G4S plc
Interim Results Announcement
January - June 2007
G4S plc, the international security solutions group, today announces its interim
results for the six months to 30 June 2007.
RESULTS HIGHLIGHTS
Good organic turnover growth of 7.5% (2006: 7.3%)
Group turnover* up 11.8% to £2,263.9 million (2006: £2,025.3m)
PBITA* up 15.9% to £139.5 million (2006: £120.4 m)
Margin* improved to 6.2% (2006: 5.9%)
Cash flow generation of £97.7 million, 71% of PBITA (2006: 85%)
Adjusted earnings per share* increased by 11.8% to 5.7p (2006: 5.1p)
Interim dividend up 24.9% to 2.11 pence per share DKK 0.2319 (2006: 1.69p/DKK
0.1863)
Strong performance achieved across all regions and service lines
New Markets PBITA* up 38%
Good progress made towards growth and margin targets
Expect positive momentum to continue into the second half
* at constant exchange rates
Nick Buckles, Chief Executive Officer, commented:
“We have had a very good first half with strong performances across all regions
and service lines, despite the weakening of the US dollar. We have made a
number of small and medium sized acquisitions in the last six months, mainly
targeted at adding further capabilities and expertise to the group - this
strategy will help us to continue our security solutions approach to the market.
We are pleased to be making good progress towards our published margin and
growth targets. As a result of our continuing growth, we have now broken the
500,000 employee threshold. We are very proud of our people and the high
quality security solutions they provide to major organisations and strategically
important locations around the world.
We expect the strong momentum achieved so far this year to continue into the
second half.”
For further enquiries, please contact:
Nick Buckles - Chief Executive Officer +44 (0) 1293 554400
Trevor Dighton - Chief Financial Officer
Debbie McGrath - Group Communications Director
Media enquiries:
Kevin Smith - Citigate Dewe Rogerson +44 (0) 7973 672649
Notes to Editors:
G4S plc is an international security solutions group, operating in over 100
countries throughout the world and employing over 500,000 people. G4S is a
market leader in the provision of security services and cash services in many of
the countries in which it operates. 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, 10 Paternoster Square, London, EC4M 7LS. A telephone
dial-in facility is available on +44 (0) 20 7162 0125.
FINANCIAL SUMMARY
Results
The results which follow have been prepared under International Financial
Reporting Standards (IFRS), as adopted by the European Union.
Group Turnover
--------------------------------------------------------------------------------
| Turnover of Continuing Businesses | H107 | H106 |
| | £m | £m |
--------------------------------------------------------------------------------
| Turnover at constant exchange | 2,263.9 | 2,025.3 |
| rates | | |
--------------------------------------------------------------------------------
| Exchange difference | - | 100.2 |
--------------------------------------------------------------------------------
| Total continuing business | 2,263.9 | 2,125.5 |
| turnover | | |
--------------------------------------------------------------------------------
Turnover, at constant exchange rates, increased by 11.8% to £2,263.9 million.
Organic turnover growth was 7.5%.
--------------------------------------------------------------------------------
| Organic Turnover | Europe | North | New Markets | Total |
| Growth * | | America | | |
--------------------------------------------------------------------------------
| Security Services | 4.7% | 6.5% | 13.0% | 6.7% |
--------------------------------------------------------------------------------
| Cash Services | 10.4% | (4.2%) | 21.5% | 10.5% |
--------------------------------------------------------------------------------
| Total | 6.2% | 5.7% | 14.4% | 7.5% |
--------------------------------------------------------------------------------
* Calculated to exclude acquisitions and disposals, and at constant exchange
rates
Group Profit
--------------------------------------------------------------------------------
| PBITA * of Continuing Businesses | H107 | H106 |
| | £m | £m |
--------------------------------------------------------------------------------
| PBITA at constant exchange rates | 139.5 | 120.4 |
--------------------------------------------------------------------------------
| Exchange difference | - | 6.1 |
--------------------------------------------------------------------------------
| Total continuing business PBITA | 139.5 | 126.5 |
--------------------------------------------------------------------------------
| PBITA margin | 6.2% | 5.9% |
--------------------------------------------------------------------------------
* PBITA is defined as profit before interest, taxation, amortisation of
acquisition-related intangible assets and exceptional items
PBITA at constant exchange rates increased by 15.9% to £139.5 million. The
PBITA margin was 6.2%.
Cash Flow and Financing
--------------------------------------------------------------------------------
| Cash Flow | H107 | H106 |
| | £m | £m |
--------------------------------------------------------------------------------
| Operating cash flow | 97.7 | 106.5 |
--------------------------------------------------------------------------------
| Operating cash flow / PBITA | 71% | 85% |
--------------------------------------------------------------------------------
Operating cash flow was £97.7 million in the period, representing 71% of PBITA.
Net debt at the end of the period was £801.5 million (June 2006: £669.7m,
December 2006: £672.8m).
Adjusted Earnings Per Share
--------------------------------------------------------------------------------
| Adjusted Earnings per share | H107 | H106 at | H106 |
| | £m | constant | £m |
| | | exchange rates | |
| | | £m | |
--------------------------------------------------------------------------------
| PBITA from continuing | 139.5 | 120.4 | 126.5 |
| operations | | | |
--------------------------------------------------------------------------------
| Interest (before pensions) | (27.8) | (19.2) | (21.2) |
--------------------------------------------------------------------------------
| Tax | (31.9) | (30.9) | (32.1) |
--------------------------------------------------------------------------------
| Minorities | (7.1) | (5.8) | (6.0) |
--------------------------------------------------------------------------------
| Adjusted profit | 72.7 | 64.5 | 67.2 |
| attributable to | | | |
| shareholders | | | |
--------------------------------------------------------------------------------
| Average number of shares | 1,280.4 | 1,266.3 | 1,266.3 |
| (m) | | | |
--------------------------------------------------------------------------------
| Adjusted EPS (p) | 5.7p | 5.1p | 5.3p |
--------------------------------------------------------------------------------
Adjusted earnings per share increased by 7.5%, or by 11.8% at constant exchange
rates.
BUSINESS ANALYSIS
Security Services
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Turnover | PBITA | Margins | Organic |
| £m | £m | | Growth |
--------------------------------------------------------------------------------
| H107 | H106 | H107 | H106 | H107 | H106 | H107 |
--------------------------------------------------------------------------------
| * At | |
| constant | |
| exchange | |
| rates | |
--------------------------------------------------------------------------------
| Europe * | 910.7 | 855.3 | 49.4 | 45.9 | 5.4% | 5.4% | 4.7% |
--------------------------------------------------------------------------------
| North | 515.8 | 481.5 | 27.7 | 25.8 | 5.4% | 5.4% | 6.5% |
| America * | | | | | | | |
--------------------------------------------------------------------------------
| New Markets | 371.2 | 288.6 | 29.7 | 22.3 | 8.0% | 7.7% | 13.0% |
| * | | | | | | | |
--------------------------------------------------------------------------------
| Total | 1,797 | 1,625 | 106.8 | 94.0 | 5.9% | 5.8% | 6.7% |
| Security | .7 | .4 | | | | | |
| Services * | | | | | | | |
--------------------------------------------------------------------------------
| Exchange | - | 88.8 | - | 5.1 | |
| differences | | | | | |
--------------------------------------------------------------------------------
| At actual | 1,797 | 1,714 | 106.8 | 99.1 | |
| exchange | .7 | .2 | | | |
| rates | | | | | |
--------------------------------------------------------------------------------
The security services division continued its strong performance with good
organic growth of 6.7% and margins improving to 5.9%.
Europe
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Turnover | PBITA | Margins | Organic |
| £m | £m | | Growth |
--------------------------------------------------------------------------------
| H107 | H106 | H107 | H106 | H107 | H106 | H107 |
--------------------------------------------------------------------------------
| * At constant | |
| exchange rates | |
--------------------------------------------------------------------------------
| UK & Ireland* | 283.9 | 261.2 | 21.8 | 19.6 | 7.7% | 7.5% | 6.2% |
--------------------------------------------------------------------------------
| Continental | 626.8 | 594.1 | 27.6 | 26.3 | 4.4% | 4.4% | 4.1% |
| Europe * | | | | | | | |
--------------------------------------------------------------------------------
| Total Europe * | 910.7 | 855.3 | 49.4 | 45.9 | 5.4% | 5.4% | 4.7% |
--------------------------------------------------------------------------------
Organic growth in Europe was 4.7% compared to 4.5% in the same period last year.
Margins were maintained at 5.4%.
There was strong organic growth in the UK & Ireland as the benefit of a single
approach to the market across our security services and justice services product
lines began to show positive results. There were a number of acquisitions made
in the UK in the first half, adding further capabilities to the business mix.
The business became the UK's largest event security company in the period.
Margins also improved to 7.7%.
The Netherlands continued to build on its 2006 success with organic growth of
over 6% and two capability-building acquisitions in the fire and safety sectors.
Margins also improved significantly over the prior year. Luxembourg had a very
strong first half in terms of organic growth and margin improvement.
There was also a solid performance in Belgium, as a result of good cost control
and improved efficiencies. In Denmark, margins were in line with the prior year
and organic growth was solid as the benefits of combining the security systems
and security services businesses began to take effect.
Restructuring continues in France and Sweden to ensure that we build a long term
sustainable improvement in the business performance. Germany has stabilised in
the first half and performed well compared to the first half of 2006.
Whilst the performance in Greece has improved on 2006, challenges remain in the
market relating to the impact of local employment legislation.
The Baltic States had another strong half year with double digit organic growth
and very good margin improvements. Turkey continued to grow strongly and we
commenced operations in Serbia during the period with a small market entry
acquisition.
North America
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Turnover | PBITA | Margins | Organic |
| £m | £m | | Growth |
--------------------------------------------------------------------------------
| H107 | H106 | H107 | H106 | H107 | H106 | H107 |
--------------------------------------------------------------------------------
| * At constant | |
| exchange rates | |
--------------------------------------------------------------------------------
| North America * | 515.8 | 481.5 | 27.7 | 25.8 | 5.4% | 5.4% | 6.5% |
--------------------------------------------------------------------------------
Organic growth in North America was 6.5% overall and margins were maintained at
5.4%.
The United States businesses performed very well overall with a number of major
contract wins in the commercial sector providing strong growth and margin
improvements. Growth in the government business was lower than the same period
in the prior year, mainly due to the additional revenues relating to hurricane
support in the first half of 2006, however a number of recent contract wins and
re-bids have secured future growth.
In Canada the business performed in line with our expectations including a new
business win with IBM and some project work relating to local rail strikes.
New Markets
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Turnover | PBITA | Margins | Organic |
| £m | £m | | Growth |
--------------------------------------------------------------------------------
| H107 | H106 | H107 | H106 | H107 | H106 | H107 |
--------------------------------------------------------------------------------
| * At constant | |
| exchange rates | |
--------------------------------------------------------------------------------
| Asia * | 126.1 | 113.7 | 10.4 | 8.2 | 8.2% | 7.2% | 10.5% |
--------------------------------------------------------------------------------
| Middle East * | 84.7 | 56.1 | 7.4 | 5.4 | 8.7% | 9.6% | 15.0% |
--------------------------------------------------------------------------------
| Africa * | 84.6 | 66.9 | 7.1 | 5.6 | 8.4% | 8.4% | 11.7% |
--------------------------------------------------------------------------------
| Latin America & | 75.8 | 51.9 | 4.8 | 3.1 | 6.3% | 6.0% | 18.1% |
| Caribbean * | | | | | | | |
--------------------------------------------------------------------------------
| Total New | 371.2 | 288.6 | 29.7 | 22.3 | 8.0% | 7.7% | 13.0% |
| Markets * | | | | | | | |
--------------------------------------------------------------------------------
In New Markets organic growth was 13% and margins improved to 8.0% from 7.7% in
the same period last year. A number of acquisitions were made across the region
during the first half, the most significant of those being in Saudi Arabia,
Africa, Pakistan and Mexico, bringing overall turnover growth to 29%.
Organic growth in Asia was 11% and margins improved strongly to 8.2%. Macau
continues to benefit from a strong local economy and a fast-growing tourist
industry leading to organic growth of over 20% and strong margins. Indonesia
also experienced growth of over 20% and India continued to grow strongly at 29%.
In Hong Kong the business is much improved on the prior year and we have
finalised the integration of a systems acquisition to complete our security
solutions capability.
In the Middle East there was organic growth of 15% in the period with the key
businesses in Saudi Arabia, Kuwait and the UAE all performing well. Margins
were slightly lower than the same period last year at 8.7%, due to the
acquisition of a facilities management business in Saudi Arabia changing the
service mix.
In Africa organic growth was 12% and margins were maintained at 8.4%. In South
Africa the business is much improved on the same period last year now that the
industrial unrest appears to have settled. Good growth and margin improvements
were also achieved in Kenya and Nigeria. A number of acquisitions are being
integrated in many countries across the region, consolidating our position as
the leading security solutions provider in Africa.
The Latin America & Caribbean region achieved organic growth of 18% and margins
improved on the prior year to 6.3%. Argentina continues to grow strongly as a
result of increased business in the oil & gas sector where we provide specialist
services to our customers. In Colombia the business continues to benefit from
growth in the provision of infrastructure for toll collection as tourism
continues to grow in the country. Chile has now become our second largest
business in the region with the acquisition of Segel in the second half of 2006.
A strong overall performance was achieved in the security services division,
with the solid performances in Europe and North America being amplified by an
outstanding performance from New Markets.
Cash Services
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Turnover | PBITA | Margins | Organic |
| £m | £m | | Growth |
--------------------------------------------------------------------------------
| H107 | H106 | H107 | H106 | H107 | H106 | H107 |
--------------------------------------------------------------------------------
| * At | |
| constant | |
| exchange | |
| rates | |
--------------------------------------------------------------------------------
| Europe * | 337.0 | 303.6 | 32.8 | 29.9 | 9.7% | 9.8% | 10.4% |
--------------------------------------------------------------------------------
| North | 38.4 | 40.1 | 0.9 | 0.5 | 2.3% | 1.2% | (4.2%) |
| America * | | | | | | | |
--------------------------------------------------------------------------------
| New Markets | 90.8 | 56.2 | 13.7 | 9.1 | 15.1% | 16.2% | 21.5% |
| * | | | | | | | |
--------------------------------------------------------------------------------
| Total Cash | 466.2 | 399.9 | 47.4 | 39.5 | 10.2% | 9.9% | 10.5% |
| Services * | | | | | | | |
--------------------------------------------------------------------------------
| Exchange | - | 11.4 | - | 0.9 | |
| differences | | | | | |
--------------------------------------------------------------------------------
| At actual | 466.2 | 411.3 | 47.4 | 40.4 | |
| exchange | | | | | |
| rates | | | | | |
--------------------------------------------------------------------------------
The cash services division continued its very strong performance with excellent
overall organic growth of 10.5%. Margins were also strong at 10.2% compared to
9.9% in the same period last year.
Organic growth in Europe was 10.4%. In the UK, whilst attack levels continue to
be an issue, we maintained our strong margin performance and good growth record
in the first half of the year. Our ATM business grew by around 25% as a result
of customers moving towards a full service ATM proposition - we have recently
won a substantial contract to replenish bank branch ATMs for Halifax Bank of
Scotland which will commence in the last quarter of 2007. The UK cash
management business continues to perform strongly, based on high quality service
and a robust control environment.
The business in the Netherlands also performed well in the first half of the
year with good margins and a strong contract pipeline developing into the
remainder of 2007. In Sweden the implementation of the Swedbank ATM management
contract has been very successful and the business performance has improved
greatly compared to the same period last year.
Belgium, the Czech Republic, the Baltics and Hungary are all performing well
with good organic growth and strong margins. Belgium is benefiting from a
growing remote ATM market whilst the Czech Republic is growing well and
achieving synergies from integrating a small acquisition.
The business in Romania has grown by almost 100% in the period as a result of a
number of new contract wins, including the Romanian post office. We expect
further contract wins to follow.
Retail Solutions pilots have commenced successfully in the UK, Netherlands and
Finland. Customer reaction continues to be positive and we expect to launch this
project fully towards the end of 2007, with our first contracts commencing in
2008.
In North America, there was negative organic growth in Canada in a challenging
market, but margin improvement was achieved through good cost control. A new
CEO has been appointed recently and we expect the business performance to
improve in the second half of the year.
In New Markets organic growth was very strong at 21.5% and margins were also
good at over 15%. There were excellent results across the region in the Middle
East, Asia, Latin America and Africa.
The acquisition of Fidelity Cash Management in South Africa has gone extremely
well and the business continues to perform strongly, building on its market
leading position in a growing market place. In Malaysia there is significant
growth in the ATM and bank outsourcing markets.
A very good performance was achieved overall in the cash services division,
demonstrating our market expertise in this area and our ability to spread best
practice throughout the group.
OTHER FINANCIAL ISSUES
Acquisitions
The group invested £99 million in acquisitions in the first half. The largest
of these were Fidelity Cash Management Services PTY in South Africa and Al Majal
Service Master LLC, a facilities management business, in Saudi Arabia.
Financing
The group's primary source of finance is a £1.1bn multicurrency revolving credit
facility provided by a consortium of lending banks at a margin of 0.225% over
Libor. The banks exercised their options to extend the term of this facility to
seven years from 28 June 2005. The facility will mature on 28 June 2012.
The group has other short term committed facilities of £40m and uncommitted
facilities of £389m.
On the 1 March 2007 the group completed a USD 550m Private Placement of Notes
which mature at various dates between 2014 and 2022 and bear interest at rates
between 5.77% and 6.06%.
As of 30 June 2007, net debt was £801m, representing gearing of 73%. The group
has sufficient borrowing capacity to finance organic and acquisitive growth.
Net interest payable on net debt in the six months to 30 June 2007 was £27.8m.
This is an increase of 31% over the 2006 cost of £21.2m due principally to the
rising cost of borrowing and the increase in the group's average gross debt.
The payment of the 2006 final dividend (£32m) was brought forward to June this
year from July. This impacted on the total cash flow in the first half.
The group's average cost of gross borrowings in H107 was 5.4% compared to 4.5%
in H106. The cost as at 30 June 2007, was 5.6%
Also included within financing is net interest income of £2.8m (2006: cost of
£0.6m) in respect of movements in the group's retirement benefit obligations.
Taxation
Tax has been provided for at the estimated effective tax rate for the full year
of 28.6%, which is in line with the effective tax rate for the year to 31
December 2006.
Pensions
At 30 June 2007 the group's funding shortfall on defined benefit pension
obligations on the valuation basis specified in IAS19 Employee Benefits was £55m
before tax or £39m after tax, compared to £226m and £158m respectively at 31
December 2006. The value of the assets in the funds increased by £73m in the
six months, including additional cash contributions of £22.5m, and the rate at
which the liabilities are discounted in the UK increased from 5.2% to 5.9%.
Additional cash contributions will amount to £26m in total for 2007. This level
of contribution will be reviewed annually and reassessed formally following the
completion of the next actuarial valuations which for the Group 4 scheme is in
respect of 31 March 2007 and for the Securicor scheme is in respect of 5 April
2009.
Dividend
The Board has declared an interim dividend for 2007 of 2.11p per share (DKK
0.2319) payable on 16 November 2007.
REVIEW AND OUTLOOK
We have made a very strong start to the year across all service lines with good
organic growth and with margins moving towards our published target. Cash flow
in the first half was slightly behind that of the prior year, but we are
confident that we will achieve our target for the full year.
We have made a number of acquisitions this year, adding further capability and
expertise to our business, which enhances our ability to deliver complex
security solutions to our customers around the world.
We have broken through the 500,000 employee mark and are proud of the high
quality service our employees provide to our customers at important locations
around the world. It is their focus and expertise which supports our strong
business performance.
We are confident that the strong results achieved in the first half will be
maintained throughout the year. We will continue to make appropriate
acquisitions to enhance our capabilities and build on our strong, existing
business platforms across the globe.
Overall we are very satisfied with our performance so far this year and are
excited about the further development of the group.
29 August 2007
G4S plc
Unaudited interim results announcement
For the six months ended 30 June 2007
Consolidated income statement
For the six months ended 30 June 2007
--------------------------------------------------------------------------------
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | Note | £m | £m | £m |
| | s | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Continuing operations | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue | 2 | 2,263.9 | 2,125.5 | 4,301.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit from operations before | | 138.1 | 125.0 | 272.0 |
| amortisation of acquisition-related | | | | |
| intangible assets and share of | | | | |
| profit from associates | | | | |
--------------------------------------------------------------------------------
| Share of profit from associates | | 1.4 | 1.5 | 2.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit from operations before | 2 | 139.5 | 126.5 | 274.8 |
| amortisation of acquisition-related | | | | |
| intangible assets (PBITA) | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Amortisation of acquisition-related | | (18.9) | (17.3) | (36.0) |
| intangible assets | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit from operations before | 2, 3 | 120.6 | 109.2 | 238.8 |
| interest and taxation (PBIT) | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Finance income | 6 | 45.0 | 38.6 | 81.0 |
--------------------------------------------------------------------------------
| Finance costs | 7 | (70.0) | (60.4) | (121.8) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit from operations before | | 95.6 | 87.4 | 198.0 |
| taxation (PBT) | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Taxation: | | | | |
--------------------------------------------------------------------------------
| - Before amortisation of | (32.7) | (31.9) | (67.1) |
| acquisition-related intangible assets | | | |
--------------------------------------------------------------------------------
| - On amortisation of | | 5.5 | 5.2 | 10.8 |
| acquisition-related intangible | | | | |
| assets | | | | |
--------------------------------------------------------------------------------
| | 8 | (27.2) | (26.7) | (56.3) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit from continuing operations | | 68.4 | 60.7 | 141.7 |
| after taxation | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Loss from discontinued operations | 4 | - | (4.9) | (31.8) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit for the period | | 68.4 | 55.8 | 109.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | | |
--------------------------------------------------------------------------------
| Equity holders of the parent | | 61.3 | 49.8 | 96.5 |
--------------------------------------------------------------------------------
| Minority interests | | 7.1 | 6.0 | 13.4 |
--------------------------------------------------------------------------------
| Profit for the period | | 68.4 | 55.8 | 109.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share attributable to | 10 | | | |
| ordinary equity shareholders | | | | |
| of the parent | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Basic | | 4.8p | 3.9p | 7.6p |
--------------------------------------------------------------------------------
| Diluted | | 4.8p | 3.9p | 7.6p |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dividends declared and proposed in | 9 | | | |
| respect of the period | | | | |
--------------------------------------------------------------------------------
| Interim dividend of 2.11p per share | | 27.0 | 21.4 | 21.4 |
| (2006: 1.69p per share) | | | | |
--------------------------------------------------------------------------------
| Final dividend (2006: 2.52p per | | - | - | 32.3 |
| share) | | | | |
--------------------------------------------------------------------------------
| Total | | 27.0 | 21.4 | 53.7 |
--------------------------------------------------------------------------------
Condensed consolidated balance sheet
As at 30 June 2007
--------------------------------------------------------------------------------
| | | As at | As at | As at |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | Note | £m | £m | £m |
| | s | | | |
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| Goodwill | | 1,264.6 | 1,175.5 | 1,170.9 |
--------------------------------------------------------------------------------
| Other acquisition-related intangible | | 222.0 | 233.2 | 220.6 |
| assets | | | | |
--------------------------------------------------------------------------------
| Other intangible assets | | 22.4 | 26.5 | 22.2 |
--------------------------------------------------------------------------------
| Property, plant and equipment | | 365.1 | 346.3 | 355.0 |
--------------------------------------------------------------------------------
| Investment in associates | | 9.6 | 3.9 | 7.3 |
--------------------------------------------------------------------------------
| Trade and other receivables | | 118.5 | 154.0 | 165.6 |
--------------------------------------------------------------------------------
| | | 2,002.2 | 1,939.4 | 1,941.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Inventories | | 50.7 | 37.9 | 49.9 |
--------------------------------------------------------------------------------
| Trading investments | | 72.8 | 64.5 | 73.7 |
--------------------------------------------------------------------------------
| Trade and other receivables | | 856.4 | 797.4 | 798.9 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | | 306.9 | 255.2 | 307.5 |
--------------------------------------------------------------------------------
| Assets classified as held for sale | 11 | 22.3 | - | - |
--------------------------------------------------------------------------------
| | | 1,309.1 | 1,155.0 | 1,230.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | | 3,311.3 | 3,094.4 | 3,171.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Bank overdrafts | | (97.1) | (77.9) | (97.5) |
--------------------------------------------------------------------------------
| Bank loans | | (44.3) | (69.2) | (70.1) |
--------------------------------------------------------------------------------
| Obligations under finance leases | | (12.5) | (10.3) | (13.6) |
--------------------------------------------------------------------------------
| Dividends declared | | - | (28.3) | - |
--------------------------------------------------------------------------------
| Trade and other payables | | (745.4) | (686.2) | (733.9) |
--------------------------------------------------------------------------------
| Provisions | | (69.6) | (73.3) | (82.5) |
--------------------------------------------------------------------------------
| Liabilities associated with assets | 11 | (13.2) | - | - |
| classified as held for sale | | | | |
--------------------------------------------------------------------------------
| | | (982.1) | (945.2) | (997.6) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Bank loans | | (713.6) | (799.7) | (830.3) |
--------------------------------------------------------------------------------
| Loan notes | | (274.1) | - | - |
--------------------------------------------------------------------------------
| Obligations under finance leases | | (40.3) | (32.3) | (42.5) |
--------------------------------------------------------------------------------
| Trade and other payables | | (30.1) | - | (1.0) |
--------------------------------------------------------------------------------
| Provisions | | (174.1) | (343.5) | (328.7) |
--------------------------------------------------------------------------------
| | | (1,232.2 | (1,175.5 | (1,202.5 |
| | | ) | ) | ) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | | (2,214.3 | (2,120.7 | (2,200.1 |
| | | ) | ) | ) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net assets | | 1,097.0 | 973.7 | 971.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share capital | | 320.2 | 318.0 | 320.0 |
--------------------------------------------------------------------------------
| Share premium and reserves | | 748.0 | 622.3 | 615.2 |
--------------------------------------------------------------------------------
| Equity attributable to equity | 12 | 1,068.2 | 940.3 | 935.2 |
| holders of the parent | | | | |
--------------------------------------------------------------------------------
| Minority interests | | 28.8 | 33.4 | 36.3 |
--------------------------------------------------------------------------------
| Total equity | | 1,097.0 | 973.7 | 971.5 |
--------------------------------------------------------------------------------
Condensed consolidated cash flow statement
For the six months ended 30 June 2007
--------------------------------------------------------------------------------
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | Note | £m | £m | £m |
| | s | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit from continuing operations | | 95.6 | 87.4 | 198.0 |
| before taxation | | | | |
--------------------------------------------------------------------------------
| Trading loss from discontinued | | - | (7.0) | (16.1) |
| operations before taxation | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Adjustments for: | | | | |
--------------------------------------------------------------------------------
| Finance income | | (45.0) | (38.6) | (81.0) |
--------------------------------------------------------------------------------
| Finance costs | | 70.0 | 60.4 | 121.8 |
--------------------------------------------------------------------------------
| Finance costs attributable to | | - | 0.6 | 1.1 |
| discontinued operations | | | | |
--------------------------------------------------------------------------------
| Depreciation of property, plant and | | 44.0 | 41.0 | 82.8 |
| equipment | | | | |
--------------------------------------------------------------------------------
| Amortisation of acquisition-related | | 18.9 | 17.3 | 36.0 |
| intangible assets | | | | |
--------------------------------------------------------------------------------
| Amortisation of other intangible | | 3.8 | 3.7 | 7.4 |
| assets | | | | |
--------------------------------------------------------------------------------
| Other operating cash flow movements | | - | (0.3) | 3.1 |
--------------------------------------------------------------------------------
| Operating cash flow before movements | | 187.3 | 164.5 | 353.1 |
| in working capital | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net working capital movement | | (71.6) | (70.0) | (85.7) |
--------------------------------------------------------------------------------
| Cash generated by operations | | 115.7 | 94.5 | 267.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Tax paid | | (29.8) | (38.4) | (70.3) |
--------------------------------------------------------------------------------
| Net cash flow from operating | | 85.9 | 56.1 | 197.1 |
| activities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investing activities | | | | |
--------------------------------------------------------------------------------
| Interest received | | 7.1 | 5.8 | 11.5 |
--------------------------------------------------------------------------------
| Cash flow (to)/from associates | | (0.4) | 2.4 | 2.7 |
--------------------------------------------------------------------------------
| Net cash flow from capital | | (44.2) | (32.8) | (82.5) |
| expenditure | | | | |
--------------------------------------------------------------------------------
| Net cash flow from acquisitions and | | (98.7) | (46.4) | (83.3) |
| disposals | | | | |
--------------------------------------------------------------------------------
| Purchase of trading investments | | (2.3) | (8.5) | (21.8) |
--------------------------------------------------------------------------------
| Own shares purchased | | - | - | (3.1) |
--------------------------------------------------------------------------------
| Net cash used in investing | | (138.5) | (79.5) | (176.5) |
| activities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financing activities | | | | |
--------------------------------------------------------------------------------
| Share issues | | 0.9 | 3.6 | 9.1 |
--------------------------------------------------------------------------------
| Dividends paid to minority interests | | (0.5) | (2.9) | (3.0) |
--------------------------------------------------------------------------------
| Dividends paid to equity | | (32.0) | - | (49.8) |
| shareholders of the parent | | | | |
--------------------------------------------------------------------------------
| Net increase in borrowings | | 122.8 | 28.0 | 95.1 |
--------------------------------------------------------------------------------
| Interest paid | | (30.6) | (28.5) | (59.3) |
--------------------------------------------------------------------------------
| Net cash flow from hedging financial | | (2.2) | 7.8 | 11.8 |
| instruments | | | | |
--------------------------------------------------------------------------------
| Repayment of obligations under | | (5.8) | (6.5) | (8.4) |
| finance leases | | | | |
--------------------------------------------------------------------------------
| Net cash flow from financing | | 52.6 | 1.5 | (4.5) |
| activities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net (decrease)/increase in cash, cash | - | (21.9) | 16.1 |
| equivalents and bank overdrafts | | | |
| 13 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash, cash equivalents and bank | | 210.0 | 205.1 | 205.1 |
| overdrafts at the beginning of the | | | | |
| period | | | | |
--------------------------------------------------------------------------------
| Effect of foreign exchange rate | | - | (5.9) | (11.2) |
| fluctuations on cash held | | | | |
--------------------------------------------------------------------------------
| Cash, cash equivalents and bank | | 210.0 | 177.3 | 210.0 |
| overdrafts at the end of the period | | | | |
--------------------------------------------------------------------------------
Consolidated statement of recognised income and expense
For the six months ended 30 June 2007
--------------------------------------------------------------------------------
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | | £m | £m | £m |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Exchange differences on translation | | (2.7) | (18.0) | (42.6) |
| of foreign operations | | | | |
--------------------------------------------------------------------------------
| Actuarial gains/(losses) on defined | | 147.1 | (22.7) | (33.4) |
| retirement benefit schemes | | | | |
--------------------------------------------------------------------------------
| Change in fair value of cash flow | | 4.0 | 6.3 | 1.1 |
| hedging financial instruments | | | | |
--------------------------------------------------------------------------------
| Change in fair value of net | | 0.3 | 3.7 | 11.6 |
| investment hedging financial | | | | |
| instruments | | | | |
--------------------------------------------------------------------------------
| Tax on items taken directly to | | (47.4) | 1.0 | (1.4) |
| equity | | | | |
--------------------------------------------------------------------------------
| Net income/(expense) recognised | | 101.3 | (29.7) | (64.7) |
| directly in equity | | | | |
--------------------------------------------------------------------------------
| Profit for the period | | 68.4 | 55.8 | 109.9 |
--------------------------------------------------------------------------------
| Net recognised income | | 169.7 | 26.1 | 45.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | | |
--------------------------------------------------------------------------------
| Equity holders of the parent | | 162.6 | 20.1 | 31.8 |
--------------------------------------------------------------------------------
| Minority interests | | 7.1 | 6.0 | 13.4 |
--------------------------------------------------------------------------------
| Net recognised income | | 169.7 | 26.1 | 45.2 |
--------------------------------------------------------------------------------
Notes to the interim results announcement
1) Basis of preparation and accounting policies
A resolution was passed at the 2007 Annual General Meeting, held on 31 May 2007,
to change the company's name from
Group 4 Securicor plc to G4S plc. These primary statements and selected notes
comprise the unaudited interim consolidated results of G4S plc (“the group”) for
the six months ended 30 June 2007. These interim financial results do not
comprise statutory accounts within the meaning of Section 240 of the Companies
Act 1985.
The comparative figures for the financial year ended 31 December 2006 are not
the company's statutory accounts for that year. Those accounts have been
reported on by the company's auditor and delivered to the registrar of
companies. The report of the auditor was (i) unqualified, (ii) did not contain a
reference to any matters to which the auditor drew attention by emphasis of
matter without qualifying their report, and (iii) did not contain any statement
under Section 237 of the Companies Act 1985.
The unaudited interim consolidated results of the group presented in this
interim announcement have been prepared in accordance with International
Financial Reporting Standards as adopted by the EU. As permitted, the group has
chosen not to present its results in accordance with IAS 34 Interim Financial
Reporting.
Details of the accounting policies applied are the same as those set out in the
group's Annual Report and Accounts 2006.
The comparative income statement for the six months ended 30 June 2006 has been
re-presented for operations qualifying as discontinued during the six months
ended 31 December 2006 and the six months ended 30 June 2007. The comparative
income statement for the year ended 31 December 2006 has been re-presented for
operations qualifying as discontinued during the six months ended 30 June 2007.
For the six months ended 30 June 2006, revenue has been reduced by £64.3m and
PBT has been increased by £7.0m compared to the figures published previously.
For the year ended 31 December 2006, revenue has been reduced by £51.7m and PBT
has been reduced by £2.0m compared to the figures previously published.
The presentation of revenue and PBITA by business segment for the six months
ended 30 June 2006 has been adjusted in respect of the classification as between
security services and cash services of certain activities in Latin America to be
consistent with the classification adopted for the year ended 31 December 2006
and the six months ended 30 June 2007.
2) Segmental analysis
The group operates in two core product areas: security services and cash
services. The group operates on a worldwide basis and derives a substantial
proportion of its revenue and PBIT from each of the following geographic
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 current management structure of the group is a combination of product area
and geography, within which the larger businesses generally report by product
area. The group's primary segmentation is therefore by business segment and its
secondary segmentation is by geography.
During 2006 the group integrated its manned security and security systems
businesses within Europe into a security services country reporting-line
structure, similar to the structure that was already in place within New
Markets.
Segment information for continuing operations is presented below:
Segment revenue
--------------------------------------------------------------------------------
| Revenue by business segment | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | | £m | £m | £m |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Security Services | | | | |
--------------------------------------------------------------------------------
| UK and Ireland | | 283.9 | 261.7 | 539.7 |
--------------------------------------------------------------------------------
| Continental Europe | | 626.8 | 603.6 | 1,236.6 |
--------------------------------------------------------------------------------
| Europe | | 910.7 | 865.3 | 1,776.3 |
--------------------------------------------------------------------------------
| North America | | 515.8 | 530.7 | 1,049.9 |
--------------------------------------------------------------------------------
| Middle East and Gulf States | | 84.7 | 62.0 | 125.5 |
--------------------------------------------------------------------------------
| Latin America and the Caribbean | | 75.8 | 56.1 | 119.5 |
--------------------------------------------------------------------------------
| Africa | | 84.6 | 78.3 | 152.6 |
--------------------------------------------------------------------------------
| Asia Pacific | | 126.1 | 121.8 | 236.0 |
--------------------------------------------------------------------------------
| New Markets | | 371.2 | 318.2 | 633.6 |
--------------------------------------------------------------------------------
| Total Security Services | | 1,797.7 | 1,714.2 | 3,459.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash Services | | | | |
--------------------------------------------------------------------------------
| Europe | | 337.0 | 306.8 | 630.8 |
--------------------------------------------------------------------------------
| North America | | 38.4 | 44.0 | 85.3 |
--------------------------------------------------------------------------------
| New Markets | | 90.8 | 60.5 | 126.0 |
--------------------------------------------------------------------------------
| Total Cash Services | | 466.2 | 411.3 | 842.1 |
--------------------------------------------------------------------------------
| Total revenue | | 2,263.9 | 2,125.5 | 4,301.9 |
--------------------------------------------------------------------------------
Notes to the interim results announcement (continued)
2) Segmental analysis (continued)
Segment result
--------------------------------------------------------------------------------
| PBITA by business segment | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | | £m | £m | £m |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Security Services | | | | |
--------------------------------------------------------------------------------
| UK and Ireland | | 21.8 | 19.7 | 44.1 |
--------------------------------------------------------------------------------
| Continental Europe | | 27.6 | 26.7 | 59.6 |
--------------------------------------------------------------------------------
| Europe | | 49.4 | 46.4 | 103.7 |
--------------------------------------------------------------------------------
| North America | | 27.7 | 28.6 | 62.7 |
--------------------------------------------------------------------------------
| Middle East and Gulf States | | 7.4 | 5.7 | 10.9 |
--------------------------------------------------------------------------------
| Latin America and the Caribbean | | 4.8 | 3.2 | 6.0 |
--------------------------------------------------------------------------------
| Africa | | 7.1 | 6.3 | 12.5 |
--------------------------------------------------------------------------------
| Asia Pacific | | 10.4 | 8.9 | 18.5 |
--------------------------------------------------------------------------------
| New Markets | | 29.7 | 24.1 | 47.9 |
--------------------------------------------------------------------------------
| Total Security Services | | 106.8 | 99.1 | 214.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash Services | | | | |
--------------------------------------------------------------------------------
| Europe | | 32.8 | 30.1 | 67.8 |
--------------------------------------------------------------------------------
| North America | | 0.9 | 0.5 | 1.8 |
--------------------------------------------------------------------------------
| New Markets | | 13.7 | 9.8 | 17.4 |
--------------------------------------------------------------------------------
| Total Cash Services | | 47.4 | 40.4 | 87.0 |
--------------------------------------------------------------------------------
| Total PBITA before head office costs | | 154.2 | 139.5 | 301.3 |
--------------------------------------------------------------------------------
| Head office costs | | (14.7) | (13.0) | (26.5) |
--------------------------------------------------------------------------------
| Total PBITA | | 139.5 | 126.5 | 274.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result by business segment | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total PBITA | | 139.5 | 126.5 | 274.8 |
--------------------------------------------------------------------------------
| Amortisation of acquisition-related | | (18.9) | (17.3) | (36.0) |
| intangible assets | | | | |
--------------------------------------------------------------------------------
| Total PBIT | | 120.6 | 109.2 | 238.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Security Services | | 98.4 | 93.4 | 198.2 |
--------------------------------------------------------------------------------
| Cash Services | | 36.9 | 28.8 | 67.1 |
--------------------------------------------------------------------------------
| Head office costs | | (14.7) | (13.0) | (26.5) |
--------------------------------------------------------------------------------
| Total PBIT | | 120.6 | 109.2 | 238.8 |
--------------------------------------------------------------------------------
3) Profit from operations before interest and taxation
The income statement can be analysed as follows:
--------------------------------------------------------------------------------
| Continuing operations | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | | £m | £m | £m |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue | | 2,263.9 | 2,125.5 | 4,301.9 |
--------------------------------------------------------------------------------
| Cost of sales | | (1,766.9 | (1,674.8 | (3,378.9 |
| | | ) | ) | ) |
--------------------------------------------------------------------------------
| Gross profit | | 497.0 | 450.7 | 923.0 |
--------------------------------------------------------------------------------
| Administration expenses | | (377.8) | (343.0) | (687.0) |
--------------------------------------------------------------------------------
| Share of profit from associates | | 1.4 | 1.5 | 2.8 |
--------------------------------------------------------------------------------
| Profit from operations before | | 120.6 | 109.2 | 238.8 |
| interest and taxation | | | | |
--------------------------------------------------------------------------------
Included within administration expenses is the amortisation charge for
acquisition-related intangible assets.
Notes to the interim results announcement (continued)
4) Discontinued operations
Operations qualifying as discontinued in the current period primarily comprise
G4S Cash Services (France) SAS, disposed of on 2 July 2007. Operations
qualifying as discontinued in the prior year primarily comprise the German cash
services business of G4S Geld-und Wertdienste GmbH, where terms were agreed for
divestment on 22 December 2006, and the business and assets of Cognisa
Transportation, Inc, disposed of on 28 December 2006.
5) Acquisitions
The group undertook a number of acquisitions in the current period. The total
book value of net assets acquired amounted to £11.8m, generating goodwill of
£121.1m, satisfied by a total consideration of £132.9m, of which £85.3m has been
paid in the period. The preliminary assessment of the fair value of assets and
liabilities acquired is still in progress.
Principal acquisitions in subsidiary undertakings include the purchase of
controlling interests in Fidelity Cash Management Services (PTY) Ltd, in South
Africa, and in Al Majal Service Master LLC, a facilities management business in
Saudi Arabia.
6) Finance income
--------------------------------------------------------------------------------
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | | £m | £m | £m |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest receivable | | 6.2 | 5.9 | 13.8 |
--------------------------------------------------------------------------------
| Expected return on defined | | 38.8 | 32.7 | 67.2 |
| retirement benefit scheme assets | | | | |
--------------------------------------------------------------------------------
| Total finance income | | 45.0 | 38.6 | 81.0 |
--------------------------------------------------------------------------------
7) Finance costs
--------------------------------------------------------------------------------
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | | £m | £m | £m |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total group borrowing costs | | (34.0) | (27.1) | (55.6) |
--------------------------------------------------------------------------------
| Finance costs on defined retirement | | (36.0) | (33.3) | (66.2) |
| benefit obligations | | | | |
--------------------------------------------------------------------------------
| Total finance costs | | (70.0) | (60.4) | (121.8) |
--------------------------------------------------------------------------------
8) Taxation
--------------------------------------------------------------------------------
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | | £m | £m | £m |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| UK taxation | | (3.1) | (2.6) | (16.8) |
--------------------------------------------------------------------------------
| Overseas taxation | (24.1) | (24.1) | (39.5) |
--------------------------------------------------------------------------------
| Total taxation expense | | (27.2) | (26.7) | (56.3) |
--------------------------------------------------------------------------------
Notes to the interim results announcement (continued)
9) Dividends
--------------------------------------------------------------------------------
| | | | Six | Six | Year |
| | | | months | months | ended |
| | | | ended | ended | |
--------------------------------------------------------------------------------
| | Pence | DKK | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | per | per | £m | £m | £m |
| | share | share | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Amounts recognised as | | | | | |
| distributions to equity | | | | | |
| holders of the parent in | | | | | |
| the period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Final dividend for the | 2.24 | 0.2435 | - | 28.3 | 28.3 |
| year ended 31 December | | | | | |
| 2005 | | | | | |
--------------------------------------------------------------------------------
| Interim dividend for the | 1.69 | 0.1863 | - | - | 21.5 |
| six months ended 30 June | | | | | |
| 2006 | | | | | |
--------------------------------------------------------------------------------
| Final dividend for the | 2.52 | 0.2766 | 32.0 | - | - |
| year ended 31 December | | | | | |
| 2006 | | | | | |
--------------------------------------------------------------------------------
| Total | | | 32.0 | 28.3 | 49.8 |
--------------------------------------------------------------------------------
An interim dividend of 2.11p (DKK 0.2319) per share, amounting to £27.0m, for
the six months ended 30 June 2007 will be paid on 16 November 2007 to
shareholders on the register on 12 October 2007.
10) Earnings per share attributable to ordinary shareholders of the parent
--------------------------------------------------------------------------------
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | | £m | £m | £m |
--------------------------------------------------------------------------------
| From continuing and discontinued | | | | |
| operations | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings | | | | |
--------------------------------------------------------------------------------
| Profit for the period attributable | | 61.3 | 49.8 | 96.5 |
| to equity holders of the parent | | | | |
--------------------------------------------------------------------------------
| Effect of dilutive potential | | 0.1 | 0.2 | 0.3 |
| ordinary shares (net of tax) | | | | |
--------------------------------------------------------------------------------
| Profit for the purposes of diluted | | 61.4 | 50.0 | 96.8 |
| earnings per share | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Number of shares (m) | | | | |
--------------------------------------------------------------------------------
| Weighted average number of ordinary | | 1,280.4 | 1,266.3 | 1,268.3 |
| shares | | | | |
--------------------------------------------------------------------------------
| Effect of dilutive potential | | 1.4 | 6.5 | 5.4 |
| ordinary shares | | | | |
--------------------------------------------------------------------------------
| Weighted average number of ordinary | | 1,281.8 | 1,272.8 | 1,273.7 |
| shares for the purposes of diluted | | | | |
| earnings per share | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share from continuing and | | | |
| discontinued operations (pence) | | | |
--------------------------------------------------------------------------------
| Basic | | 4.8p | 3.9p | 7.6p |
--------------------------------------------------------------------------------
| Diluted | | 4.8p | 3.9p | 7.6p |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| From adjusted earnings | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings | | | | |
--------------------------------------------------------------------------------
| Profit for the period attributable | | 61.3 | 49.8 | 96.5 |
| to equity holders of the parent | | | | |
--------------------------------------------------------------------------------
| Adjustment to exclude loss from | | - | 4.9 | 31.8 |
| discontinued operations | | | | |
--------------------------------------------------------------------------------
| Adjustment to exclude net retirement | | (2.0) | 0.4 | (0.7) |
| benefit finance costs (net of tax) | | | | |
--------------------------------------------------------------------------------
| Adjustment to exclude amortisation of | 13.4 | 12.1 | 25.2 |
| acquisition-related intangible assets | | | |
| (net of tax) | | | |
--------------------------------------------------------------------------------
| Adjusted profit for the period | | 72.7 | 67.2 | 152.8 |
| attributable to equity holders of | | | | |
| the parent | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Weighted average number of ordinary | | 1,280.4 | 1,266.3 | 1,268.3 |
| shares (m) | | | | |
--------------------------------------------------------------------------------
| Adjusted earnings per share (pence) | | 5.7p | 5.3p | 12.0p |
--------------------------------------------------------------------------------
11) Held for sale assets and liabilities
Held for sale assets and liabilities as at 30 June 2007 primarily comprise the
assets and liabilities associated with G4S Cash Services (France) SAS, disposed
of on 2 July 2007.
Notes to the interim results announcement (continued)
12) Reconciliation of equity attributable to equity holders of the parent
--------------------------------------------------------------------------------
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | | £m | £m | £m |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| At beginning of period | | 935.2 | 942.2 | 942.2 |
--------------------------------------------------------------------------------
| Net recognised income attributable | | 162.6 | 20.1 | 31.8 |
| to equity shareholders of the parent | | | | |
--------------------------------------------------------------------------------
| Shares issued | | 0.9 | 3.6 | 9.1 |
--------------------------------------------------------------------------------
| Dividends declared | | (32.0) | (28.3) | (49.8) |
--------------------------------------------------------------------------------
| Own shares purchased | | - | - | (3.1) |
--------------------------------------------------------------------------------
| Equity settled transactions | | 1.5 | 2.7 | 5.0 |
--------------------------------------------------------------------------------
| At end of period | | 1,068.2 | 940.3 | 935.2 |
--------------------------------------------------------------------------------
13) Analysis of net debt
A reconciliation of net debt to amounts in the condensed consolidated balance
sheet is presented below:
--------------------------------------------------------------------------------
| | | As at | As at | As at |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | | £m | £m | £m |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents | | 306.9 | 255.2 | 307.5 |
--------------------------------------------------------------------------------
| Trading investments | | 72.8 | 64.5 | 73.7 |
--------------------------------------------------------------------------------
| Net debt included within assets held | | 0.7 | - | - |
| for sale | | | | |
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Bank overdrafts and loans | | (141.4) | (147.1) | (167.6) |
--------------------------------------------------------------------------------
| Obligations under finance leases | | (12.5) | (10.3) | (13.6) |
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Bank loans | | (713.6) | (799.7) | (830.3) |
--------------------------------------------------------------------------------
| Loan notes | | (274.1) | - | - |
--------------------------------------------------------------------------------
| Obligations under finance leases | | (40.3) | (32.3) | (42.5) |
--------------------------------------------------------------------------------
| Total net debt | | (801.5) | (669.7) | (672.8) |
--------------------------------------------------------------------------------
An analysis of movements in net debt in the period is presented below:
--------------------------------------------------------------------------------
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | | £m | £m | £m |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| (Decrease)/increase in cash, cash | - | (21.9) | 16.1 |
| equivalents and bank overdrafts per | | | |
| condensed consolidated cash flow statement | | | |
--------------------------------------------------------------------------------
| Purchase of trading investments | | 2.3 | 8.5 | 21.8 |
--------------------------------------------------------------------------------
| Increase in debt and lease financing | | (117.0) | (21.5) | (86.7) |
--------------------------------------------------------------------------------
| Change in net debt resulting from | | (114.7) | (34.9) | (48.8) |
| cash flows | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Borrowings acquired with | | (19.9) | (0.8) | (2.5) |
| subsidiaries | | | | |
--------------------------------------------------------------------------------
| Net additions to finance leases | | (3.6) | (3.5) | (19.6) |
--------------------------------------------------------------------------------
| Movement in net debt in the period | | (138.2) | (39.2) | (70.9) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Translation adjustments | | 9.5 | 26.8 | 55.4 |
--------------------------------------------------------------------------------
| Net debt at the beginning of the | | (672.8) | (657.3) | (657.3) |
| period | | | | |
--------------------------------------------------------------------------------
| Net debt at the end of the period | | (801.5) | (669.7) | (672.8) |
--------------------------------------------------------------------------------
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 condensed
consolidated cash flow statement.
Operating cash flow
For the six months ended 30 June 2007
--------------------------------------------------------------------------------
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | | £m | £m | £m |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PBITA before share of profit from | | 138.1 | 125.0 | 272.0 |
| associates (group PBITA) | | | | |
--------------------------------------------------------------------------------
| Depreciation and amortisation of intangible | 47.6 | 43.2 | 91.1 |
| assets other than acquisition-related | | | |
| intangible assets | | | |
--------------------------------------------------------------------------------
| Increase in working capital and | | (43.8) | (28.9) | (42.6) |
| provisions | | | | |
--------------------------------------------------------------------------------
| Net cash flow from capital | | (44.2) | (32.8) | (82.5) |
| expenditure | | | | |
--------------------------------------------------------------------------------
| Operating cash flow | | 97.7 | 106.5 | 238.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Reconciliation of operating cash | | | | |
| flows | | | | |
--------------------------------------------------------------------------------
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
--------------------------------------------------------------------------------
| | | 30.06.07 | 30.06.06 | 31.12.06 |
--------------------------------------------------------------------------------
| | | £m | £m | £m |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash flow from operating activities per | 85.9 | 56.1 | 197.1 |
| condensed consolidated cash flow statement | | | |
--------------------------------------------------------------------------------
| Net cash flow from capital | | (44.2) | (32.8) | (82.5) |
| expenditure | | | | |
--------------------------------------------------------------------------------
| Add-back cash flow from exceptional | | 1.0 | 20.6 | 28.9 |
| items and discontinued operations | | | | |
--------------------------------------------------------------------------------
| Add-back additional pension | | 22.5 | 24.2 | 24.2 |
| contributions | | | | |
--------------------------------------------------------------------------------
| Other items | | 2.7 | - | - |
--------------------------------------------------------------------------------
| Add-back tax paid | | 29.8 | 38.4 | 70.3 |
--------------------------------------------------------------------------------
| Operating cash flow | | 97.7 | 106.5 | 238.0 |
--------------------------------------------------------------------------------
