In an attempt to stay relevant in a global economic environment where downturns in growth reign supreme, the country’s leading security solutions Group, G4S, is revising its strategy to defend and sustain its growth.
Announcing their financial results for the year ended 31 December on Friday, the Group did not reveal any plans to enter new markets, nor did they reveal the desire to introduce new products. Rather, they emphasised the need to focus on sales and the revenue pipeline as well as cost efficiencies which includes keeping overheads flat and improvement of cash flow to underpin growth.
The Group realised a modest growth of 3.8 percent between 2014 and 2015 with notable contributions coming from its systems, guarding and cash product lines at 31.1 percent, 30.2 percent and 29.3 percent respectively. With regard to keeping overheads flat, the Group cited the steps it has taken so far to meet that objective one being that if a position falls vacant, it is analysed and assessed to determine whether it is relevant to the organisation to warrant a replacement or be consolidated with the remaining posts. This exercise, according to the Group, promotes responsibility sharing among the existing personnel and contributes to keeping overheads lower.
The Group’s profit before tax grew by 8.8 percent between the same period, with the highest contributions made by cash, systems and guarding in that order. However due to the significant tax expense recorded at a growth of 34.7 percent the Group saw a big slash on its profit after tax, which grew by a marginal 2.4 percent. According to the Group, advance customer payments were received in the previous year which resulted in the income being taxed under the 2015 financial year even though the bills fall under the 2016 financial year.
A significant volume of the Group’s business is in the financial sector, and with the banks having lost their flavour in terms of profitability over the years, this has been to the detriment of G4S. The Group disclosed that the older and mature banks have established in-house infrastructure which reduces the need for their services. However, the group pointed out that an opportunity still lies in the smaller banks in outsourcing its services.