined retirement benefit schemes, on
the valuation basis specified in IAS19 Employee Benefits, was £328m before tax
or £236m after tax (31 December 2008: £286m and £206m respectively). The main
schemes are in the UK. The latest full actuarial valuations were undertaken at
5 April 2006 in respect of the Securicor scheme, 31 March 2007 in respect of the
Group 4 scheme and 31 March 2005 in respect of the GSL scheme acquired in May
2008. However, all actuarial assumptions were reviewed as at 31 December 2009.
The valuation of gross liabilities has increased since 31 December 2008 due to a
decrease in the appropriate AA corporate bond rate from 6.3% to 5.7%, compounded
by an increase in inflation from 3.1% to 3.6% in the UK. However, the value of
the assets held in the funds increased by £143m during the period which helped
to partly offset the increase in liabilities during 2009. Additional company
contributions were £30m.
The group believes that, over the very long term in which retirement benefits
become payable, investment returns should eliminate the deficit reported in the
schemes in respect of past service liabilities. However, in recognition of the
regulatory obligations upon pension fund trustees to address reported deficits,
the group anticipates that, in the medium term, additional cash contributions
will continue to be made at least at a level similar to that in 2009.
Dividend
The board recommends a final dividend of 4.16p per share (DKK 0.3408). This
represents an increase of 13.0% on the final dividend for 2008. The interim
dividend was 3.02p per share (DKK 0.2599) and the total dividend, if approved,
will be 7.18p per share (DKK 0.6007), representing an increase of 11.7% on the
total dividend for 2008.
The group expects to continue to increase dividends broadly in line with
normalised adjusted earnings.
REVIEW AND OUTLOOK
The group achieved an excellent performance in 2009, with businesses performing
well across all markets, service lines and customer segments.
Whilst G4S and its customers are not immune to the severe economic slowdown, the
business has shown its resilience to economic pressure due to the following
qualities:-
* large proportion of complex long term outsourcing contracts, particularly in
the government sector and cash management
* increased need for outsourced solutions to enable customers to improve
efficiencies and manage costs in difficult times
* expertise in the cash management cycle and the efficient management of cash
for financial institutions
* broad geographic and market sector exposure with no over-reliance on a
single economy or particular industry group and a good proportion of revenue
in developing markets which have inherent structural growth
* customer demand for continuity and sustainability of the supply chain and
the backing of a global organisation with strong track record of delivery
* easing of global employment markets enabling recruitment of good quality
staff and increased retention rates of existing employees
* strong, very experienced senior management across the group
We expect to deliver another strong performance in 2010 with organic growth to
be broadly similar to 2009 whilst continuing to maintain our discipline on
margins and cash generation.
We are confident that our strategic plan, which is enhancing our ability to meet
increasingly sophisticated customer needs by adding new capabilities and
technologies to our offer, has put the group in a strong position to maintain
our longer term growth momentum as we pursue attractive global opportunities in
our key target sectors.
16 March 2010
G4S plc
Preliminary results announcement
For the year ended 31 December 2009
Consolidated income statement
For the year ended 31 December 2009
+----------------------------------------------------+-------+--------+--------+
| | | 2009 | 2008 |
+----------------------------------------------------+-------+--------+--------+
| |Notes | £m| £m|
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|Continuing operations | | | |
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|Revenue | 1, 2|7,008.6 |5,928.5 |
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|Profit from operations before amortisation of | | | |
|acquisition-related intangible assets and share of | | | |
+----------------------------------------------------+-------+--------+--------+
|profit from associates | | 499.1 | 411.6 |
+----------------------------------------------------+-------+--------+--------+
|Share of profit from associates | | 1.2 | 3.4 |
+----------------------------------------------------+-------+--------+--------+
|Profit from operations before amortisation of | 2| 500.3 | 415.0 |
|acquisition-related intangible assets (PBITA) | | | |
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|Amortisation of acquisition-related intangible | | (83.2)| (67.8)|
|assets | | | |
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|Profit from operations before interest and taxation |1, 2, 3| 417.1 | 347.2 |
|(PBIT) | | | |
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|Finance income | 6| 81.7 | 104.9 |
+----------------------------------------------------+-------+--------+--------+
|Finance costs | 7| (196.0)| (189.4)|
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|Profit before taxation (PBT) | 1 | 302.8 | 262.7 |
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|Taxation: | | | |
+----------------------------------------------------+-------+--------+--------+
|- Before amortisation of acquisition-related | | (100.0)| (89.4)|
|intangible assets | | | |
+----------------------------------------------------+-------+--------+--------+
|- On amortisation of acquisition-related intangible | | 23.3 | 19.1 |
|assets | | | |
+----------------------------------------------------+-------+--------+--------+
| | 8| (76.7)| (70.3)|
+----------------------------------------------------+-------+--------+--------+
|Profit after taxation | | 226.1 | 192.4 |
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|Loss from discontinued operations | 4| (6.9)| (27.5)|
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|Profit for the year | | 219.2 | 164.9 |
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|Attributable to: | | | |
+----------------------------------------------------+-------+--------+--------+
|Equity holders of the parent | | 202.5 | 151.2 |
+----------------------------------------------------+-------+--------+--------+
|Minority interests | | 16.7 | 13.7 |
+----------------------------------------------------+-------+--------+--------+
|Profit for the year | | 219.2 | 164.9 |
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|Earnings per share attributable to equity | 10| | |
|shareholders of the parent | | | |
+----------------------------------------------------+-------+--------+--------+
|For profit from continuing operations: | | | |
+----------------------------------------------------+-------+--------+--------+
|Basic | | 14.9p| 13.2p|
+----------------------------------------------------+-------+--------+--------+
|Diluted | | 14.9p| 13.2p|
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|For profit from continuing and discontinued | | | |
|operations: | | | |
+----------------------------------------------------+-------+--------+--------+
|Basic | | 14.4p| 11.1p|
+----------------------------------------------------+-------+--------+--------+
|Diluted | | 14.4p| 11.1p|
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|Dividends declared and proposed in respect of the | 9| | |
|year | | | |
+----------------------------------------------------+-------+--------+--------+
+----------------------------------------------------+-------+--------+--------+
|Interim dividend of 3.02p per share (2008:2.75p) | | 42.5 | 38.6 |
+----------------------------------------------------+-------+--------+--------+
|Final dividend of 4.16p per share (2008: 3.68p) | | 51.7 | 36.4 |
+----------------------------------------------------+-------+--------+--------+
|Total dividend of 7.18p per share (2008: 6.43p) | | 94.2 | 75.0 |
+----------------------------------------------------+-------+--------+--------+
Consolidated statement of financial position
At 31 December 2009
+----------------------------------------------------+-----+---------+---------+
| | | 2009 | 2008 |
| |Notes+---------+---------+
| | | £m| £m|
+----------------------------------------------------+-----+---------+---------+
+----------------------------------------------------+-----+---------+---------+
|ASSETS | | | |
+----------------------------------------------------+-----+---------+---------+
|Non-current assets | | | |
+----------------------------------------------------+-----+---------+---------+
|Goodwill | | 2,043.9 | 2,079.5 |
+----------------------------------------------------+-----+---------+---------+
|Other acquisition-related intangible assets | | 361.2 | 403.1 |
+----------------------------------------------------+-----+---------+---------+
|Other intangible assets | | 68.7 | 61.0 |
+----------------------------------------------------+-----+---------+---------+
|Property, plant and equipment | | 546.0 | 528.5 |
+----------------------------------------------------+-----+---------+---------+
|Investment in associates | | 7.2 | 7.4 |
+----------------------------------------------------+-----+---------+---------+
|Trade and other receivables | | 111.4 | 198.0 |
+----------------------------------------------------+-----+---------+---------+
|Deferred tax assets | | 178.1 | 155.0 |
+----------------------------------------------------+-----+---------+---------+
| | | 3,316.5 | 3,432.5 |
+----------------------------------------------------+-----+---------+---------+
+----------------------------------------------------+-----+---------+---------+
|Current assets | | | |
+----------------------------------------------------+-----+---------+---------+
|Inventories | | 77.8 | 85.0 |
+----------------------------------------------------+-----+---------+---------+
|Investments | | 84.4 | 92.7 |
+----------------------------------------------------+-----+---------+---------+
|Trade and other receivables | | 1,348.5 | 1,375.3 |
+----------------------------------------------------+-----+---------+---------+
|Cash and cash equivalents | | 307.6 | 562.1 |
+----------------------------------------------------+-----+---------+---------+
|Assets classified as held for sale | 11| 29.1 | 71.0 |
+----------------------------------------------------+-----+---------+---------+
| | | 1,847.4 | 2,186.1 |
+----------------------------------------------------+-----+---------+---------+
+----------------------------------------------------+-----+---------+---------+
|Total assets | | 5,163.9 | 5,618.6 |
+----------------------------------------------------+-----+---------+---------+
+----------------------------------------------------+-----+---------+---------+
|LIABILITIES | | | |
+----------------------------------------------------+-----+---------+---------+
|Current liabilities | | | |
+----------------------------------------------------+-----+---------+---------+
|Bank overdrafts | | (37.5)| (195.1)|
+----------------------------------------------------+-----+---------+---------+
|Bank loans | | (145.6)| (87.9)|
+----------------------------------------------------+-----+---------+---------+
|Obligations under finance leases | | (23.1)| (22.1)|
+----------------------------------------------------+-----+---------+---------+
|Trade and other payables | |(1,105.5)|(1,216.6)|
+----------------------------------------------------+-----+---------+---------+
|Current tax liabilities | | (55.2)| (28.9)|
+----------------------------------------------------+-----+---------+---------+
|Retirement benefit obligations | | (54.6)| (48.9)|
+----------------------------------------------------+-----+---------+---------+
|Provisions | | (29.8)| (33.9)|
+----------------------------------------------------+-----+---------+---------+
|Liabilities associated with assets classified as | 11| (30.9)| (74.1)|
|held for sale | | | |
+----------------------------------------------------+-----+---------+---------+
| | |(1,482.2)|(1,707.5)|
+----------------------------------------------------+-----+---------+---------+
+----------------------------------------------------+-----+---------+---------+
|Non-current liabilities | | | |
+----------------------------------------------------+-----+---------+---------+
|Bank loans | | (516.3)| (877.8)|
+----------------------------------------------------+-----+---------+---------+
|Loan notes | |(1,116.7)| (901.9)|
+----------------------------------------------------+-----+---------+---------+
|Obligations under finance leases | | (62.6)| (63.6)|
+----------------------------------------------------+-----+---------+---------+
|Trade and other payables | | (42.5)| (63.5)|
+----------------------------------------------------+-----+---------+---------+
|Retirement benefit obligations | | (313.0)| (278.6)|
+----------------------------------------------------+-----+---------+---------+
|Provisions | | (68.3)| (116.7)|
+----------------------------------------------------+-----+---------+---------+
|Deferred tax liabilities | | (123.1)| (138.1)|
+----------------------------------------------------+-----+---------+---------+
| | |(2,242.5)|(2,440.2)|
+----------------------------------------------------+-----+---------+---------+
+----------------------------------------------------+-----+---------+---------+
|Total liabilities | |(3,724.7)|(4,147.7)|
+----------------------------------------------------+-----+---------+---------+
+----------------------------------------------------+-----+---------+---------+
|Net assets | | 1,439.2 | 1,470.9 |
+----------------------------------------------------+-----+---------+---------+
+----------------------------------------------------+-----+---------+---------+
|EQUITY | | | |
+----------------------------------------------------+-----+---------+---------+
|Share capital | | 352.6 | 352.1 |
+----------------------------------------------------+-----+---------+---------+
|Share premium and reserves | | 1,054.1 | 1,074.9 |
+----------------------------------------------------+-----+---------+---------+
|Equity attributable to equity holders of the parent | | 1,406.7 | 1,427.0 |
+----------------------------------------------------+-----+---------+---------+
|Minority interests | | 32.5 | 43.9 |
+----------------------------------------------------+-----+---------+---------+
|Total equity | | 1,439.2 | 1,470.9 |
+----------------------------------------------------+-----+---------+---------+
Consolidated statement of cash flow
For the year ended 31 December 2009
+--------------------------------------------------------+-----+-------+-------+
| | | 2009 | 2008 |
+--------------------------------------------------------+Notes+-------+-------+
| | | £m | £m |
+--------------------------------------------------------+-----+-------+-------+
|Profit before taxation | | 302.8 | 262.7 |
+--------------------------------------------------------+-----+-------+-------+
+--------------------------------------------------------+-----+-------+-------+
|Adjustments for: | | | |
+--------------------------------------------------------+-----+-------+-------+
|Finance income | | (81.7)|(104.9)|
+--------------------------------------------------------+-----+-------+-------+
|Finance costs | | 196.0 | 189.4 |
+--------------------------------------------------------+-----+-------+-------+
|Depreciation of property, plant and equipment | | 121.1 | 105.0 |
+--------------------------------------------------------+-----+-------+-------+
|Amortisation of acquisition-related intangible assets | | 83.2 | 67.8 |
+--------------------------------------------------------+-----+-------+-------+
|Amortisation of other intangible assets | | 15.1 | 11.1 |
+--------------------------------------------------------+-----+-------+-------+
|(Profit)/loss on disposal of property, plant and | | | |
|equipment and intangible assets other than acquisition | | (0.3)| 2.1 |
|related | | | |
+--------------------------------------------------------+-----+-------+-------+
|Share of profit from associates | | (1.2)| (3.4)|
+--------------------------------------------------------+-----+-------+-------+
|Equity-settled transactions | | 7.1 | 5.0 |
+--------------------------------------------------------+-----+-------+-------+
|Operating cash flow before movements in working capital | | 642.1 | 534.8 |
+--------------------------------------------------------+-----+-------+-------+
+--------------------------------------------------------+-----+-------+-------+
|Decrease/(increase) in inventories | | 2.0 | (7.4)|
+--------------------------------------------------------+-----+-------+-------+
|Decrease/(increase) in receivables | | 1.0 | (44.4)|
+--------------------------------------------------------+-----+-------+-------+
|Increase in payables | | 4.6 | 43.6 |
+--------------------------------------------------------+-----+-------+-------+
|Decrease in provisions | | (25.7)| (14.2)|
+--------------------------------------------------------+-----+-------+-------+
|Decrease in retirement benefit obligations | | (32.9)| (32.3)|
+--------------------------------------------------------+-----+-------+-------+
|Net cash flow from operating activities of continuing | | 591.1 | 480.1 |
|operations | | | |
+--------------------------------------------------------+-----+-------+-------+
|Net cash used by operating activities of discontinued | | (14.1)| (25.1)|
|operations | | | |
+--------------------------------------------------------+-----+-------+-------+
|Cash generated by operations | | 577.0 | 455.0 |
+--------------------------------------------------------+-----+-------+-------+
+--------------------------------------------------------+-----+-------+-------+
|Tax paid | | (67.8)| (82.0)|
+--------------------------------------------------------+-----+-------+-------+
|Net cash flow from operating activities | | 509.2 | 373.0 |
+--------------------------------------------------------+-----+-------+-------+
+--------------------------------------------------------+-----+-------+-------+
|Investing activities | | | |
+--------------------------------------------------------+-----+-------+-------+
|Interest received | | 11.8 | 17.2 |
+--------------------------------------------------------+-----+-------+-------+
|Cash flow from associates | | 2.4 | 12.2 |
+--------------------------------------------------------+-----+-------+-------+
|Purchases of property, plant and equipment and | |(187.1)|(174.5)|
|intangible assets other than acquisition-related | | | |
+--------------------------------------------------------+-----+-------+-------+
|Proceeds on disposal of property, plant and equipment | | 17.4 | 13.2 |
|and intangible assets other than acquisition-related | | | |
+--------------------------------------------------------+-----+-------+-------+
|Acquisition of subsidiaries | |(157.5)|(419.4)|
+--------------------------------------------------------+-----+-------+-------+
|Net cash balances acquired/disposed of | | (12.2)| 19.7 |
+--------------------------------------------------------+-----+-------+-------+
|Disposal of subsidiaries | | 7.6 | 31.1 |
+--------------------------------------------------------+-----+-------+-------+
|(Purchase)/sale of investments | | (0.9)| 5.6 |
+--------------------------------------------------------+-----+-------+-------+
|Own shares purchased | | (9.9)| (8.8)|
+--------------------------------------------------------+-----+-------+-------+
|Net cash used in investing activities | |(328.4)|(503.7)|
+--------------------------------------------------------+-----+-------+-------+
+--------------------------------------------------------+-----+-------+-------+
|Financing activities | | | |
+--------------------------------------------------------+-----+-------+-------+
|Share issues | | 2.7 | 276.8 |
+--------------------------------------------------------+-----+-------+-------+
|Dividends paid to minority interests | | (18.0)| (11.9)|
+--------------------------------------------------------+-----+-------+-------+
|Dividends paid to equity shareholders of the parent | | (94.2)| (75.0)|
+--------------------------------------------------------+-----+-------+-------+
|Proceeds on issue of loan notes | | 346.8 | 327.0 |
+--------------------------------------------------------+-----+-------+-------+
|Repayment of revolving credit facilities with proceeds | |(346.8)|(327.0)|
|from issue of loan notes | | | |
+--------------------------------------------------------+-----+-------+-------+
|Other net movement in borrowings | | 23.7 | 173.7 |
+--------------------------------------------------------+-----+-------+-------+
|Interest paid | | (98.5)| (97.2)|
+--------------------------------------------------------+-----+-------+-------+
|Net cash flow from hedging financial instruments | | (10.2)| (65.9)|
+--------------------------------------------------------+-----+-------+-------+
|Repayment of obligations under finance leases | | (24.2)| (13.5)|
+--------------------------------------------------------+-----+-------+-------+
|Net cash flow from financing activities | |(218.7)| 187.0 |
+--------------------------------------------------------+-----+-------+-------+
+--------------------------------------------------------+-----+-------+-------+
|Net (decrease)/increase in cash, cash equivalents and | 12| (37.9)| 56.3 |
|bank overdrafts | | | |
+--------------------------------------------------------+-----+-------+-------+
+--------------------------------------------------------+-----+-------+-------+
|Cash, cash equivalents and bank overdrafts at the | | 360.7 | 270.7 |
|beginning of the year | | | |
+--------------------------------------------------------+-----+-------+-------+
|Effect of foreign exchange rate fluctuations on cash | | (32.3)| 33.7 |
|held | | | |
+--------------------------------------------------------+-----+-------+-------+
|Cash, cash equivalents and bank overdrafts at the end of| | 290.5 | 360.7 |
|the year | | | |
+--------------------------------------------------------+-----+-------+-------+
Consolidated statement of comprehensive income
For the year ended 31 December 2009
+--------------------------------------------------------------+-------+-------+
| | 2009 | 2008 |
| +-------+-------+
| | £m| £m|
+--------------------------------------------------------------+-------+-------+
|Profit for the year | 219.2 | 164.9 |
+--------------------------------------------------------------+-------+-------+
+--------------------------------------------------------------+-------+-------+
|Other comprehensive income | | |
+--------------------------------------------------------------+-------+-------+
|Exchange differences on translation of foreign operations | (93.3)| 182.0 |
+--------------------------------------------------------------+-------+-------+
|Change in fair value of net investment hedging financial | 28.6 | (81.1)|
|instruments | | |
+--------------------------------------------------------------+-------+-------+
|Change in fair value of cash flow hedging financial | (22.6)| 36.4 |
|instruments | | |
+--------------------------------------------------------------+-------+-------+
|Actuarial losses on defined retirement benefit schemes | (63.1)|(196.9)|
+--------------------------------------------------------------+-------+-------+
|Tax on items taken directly to equity | 21.9 | 50.3 |
+--------------------------------------------------------------+-------+-------+
|Other comprehensive income, net of tax |(128.5)| (9.3)|
+--------------------------------------------------------------+-------+-------+
+--------------------------------------------------------------+-------+-------+
|Total comprehensive income for the year | 90.7 | 155.6 |
+--------------------------------------------------------------+-------+-------+
+--------------------------------------------------------------+-------+-------+
|Attributable to: | | |
+--------------------------------------------------------------+-------+-------+
|Equity holders of the parent | 74.0 | 141.9 |
+--------------------------------------------------------------+-------+-------+
|Minority interests | 16.7 | 13.7 |
+--------------------------------------------------------------+-------+-------+
|Total comprehensive income for the year | 90.7 | 155.6 |
+--------------------------------------------------------------+-------+-------+
Consolidated statement of changes in equity
For the year ended 31 December 2009
+--------------------------+-------+--------+--------+-------+--------+--------+
| | Share| | | Share| | |
+--------------------------+-------+--------+--------+-------+--------+--------+
| |Capital|Reserves| Total|capital|Reserves| Total|
+--------------------------+-------+--------+--------+-------+--------+--------+
| | 2009| 2009 | 2009 | 2008 | 2008 | 2008 |
| +-------+--------+--------+-------+--------+--------+
| | £m| £m| £m| £m| £m| £m|
+--------------------------+-------+--------+--------+-------+--------+--------+
+--------------------------+-------+--------+--------+-------+--------+--------+
|At beginning of year | 352.1 |1,074.9 |1,427.0 | 320.2 | 766.9 |1,087.1 |
+--------------------------+-------+--------+--------+-------+--------+--------+
|Net recognised income | | | | | | |
|attributable | | | | | | |
+--------------------------+-------+--------+--------+-------+--------+--------+
|to equity shareholders of | - | 74.0 | 74.0 | - | 141.9 | 141.9 |
|the parent | | | | | | |
+--------------------------+-------+--------+--------+-------+--------+--------+
|Shares issued | 0.5 | 2.2 | 2.7 | 31.9 | 244.9 | 276.8 |
+--------------------------+-------+--------+--------+-------+--------+--------+
|Dividends declared | - | (94.2)| (94.2)| - | (75.0)| (75.0)|
+--------------------------+-------+--------+--------+-------+--------+--------+
|Own shares purchased | - | (9.9)| (9.9)| - | (8.8)| (8.8)|
+--------------------------+-------+--------+--------+-------+--------+--------+
|Equity-settled | - | 7.1 | 7.1 | - | 5.0 | 5.0 |
|transactions | | | | | | |
+--------------------------+-------+--------+--------+-------+--------+--------+
|At end of year | 352.6 |1,054.1 |1,406.7 | 352.1 |1,074.9 |1,427.0 |
+--------------------------+-------+--------+--------+-------+--------+--------+
1) Basis of preparation and accounting policies
The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 December 2009 or 2008. Statutory
accounts for 2008 have been delivered to the registrar of companies, and those
for 2009 will be delivered in due course. The auditors have reported on those
accounts; their reports were (i) unqualified, (ii) did not include references to
any matters to which the auditors drew attention by way of emphasis without
qualifying their reports and (iii) did not contain a statement under section
237(2) or (3) of the Companies Act 1985 in respect of the accounts for 2008, nor
a statement under section 498(2) or (3) of the Companies Act 2006 in respect of
the accounts for 2009.
The comparative income statement for the year ended 31 December 2008 has been
re-presented for operations qualifying as discontinued during the current year.
Revenue from continuing operations has been reduced by £14.4m and PBT has been
reduced by £1.5m compared to the figures published previously. In addition, the
comparative balance sheet as at 31 December 2008 has been restated to reflect
the completion during 2009 of the initial accounting in respect of acquisitions
made during 2008. Adjustments made to the provisional calculation of the fair
values of assets and liabilities acquired amount to £19.1m, with an equivalent
increase in the reported value of goodwill.
2) Segmental analysis
The group operates in two core product areas: secure solutions and cash
solutions. The group operates on a worldwide basis and derives a substantial
proportion of its revenue and PBIT from each of the following geographical
regions: Europe (comprising the United Kingdom and Ireland, and Continental
Europe), North America, and New Markets (comprising the Middle East and Gulf
States, Latin America and the Caribbean, Africa, and Asia Pacific).
The segment disclosures are based on the components that the Board monitors in
making decisions about operating matters. Such components are identified on the
basis of internal reports that the Board reviews regularly in allocating
resources to segments and in assessing their performance.
Segment information for continuing operations is presented below:
Segment revenue
+-------------------------------+--------+--------+
| +--------+--------+
|Revenue by business segment | 2009 | 2008 |
| +--------+--------+
| | £m| £m|
+-------------------------------+--------+--------+
+-------------------------------+--------+--------+
|Secure Solutions | | |
+-------------------------------+--------+--------+
|UK and Ireland |1,139.3 | 929.9 |
+-------------------------------+--------+--------+
|Continental Europe |1,497.7 |1,378.6 |
+-------------------------------+--------+--------+
|Europe |2,637.0 |2,308.5 |
+-------------------------------+--------+--------+
|North America |1,495.3 |1,222.3 |
+-------------------------------+--------+--------+
|Middle East and Gulf States | 424.5 | 315.6 |
+-------------------------------+--------+--------+
|Latin America and the Caribbean| 283.0 | 229.0 |
+-------------------------------+--------+--------+
|Africa | 305.6 | 248.6 |
+-------------------------------+--------+--------+
|Asia Pacific | 522.0 | 412.0 |
+-------------------------------+--------+--------+
|New Markets |1,535.1 |1,205.2 |
+-------------------------------+--------+--------+
|Total Secure Solutions |5,667.4 |4,736.0 |
+-------------------------------+--------+--------+
+-------------------------------+--------+--------+
|Cash Solutions | | |
+-------------------------------+--------+--------+
|Europe | 929.2 | 859.1 |
+-------------------------------+--------+--------+
|North America | 98.8 | 87.0 |
+-------------------------------+--------+--------+
|New Markets | 313.2 | 246.4 |
+-------------------------------+--------+--------+
|Total Cash Solutions |1,341.2 |1,192.5 |
+-------------------------------+--------+--------+
|Total revenue |7,008.6 |5,928.5 |
+-------------------------------+--------+--------+
2) Segmental analysis (continued)
+-------------------------------------+--------+--------+
|Revenue by geographical market | 2009 | 2008 |
+-------------------------------------+--------+--------+
| | £m| £m|
+-------------------------------------+--------+--------+
+-------------------------------------+--------+--------+
|Europe |3,566.2 |3,167.6 |
+-------------------------------------+--------+--------+
|North America |1,594.1 |1,309.3 |
+-------------------------------------+--------+--------+
|New Markets |1,848.3 |1,451.6 |
+-------------------------------------+--------+--------+
|Total revenue |7,008.6 |5,928.5 |
+-------------------------------------+--------+--------+
+-------------------------------------+--------+--------+
|PBITA by business segment | 2009 | 2008 |
+-------------------------------------+--------+--------+
| | £m| £m|
+-------------------------------------+--------+--------+
+-------------------------------------+--------+--------+
|Secure Solutions | | |
+-------------------------------------+--------+--------+
|UK and Ireland | 97.3 | 76.8 |
+-------------------------------------+--------+--------+
|Continental Europe | 79.3 | 74.3 |
+-------------------------------------+--------+--------+
|Europe | 176.6 | 151.1 |
+-------------------------------------+--------+--------+
|North America | 84.8 | 70.6 |
+-------------------------------------+--------+--------+
|Middle East and Gulf States | 38.5 | 26.4 |
+-------------------------------------+--------+--------+
|Latin America and the Caribbean | 17.6 | 13.8 |
+-------------------------------------+--------+--------+
|Africa | 29.0 | 22.4 |
+-------------------------------------+--------+--------+
|Asia Pacific | 41.1 | 32.6 |
+-------------------------------------+--------+--------+
|New Markets | 126.2 | 95.2 |
+-------------------------------------+--------+--------+
|Total Secure Solutions | 387.6 | 316.9 |
+-------------------------------------+--------+--------+
+-------------------------------------+--------+--------+
|Cash Solutions | | |
+-------------------------------------+--------+--------+
|Europe | 102.0 | 94.0 |
+-------------------------------------+--------+--------+
|North America | 4.1 | 0.8 |
+-------------------------------------+--------+--------+
|New Markets | 46.3 | 38.8 |
+-------------------------------------+--------+--------+
|Total Cash Solutions | 152.4 | 133.6 |
+-------------------------------------+--------+--------+
|Total PBITA before head office costs | 540.0 | 450.5 |
+-------------------------------------+--------+--------+
|Head office costs | (39.7)| (35.5)|
+-------------------------------------+--------+--------+
|Total PBITA | 500.3 | 415.0 |
+-------------------------------------+--------+--------+
+-------------------------------------+--------+--------+
|PBITA by geographical market | | |
+-------------------------------------+--------+--------+
+-------------------------------------+--------+--------+
|Europe | 278.6 | 245.1 |
+-------------------------------------+--------+--------+
|North America | 88.9 | 71.4 |
+-------------------------------------+--------+--------+
|New Markets | 172.5 | 134.0 |
+-------------------------------------+--------+--------+
|Total PBITA before head office costs | 540.0 | 450.5 |
+-------------------------------------+--------+--------+
|Head office costs | (39.7)| (35.5)|
+-------------------------------------+--------+--------+
|Total PBITA | 500.3 | 415.0 |
+-------------------------------------+--------+--------+
+-----------------------------------------------------+------+------+
+-----------------------------------------------------+------+------+
|Result by business segment | 2009 | 2008 |
| +------+------+
| | £m| £m|
+-----------------------------------------------------+------+------+
+-----------------------------------------------------+------+------+
|Total PBITA |500.3 |415.0 |
+-----------------------------------------------------+------+------+
|Amortisation of acquisition-related intangible assets|(83.2)|(67.8)|
+-----------------------------------------------------+------+------+
|Total PBIT |417.1 |347.2 |
+-----------------------------------------------------+------+------+
+-----------------------------------------------------+------+------+
|Secure Solutions |330.1 |271.3 |
+-----------------------------------------------------+------+------+
|Cash Solutions |126.7 |111.4 |
+-----------------------------------------------------+------+------+
|Head office costs |(39.7)|(35.5)|
+-----------------------------------------------------+------+------+
|Total PBIT |417.1 |347.2 |
+-----------------------------------------------------+------+------+
3) Profit from operations before interest and taxation (PBIT)
The income statement can be analysed as follows:
+-------------------------------+---------+------------------------------------+
|Continuing operations | 2009 | 2008 |
| +---------+------------------------------------+
| | £m| £m|
+-------------------------------+---------+------------------------------------+
+-------------------------------+---------+------------------------------------+
|Revenue | 7,008.6 | 5,928.5 |
+-------------------------------+---------+------------------------------------+
|Cost of sales |(5,472.8)| (4,615.7)|
+-------------------------------+---------+------------------------------------+
|Gross profit | 1,535.8 | 1,312.8 |
+-------------------------------+---------+------------------------------------+
|Administration expenses |(1,119.9)| (969.0)|
+-------------------------------+---------+------------------------------------+
|Share of profit from associates| 1.2 | 3.4 |
+-------------------------------+---------+------------------------------------+
|PBIT | 417.1 | 347.2 |
+-------------------------------+---------+------------------------------------+
+-------------------------------+---------+------------------------------------+
|Included within administration expenses is the amortisation charge for |
|acquisition-related intangible assets. |
+------------------------------------------------------------------------------+
4) Discontinued operations
Operations qualifying as discontinued in the current period primarily comprise
the security services business in France, which principally comprised Group 4
Securicor SAS, disposed of on 28 February 2009, Group 4 Falck Reinsurance S.A,
the captive insurance business in Luxembourg, disposed of on 23 December 2009
and the systems installation business in Slovakia. Further operations qualifying
as discontinued in the prior year also comprised the security services business
in Germany, which principally comprised G4S Sicherheitsdienste GmbH and G4S
Sicherheitssysteme GmbH, disposed of on 15 May 2008. A deferred tax credit in
relation to the discontinued US Aviation business was recognised in the current
period.
5) Acquisitions
The group undertook a number of acquisitions in the year. The total fair value
of net liabilities acquired amounted to £61.4m which included the recognition of
£50.5m of acquisition-related intangible assets, generating goodwill of £84.8m,
satisfied by a total consideration of £153.2m, of which £152.6m has been paid in
the year.
Principal acquisitions in subsidiary undertakings include the purchase of
controlling interests in SecPoint Security Limited, a security solutions
business in Ghana; Sunshine Youth Services, a juvenile justice business in the
US; CL Systems Limited, a cash solutions business in Greater China; SecuraMonde,
a cash solutions business in the UK; Adesta LLC, a leading US systems integrator
in the design and operation of security systems and command and control centres
for government and regulated services; All Star International, one of the
premier facilities management and base operations support companies providing
services to the US Government; NSSC, a US risk consulting business in the
nuclear power industry and the public sector and Hill & Associates, Asia's
leading provider of specialist risk mitigation consulting services.
In addition, the group completed the minority buy-outs of certain businesses in
New Markets during the year.
6) Finance income
+-----------------------------------------------------------+-----+------+
| |2009 | 2008 |
+-----------------------------------------------------------+-----+------+
| | £m| £m|
+-----------------------------------------------------------+-----+------+
+-----------------------------------------------------------+-----+------+
|Interest income on cash, cash equivalents and investments |11.9 | 17.8 |
+-----------------------------------------------------------+-----+------+
|Other interest income | 1.8 | 0.6 |
+-----------------------------------------------------------+-----+------+
|Expected return on defined retirement benefit scheme assets|68.0 | 86.5 |
+-----------------------------------------------------------+-----+------+
|Total finance income |81.7 |104.9 |
+-----------------------------------------------------------+-----+------+
7) Finance costs
+-------------------------------------------------------+------+------+
| | 2009 | 2008 |
| +------+------+
| | £m| £m|
+-------------------------------------------------------+------+------+
+-------------------------------------------------------+------+------+
|Interest on bank overdrafts, loans and loan notes | 94.0 | 94.9 |
+-------------------------------------------------------+------+------+
|Interest on obligations under finance leases | 7.0 | 3.9 |
+-------------------------------------------------------+------+------+
|Other interest charges | 8.0 | 7.8 |
+-------------------------------------------------------+------+------+
|Total group borrowing costs |109.0 |106.6 |
+-------------------------------------------------------+------+------+
|Finance costs on defined retirement benefit obligations| 87.0 | 82.8 |
+-------------------------------------------------------+------+------+
|Total finance costs |196.0 |189.4 |
+-------------------------------------------------------+------+------+
8) Taxation
+-------------------------------------+------+------+
| | 2009 | 2008 |
| +------+------+
| | £m| £m|
+-------------------------------------+------+------+
+-------------------------------------+------+------+
|Current taxation expense |(97.9)|(75.7)|
+-------------------------------------+------+------+
|Deferred taxation credit | 21.2 | 5.4 |
+-------------------------------------+------+------+
|Total income tax expense for the year|(76.7)|(70.3)|
+-------------------------------------+------+------+
The total income tax expense for the year includes amounts attributable to the
UK of £0.1m (2008: £7.6m).
9) Dividends
+----------------------------------------------+---------+---------+-----+-----+
| | Pence| DKK|2009 |2008 |
+----------------------------------------------+---------+---------+-----+-----+
| |per share|per share| £m| £m|
+----------------------------------------------+---------+---------+-----+-----+
|Amounts recognised as distributions to equity | | | | |
|holders of the parent in the year | | | | |
+----------------------------------------------+---------+---------+-----+-----+
|Final dividend for the year ended 31 December | 2.85 | 0.2786 | | |
|2007 | | | -|36.4 |
+----------------------------------------------+---------+---------+-----+-----+
|Interim dividend for the six months ended 30 | 2.75 | 0.2572 | | |
|June 2008 | | | -|38.6 |
+----------------------------------------------+---------+---------+-----+-----+
|Final dividend for the year ended 31 December | 3.68 | 0.3052 | | |
|2008 | | |51.7 | -|
+----------------------------------------------+---------+---------+-----+-----+
|Interim dividend for the six months ended 30 | 3.02 | 0.2599 | | |
|June 2009 | | |42.5 | -|
+----------------------------------------------+---------+---------+-----+-----+
| | | |94.2 |75.0 |
+----------------------------------------------+---------+---------+-----+-----+
+----------------------------------------------+---------+---------+-----+-----+
|Proposed final dividend for the year ended 31 | 4.16 | 0.3408 |58.4 | |
|December 2009 | | | | |
+----------------------------------------------+---------+---------+-----+-----+
The proposed final dividend is subject to approval by shareholders at the Annual
General Meeting. If so approved, it will be paid on 4 June 2010 to shareholders
who are on the register on 30 April 2010. The exchange rate used to translate it
into Danish kroner is that at 15 March 2010.
10) Earnings/(loss) per share attributable to equity shareholders of the parent
+------------------------------------------------------------+--------+--------+
| | 2009 | 2008 |
| +--------+--------+
| | £m| £m|
+------------------------------------------------------------+--------+--------+
|From continuing and discontinued operations | | |
+------------------------------------------------------------+--------+--------+
+------------------------------------------------------------+--------+--------+
|Earnings | | |
+------------------------------------------------------------+--------+--------+
|Profit for the year attributable to equity holders of the | 202.5 | 151.2 |
|parent | | |
+------------------------------------------------------------+--------+--------+
|Effect of dilutive potential ordinary shares (net of tax) | - | 0.2 |
+------------------------------------------------------------+--------+--------+
|Profit for the purposes of diluted earnings per share | 202.5 | 151.4 |
+------------------------------------------------------------+--------+--------+
+------------------------------------------------------------+--------+--------+
|Number of shares (m) | | |
+------------------------------------------------------------+--------+--------+
|Weighted average number of ordinary shares |1,403.6 |1,357.7 |
+------------------------------------------------------------+--------+--------+
|Effect of dilutive potential ordinary shares | 0.1 | 1.3 |
+------------------------------------------------------------+--------+--------+
|Weighted average number of ordinary shares for the purposes |1,403.7 |1,359.0 |
|of diluted earnings per share | | |
+------------------------------------------------------------+--------+--------+
+------------------------------------------------------------+--------+--------+
|Earnings per share from continuing and discontinued | | |
|operations (pence) | | |
+------------------------------------------------------------+--------+--------+
|Basic | 14.4p| 11.1p|
+------------------------------------------------------------+--------+--------+
|Diluted | 14.4p| 11.1p|
+------------------------------------------------------------+--------+--------+
+------------------------------------------------------------+--------+--------+
|From continuing operations | | |
+------------------------------------------------------------+--------+--------+
+------------------------------------------------------------+--------+--------+
|Earnings | | |
+------------------------------------------------------------+--------+--------+
|Profit for the year attributable to equity holders of the | 202.5 | 151.2 |
|parent | | |
+------------------------------------------------------------+--------+--------+
|Adjustment to exclude loss for the year from discontinued | 6.9 | 27.5 |
|operations (net of tax) | | |
+------------------------------------------------------------+--------+--------+
|Profit from continuing operations | 209.4 | 178.7 |
+------------------------------------------------------------+--------+--------+
|Effect of dilutive potential ordinary shares (net of tax) | - | 0.2 |
+------------------------------------------------------------+--------+--------+
|Profit from continuing operations for the purpose of diluted| 209.4 | 178.9 |
|earnings per share | | |
+------------------------------------------------------------+--------+--------+
+------------------------------------------------------------+--------+--------+
|Earnings per share from continuing operations (pence) | | |
+------------------------------------------------------------+--------+--------+
|Basic | 14.9p| 13.2p|
+------------------------------------------------------------+--------+--------+
|Diluted | 14.9p| 13.2p|
+------------------------------------------------------------+--------+--------+
+------------------------------------------------------------+--------+--------+
|From discontinued operations | | |
+------------------------------------------------------------+--------+--------+
+------------------------------------------------------------+--------+--------+
|Loss per share from discontinued operations (pence) | | |
+------------------------------------------------------------+--------+--------+
|Basic | (0.5)p| (2.1)p|
+------------------------------------------------------------+--------+--------+
|Diluted | (0.5)p| (2.1)p|
+------------------------------------------------------------+--------+--------+
+------------------------------------------------------------+--------+--------+
|From adjusted earnings | | |
+------------------------------------------------------------+--------+--------+
+------------------------------------------------------------+--------+--------+
|Earnings | | |
+------------------------------------------------------------+--------+--------+
|Profit from continuing operations | 209.4 | 178.7 |
+------------------------------------------------------------+--------+--------+
|Adjustment to exclude net retirement benefit finance income | 13.7 | (2.7)|
|(net of tax) | | |
+------------------------------------------------------------+--------+--------+
|Adjustment to exclude amortisation of acquisition-related | 59.9 | 48.7 |
|intangible assets (net of tax) | | |
+------------------------------------------------------------+--------+--------+
|Adjusted profit for the year attributable to equity holders | 283.0 | 224.7 |
|of the parent | | |
+------------------------------------------------------------+--------+--------+
+------------------------------------------------------------+--------+--------+
|Weighted average number of ordinary shares (m) |1,403.6 |1,357.7 |
+------------------------------------------------------------+--------+--------+
|Adjusted earnings per share (pence) | 20.2p+--------+
| | | 16.6p|
+------------------------------------------------------------+--------+--------+
In the opinion of the directors the earnings per share figure of most use to
shareholders is that which is adjusted. This figure better allows the assessment
of operational performance, the analysis of trends over time, the comparison of
different businesses and the projection of future earnings.
11) Disposal groups classified as held for sale
Disposal groups classified as held for sale as at 31 December 2009 primarily
comprise the assets and liabilities associated with the cash solutions business
in Taiwan. At 31 December 2008 disposal groups classified as held for sale also
included the assets and liabilities associated with the manned guarding
businesses in France, which principally included Group 4 Securicor SAS. The sale
of Group 4 Securicor SAS was completed on 28 February 2009.
12) Analysis of net debt
A reconciliation of net debt to amounts in the consolidated balance sheet is
presented below:
+----------------------------------------------------------+---------+---------+
| | 2009 | 2008 |
| +---------+---------+
| | £m| £m|
+----------------------------------------------------------+---------+---------+
+----------------------------------------------------------+---------+---------+
|Cash and cash equivalents | 307.6 | 562.1 |
+----------------------------------------------------------+---------+---------+
|Investments | 84.4 | 92.7 |
+----------------------------------------------------------+---------+---------+
|Net cash and overdrafts included within disposal groups | 20.4 | (6.3)|
|classified as held for sale | | |
+----------------------------------------------------------+---------+---------+
|Net debt (excluding cash and overdrafts) included within | (13.2)| (1.0)|
|disposal groups classified as held for sale | | |
+----------------------------------------------------------+---------+---------+
|Bank overdrafts | (37.5)| (195.1)|
+----------------------------------------------------------+---------+---------+
|Bank loans | (661.9)| (965.7)|
+----------------------------------------------------------+---------+---------+
|Loan notes |(1,116.7)| (901.9)|
+----------------------------------------------------------+---------+---------+
|Fair value of loan note derivative financial instruments | 69.2 | 153.2 |
+----------------------------------------------------------+---------+---------+
|Obligations under finance leases | (85.7)| (85.7)|
+----------------------------------------------------------+---------+---------+
|Total net debt |(1,433.4)|(1,347.7)|
+----------------------------------------------------------+---------+---------+
+----------------------------------------------------------+---------+---------+
+----------------------------------------------------------+---------+---------+
|An analysis of movements in net debt in the year is presented below: |
+----------------------------------------------------------+---------+---------+
+----------------------------------------------------------+---------+---------+
| | 2009 | 2008 |
| +---------+---------+
| | £m| £m|
+----------------------------------------------------------+---------+---------+
+----------------------------------------------------------+---------+---------+
|(Decrease)/increase in cash, cash equivalents and bank | (37.9)| 56.3 |
|overdrafts per consolidated cash flow statement | | |
+----------------------------------------------------------+---------+---------+
|Purchase/(sale) of investments | 0.9 | (5.6)|
+----------------------------------------------------------+---------+---------+
|Increase in debt and lease financing | 0.6 | (160.2)|
+----------------------------------------------------------+---------+---------+
|Change in net debt resulting from cash flows | (36.4)| (109.5)|
+----------------------------------------------------------+---------+---------+
|Borrowings acquired with subsidiaries | (0.4)| (230.0)|
+----------------------------------------------------------+---------+---------+
|Net additions to finance leases | (19.7)| (17.1)|
+----------------------------------------------------------+---------+---------+
|Movement in net debt in the year | (56.5)| (356.6)|
+----------------------------------------------------------+---------+---------+
|Translation adjustments | (29.2)| (186.2)|
+----------------------------------------------------------+---------+---------+
|Net debt at the beginning of the year |(1,347.7)| (804.9)|
+----------------------------------------------------------+---------+---------+
|Net debt at the end of the year |(1,433.4)|(1,347.7)|
+----------------------------------------------------------+---------+---------+
Non GAAP measure - cash flow
The directors consider it is of assistance to shareholders to present an
analysis of the group's operating cash flow in accordance with the way in which
the group is managed, together with a reconciliation of that cash flow to the
net cash flow from operating activities as presented in the consolidated cash
flow statement.
Operating cash flow
For the year ended 31 December 2009
+--------------------------------------------------------------+-------+-------+
| | £m| £m|
+--------------------------------------------------------------+-------+-------+
+--------------------------------------------------------------+-------+-------+
|PBITA before share of profit from associates (group PBITA) | 499.1 | 411.6 |
+--------------------------------------------------------------+-------+-------+
|Depreciation and amortisation of intangible assets other than | 136.2 | 116.1 |
|acquisition-related | | |
+--------------------------------------------------------------+-------+-------+
|(Profit)/loss on disposal of property, plant and equipment and| (0.3)| 2.1 |
|intangible assets other than acquisition-related | | |
+--------------------------------------------------------------+-------+-------+
|Movement in working capital and provisions | (15.4)| (15.3)|
+--------------------------------------------------------------+-------+-------+
|Net cash flow from capital expenditure |(169.7)|(161.3)|
+--------------------------------------------------------------+-------+-------+
|Operating cash flow | 449.9 | 353.2 |
+--------------------------------------------------------------+-------+-------+
+--------------------------------------------------------------+-------+-------+
+--------------------------------------------------------------+-------+-------+
|Reconciliation of operating cash flows | 2009 | 2008 |
| +-------+-------+
| | £m| £m|
+--------------------------------------------------------------+-------+-------+
+--------------------------------------------------------------+-------+-------+
|Net cash flow from operating activities per consolidated cash | 509.2 | 373.0 |
|flow statement | | |
+--------------------------------------------------------------+-------+-------+
|Net cash flow from capital expenditure |(169.7)|(161.3)|
+--------------------------------------------------------------+-------+-------+
|Add-back cash flow from exceptional items and discontinued | 12.7 | 27.2 |
|operations | | |
+--------------------------------------------------------------+-------+-------+
|Add-back additional pension contributions | 29.9 | 32.3 |
+--------------------------------------------------------------+-------+-------+
|Add-back tax paid | 67.8 | 82.0 |
+--------------------------------------------------------------+-------+-------+
|Operating cash flow | 449.9 | 353.2 |
+--------------------------------------------------------------+-------+-------+
[HUG#1394193]
Final Results
| Source: G4S plc