UK's private security firm G4S Plc (GFS.L, GFSZY.PK) Wednesday reported a sharp decline in full-year 2012 profit, reflecting mainly a loss related to Olympic games security contract. Total revenues, however, climbed about 10 percent.
Separately, the company said Ashley Almanza, former Chief Financial Officer of BG Group, will join the board as an executive director and will succeed Trevor Dighton as CFO, effective May 1, 2013. Almanza would also serve as the Risk Committee member.
Dighton, who signalled his intention to retire as CFO and from the board at the age of 65, would continue to work for the group to conclude a number of strategic projects and to ensure a smooth handover to Almanza.
Commenting on the annual results, Nick Buckles, chief executive officer of the company said, "Our 2012 financial results reflect the significant exceptional costs associated with the Olympic contract and our overhead reduction programme together with the large impairment charge related to the discontinued US Government Solutions business."
Looking ahead, G4S expects the outlook for Continental European markets to continue to be challenging. However, the current 3.5 billion pounds per annum contract pipeline provide confidence in the outlook for the group, it said.
Announcing its preliminary results, the company said its profit before tax for the year fell to 175 million pounds from 257 million pounds in the previous year. On a per share basis, earnings were 3.4 pence, sharply down from 12.9 pence per share in 2011.
For the year, the company recorded Olympic games contract loss of 70 million pounds and related costs of 18 million pounds, resulting in exceptional loss of 88 million pounds.
Last month, G4S agreed to a financial settlement with the London Organising Committee of the Olympic Games and Paralympic Games or 'LOCOG' concerning the provision of the security workforce for the London 2012 Olympic & Paralympic Games. The firm had been heavily criticized for its weak handling of the security contract.
Excluding the Olympic Games contract, adjusted earnings for 2012 totaled 21.2 pence per share, while the company posted 21.3 pence per share a year ago.
However, total revenues climbed 10.4 percent to 7.5 billion pounds. Turnover, excluding Olympics grew 8.1 percent to 7.3 billion pounds. Organic growth was 6.9 percent.
Operating margin was 7.1 percent, compared to 7.2 percent a year earlier.
The board has also recommended a final dividend of 5.54 pence, an increase of 8 percent from last year. This will bring the total dividend to 8.96 pence, representing an increase of 5 percent on 2011.
GFS.L is currently trading at 299.3 pence, down 2.67 percent, on a volume of 3.78 million shares.
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