Top leading security solutions provider G4S Botswana says its business has come under immense pressure from government decisions and the slowed economic activities caused by the Covid-19 pandemic interventions.
According to the company’s recently released annual report, the security firm’s operations were greatly affected when some customers terminated their contracts amid a narrowing market characterised by insufficient growth in new sales opportunities. Further complicating matters has been lost business from the government, which is the biggest spender in the economy.
“The advent of the citizen economic empowerment bill by the government continued to limit the business’ ability to tap into the broader security industry with the public sector pie specifically reserved for hundred percent citizen-owned businesses; a factor that has now extended to the quasi-government sector with a lot of parastatals exiting historic contracts with our business,” said Mothusi Molokomme, who was appointed this year as G4S managing director.
The company’s major shareholder is G4S International UK Limited which holds 70 percent, while Botswana Public Officers Pension Fund (BPOPF) has a 9.96 percent stake. Other shareholders include Motor Vehicle Accident Fund (MVA), Debswana Pension Fund and Stanbic Botswana.
G4S Botswana’s revenue last year declined by 3 percent to P190 million, while profit before tax by 26 percent to P19.8 million. The manned security services business anchored the company’s performance with a revenue growth of 12 percent year on year despite the legislative challenges affecting the sector.
The most affected line of business was security systems installation and monitoring, which registered a 20 percent decline in revenue, down to intense competition from existing and new market entrants mainly on the alarm monitoring systems and lack of new opportunities for expansion.
The cash solutions business line’s revenues decreased by 5 percent with major customers in this sector moving towards allocating business to more than one service provider which was not historically the case, the company said.
“The facilities management business continued on its downward spiral shedding over 38 percent of comparative revenue to the prior year due to the 100 percent citizen-ownership requirement. A strategic decision to sell the business is at an advanced stage as there are no further prospects of revenue growth,” according to the company’s annual report.