G4S Botswana, the country’s leading security provider, saw its profits go head into the mud as vehicle costs and acquisition of the Facility Management Group (FMG ) weigh into its balance-sheet, the company said in┬á its audited financials.
According to the full year results to December 31, 2012, the company’s profit before tax┬á slumped┬á by 65.4 percent to P 10.1 million, however, total revenue jumped up 14.2 percent to P 187 million like for like.
The fall in profits was attributed to its move to reposition itself as it spent on a new fleet of vehicle and the acquisition of FMGÔÇöa cleaning services and facility management┬á companyÔÇöin an attempt to broaden its product offering.
A single charge of P 12 million related to the take-over of FMG is expected to position the company for the much talked about privatisation plan by government.
“With cost containment measures, the pipeline of new business, the newly acquired business anticipated an increase in the footprint of the business, we are confident that the business will continue to achieve growth in operations and also improve profitability in 2013,” a statement signed by G4S Chairman, Lebang Mpotokwane, stated.
The Botswana Stock Exchange listed entity’s financial statements revealed that vehicle-related costs “form a major component of the overall costs”, and the group failed to recover the full effect of such price increase through rate reviews.
However, revenue growth of 14.2 percent was achieved during the year of challenging market conditions from P163 702 million in 2011 to P186 989 million in 2012. It was the result of increased business activity and contribution in the second half of the year from the acquisition of FMG.
On the dividends, G4S Directors recommended a final special dividend of 7.37 thebe per share and the recommended special dividend of 7.37 thebe per share resulting in a full┬á year dividend of┬á 14.74 thebe per share.
┬áMeanwhile, former Managing Director, Moraki Mokgosana, resigned from the company’s top post as of 31st January 2013. Mokgosana tendered his resignation in September 2012 and, having been handing to the Regional Finance Director, Sean Holmes, who has assumed the post of Acting Managing Director and to date a replacement has not been identified.
The company closed the week Friday one thebe off at 569 thebe per share.