Monday, May 20, 2024

G4S Botswana sheds 21 percent stake in facilities management subsidiary

G4S Botswana has been forced to part ways with shares amounting to 21 percent in one of its subsidiaries, G4S Facilities Management Botswana, the company’s Managing Director, Michael Kampani said.

In June 2012, the company led by the past MD, Moraki Mokgosana, concluded a P12 million acquisition of Facilities Management Group (FMG), which comprised PS Cleaning and a facilities management division.

The Botswana Stock Exchange listed security solutions outfit held a 70 percent stake in the cleaning service company, PS Cleaning with the remaining 30 percent sold to local minorities after the acquisition.

Through the transaction G4S Botswana welcomed over 800 employees of PS Cleaning Facilities Management Services into its fold.

Along with G4S Botswana’s 2,700 workforces, the company continues to be one of the largest employers in the country with a complement surpassing 3,500 employees. Through the acquisition G4S Botswana has started to deliver a wider range of outsourced solutions to both new and existing markets.

However the arrival of FMG resulted in a decline in the G4S’s profitability for the six months of the year ended June, 2012. The Group’s statement of comprehensive income for the half year period that ended June 2012 shows that its profits before taxation (PBT) went down by 33.1 percent to P9.58 million from P14, 331 million recorded during the same period last year.

The group also recorded a decline in profit from operations of 32.2 percent from P12 077 million in 2011 to P8189 million this year. The entire decline has been attributed to the FMG transaction.

Sunday Standard understand that late last year, G4S Facilities Management Botswana had its trading license expiring which forced the company to review its share holding in order to compile with the licensing requirements relating to cleaning services.

Cleaning service has been classified under ‘reserved’ business for locals under section 15 (1) of the Trade Act, 2003 which was amended in 2010.

G4S Botswana group managing director confirmed on Friday that his company then had no option but to reduce its shareholding from 70 percent to 49 percent after selling shares valued at P2, 759, 739 to a citizen shareholder.

Meanwhile the group finance manager, Ofentse Mabote, said that the company posted a decline in profit after taxation during 2013 as the group faces some challenges to recover from the FMG business.

The group’s audited financial statement shows that its revenues were almost flat at P188 million while operating profit came down by 18 percent. At the same time, total assets declined by 9.8 percent mainly due to the decline of current assets.


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