Outsourcer says profits are up on last year, bidder argues its bosses have “run out of ideas”
Outsourcer G4S has attempted to ramp up its defence against a £3 billion hostile takeover from a smaller Canadian rival.
Montreal-based security group GardaWorld has gone directly to shareholders after it was rebuffed by G4S management three times. Today, G4S said its profits in the first eight months of this year are ahead of last year, despite disruption from the Covid pandemic.
The company added that group revenues were “just 1.9% lower” than last year and that the fall had been “more than offset” by cost cuts and reduced interest costs as its debt position has improved.
The outsourcer said: “The group’s underlying earnings which were in line with 2019 at the six months stage are now ahead of the prior year for the first eight months of 2020. Although the global economic outlook remains uncertain, the group’s performance in the first eight months demonstrates the strength of the business.”
G4S group chief executive Ashley Almanza said: “G4S today is a focused global business delivering technology-enabled security solutions.
“The benefits of our strategy, strong execution and timely response to Covid-19 continue to be reflected in the group’s results during 2020 with resilient revenue, earnings and cash flow.”
G4S said it had issued the update as part of a long-term drive to become more transparent over its performance, but the statement was likely to be seen as a direct riposte to GardaWorld’s bid.
Analysts at UBS said the figures implied revenues trends are improving since the depths of the Covid lockdown.
The outsourcer has argued that the takeover “significantly undervalues” the company. Garda – which is backed by private equity firm BC Partners and led by former pro baseball umpire Stephan Crétier – has offered 190p a share. The shares raced up on news of the bid, but today fell 2% to 189p.
A spokesman for GardaWorld said: “This is a management team that has simply run out of ideas. Covid has generally been positive for businesses like this and yet they use it as a fig leaf to disguise their own failings.”