Monday, June 1, 2020

G4S Botswana: The future is not “secure” post Covid-19

The country’s leading security outfit, G4s says while the private security services industry is allowed to continue operation under the State of Emergency regulations, the wide-ranging impact of the economic ramifications of this pandemic on its customers, employees and suppliers means that the Group’s business will be significantly impacted.

G4s Managing Director – Mokgethi Magapa said that some determinations were made from the assessment carried out to determine areas of greatest impact from the COVID-19 pandemic. He spoke about reduced demand for asset-in-transit and cleaning services during period of limited economic activity allowed under the lockdown period of the State of Emergency, as many customers would not be operating as per normal.

He stated that ongoing reduced demand for services from customers operating in industries most heavily impacted by the restrictions on travel and even “strict social distancing”, such as travel, leisure, hoteling and conferencing;

“Reduced ability to afford services, especially from individual and SMMEs customers resulting in termination of services and increased uncollectable debt,” he stated.

He added that meeting significant costs of the Group’s business establishment, including manpower costs and vital costs to priorities the health and safety of its workforce. Magapa stated that the group has identified a number of measures available to it to limit the negative impact of these matters on its business.

Magapa further stated that business growth opportunities arising from the increased need for the Group’s hygiene services and manned security arising from the public health situation, as well as other new business gains made prior to declaration of the State of Emergency.

He is of the view that the stabilization of the business over the last three years has delivered a very solid and stable run-rate business, which has created a great launch pad for their 5-year strategy launched last year.

“We remain alive to the implementation of the Private Securities Act (April 2020) which will level the playing field and even give us further impetus given the level of regulatory compliance that we are accustomed to,” he stated.

Meanwhile, G4s Group’s Audited Financial Statements for the year ended 31 December 2019 revenue relatively remained stable at 0.15 percent growth at P206.4 million while administrative expenses decreased by 21 percent to P39.8 m from P50.1 m the previous year. Electronic Security Solutions (ESS) revenue increased by 8.35 percent to P61.1m from P56.6 m while Manned Security Services (MSS) revenue increased by 10 percent to P74.1 m from P67.6m. Profit before Tax (PBT) decreased by 28 percent to P27.8 million from P38.8 million in 2018. 

“Our Cash 360 (Deposita) business which continues to do well will be revamped and integrated into mainstream banking systems to offer our customers value for their money,” Mogapa stated.

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