Group 4 Securicor unlocks more savings
Security firm Group 4 Securicor today said cost savings from its ground-breaking merger would beat initial estimates, but warned of tough trading in the UK.
The group – formed out of the tie-up of Securicor and Danish rival Group 4 Falck last July – said it now expected annual savings of £35m (€52m) against the £30m (€44.5m) previously thought, and said the integration had been completed “significantly” ahead of schedule.
It came as Group 4 posted a 20% rise in underlying profits to £112m (€166m) for the first half of its financial year, despite challenging market conditions.
Group 4 operates in more than 100 countries worldwide and employs more than 360,000 people. The bulk of its business consists of the provision of security guards and the movement of cash around countries under protection.
Overall, results from Group 4’s European security guard arm were described as good, with Sweden, Norway and Poland all returning to profitability after reporting losses in the same period last year.
In the United States, the firm reported good performance in all three sectors - government, commercial and nuclear – but added that the market remained tight and there continued to be pressure on margins.
Growth in France slowed to a modest level as the firm lost a number of contracts through aggressive price competition in the market.
Overall, underlying profits from manned security increased to £78.2m (€116m) in the six months to June 30 against £71.1m (€105.5m) previously. Profits at the cash services arm increased to £32.2m (€47.8m) from £24.3m (€36m) including a strong performance in the UK.
Group revenues at constant exchange rates increased to £1.97bn (€2.9bn) from £1.81bn (€2.7bn), while at the bottom line, pre-tax profits came in at £58.1m (€86.2m) against £42.1m (€62.5m).
Analyst Guy Hewett at Investec Securities said the results were marginally behind his expectations and that forecasts for the full year may have to be trimmed as a result.
