G4S’ Group revenue went down 7 percent year-on-year, owing to slow economic growth attributable to COVID-19.
“While the COVID-19 pandemic has also had an impact on cash flow, the impact has not been significant. The implementation of the Trade Act effective 1 June 2020 as well as growing market sentiment that impose citizen ownership on the industry hinders the business to grow particularly in the manned guarding and cleaning management space. Note is made that the business received approximately BWP 9m in government assistance in the form of a wage subsidy as part of the national response to the COVID-19 pandemic. The company continues to focus on the implementation of integrated security solutions in order to drive margins and reduce costs,” said the company in a statement presenting the half year financial results for period ending June 30, 2020.
Chairperson of the board Gaone Machola and Managing Director Mokgethi Magapa said in their statement that they have adopted an approach of growing the business by increasing volumes and expanding service offering to the market as a whole, rather than increasing prices during these difficult times.
“The Board looks forward to reinvigorate our alarms business during the second half of the year through strategic partnerships with corporates and through the implementation of an agency model. We have also made significant strides in respect of the integration of our Deposita machines with various banking partners, allowing us to roll out services to customers across the country. Dividend Proposal Taking into consideration the impact of the COVID-19 pandemic and the business and financial uncertainty that it has wrought during the first half of the year, the Board has taken the decision not to declare an interim dividend,” they said.
Despite having liquid resources of P94 million as at 30 August 2020 based on the latest available management accounts, the company leadership took consideration of the unprecedented uncertainty in respect of the global economy to delay dividend declaration.
Going forward the group will focus on growing revenue in second half of the year as well as recovering long outstanding debts to bolster cash reserves. “Revenue growth of 15% is expected for MSS year on year, 2% for Cash Services, and a reduction in revenue for ESS and FMS service lines. The group’s strategic initiative will remain the acceleration of integrated security solution deployments with a long-term view of risk partnering with our customers on all fronts,” said the directors.