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G4S presents 2018 segmental results reflecting the restatement for IFRS 16

G4S presents 2018 segmental results reflecting the restatement for IFRS 16

3 July 2019

G4S presents 2018 segmental results reflecting the restatement for IFRS 16 – Leases, recent business disposals, re-classification of onerous contracts and foreign exchange rates

Ahead of the announcement of its half year 2019 results on 9 August 2019, to aid comparison with the results of prior periods, a summary of the Group’s results for H1 2018 and FY 2018 based on alternative performance measures, reflecting the adoption of IFRS 16 – Leases, businesses sold and the re-classification of onerous contracts, presented at average exchange rates for the six months ended 30 June 2019 is set out below:

£mHY 2018FY 2018
  

Revenue
Adjusted PBITA 

EPS
 

Revenue
Adjusted PBITA 

EPS
       
Underlying results as previously reported3,5992127.47,28947416.7
Restatement for IFRS 16 - Leases-10(0.1)-24(0.1)
Business disposals(52)40.1(7)(1)(0.1)
Onerous contract re-classification 610.1---
Underlying results at actual exchange rates3,5532277.47,28249716.5
Exchange differences2830.12120.1
Underlying results at June 2019 exchange rates3,5812307.67,30349916.6

The adoption of IFRS 16 had no material effect on the Group's net debt to EBITDA ratio, which remained at 2.7x at both 31 December 2018 and 30 June 2018.

Reconciliations from the segmental and total group results as previously reported, are set out at the end of this announcement.

For further enquiries, please contact:  
Helen Parris                                         Director of Investor Relations            +44 (0) 207 9633189

Media enquiries:
Sophie McMillan                                  Head of Media                                     +44 (0) 759 5523483


                                                                                                               

Notes to Editors:
G4S is the leading global, integrated security company, specialising in the provision of security services and solutions to customers. Our mission is to create material, sustainable value for our customers and shareholders by being the supply partner of choice in all our markets.

G4S is quoted on the London Stock Exchange and has a secondary stock exchange listing in Copenhagen. G4S is active in around 90 countries and has around 546,000 employees. For more information on G4S, visit www.g4s.com.

Statutory accounts:
This Statement is not the Group’s statutory accounts and should be read in conjunction with the Integrated Report and Accounts 2018, which is available at www.g4s.com. The Integrated Report and Accounts 2018 was reported on by the company’s auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not contain a reference to any matters to which the auditor drew attention by emphasis of matter without qualifying their report, and (iii) did not contain any statement under section 498 (2) or (3) of the Companies Act 2006.


Reconciliation from segmental and total group results for the six months ended 30 June 2018 as previously reported

        
 Underlying results at actual exchange rates
 (at H1’18)
Businesses sold or closed since H1’18
(a)
Onerous contracts re-classified since H1’18
(b)
IFRS 16 – Leases
(c)
Underlying results at actual exchange rates
 (at Jun ’19)
Exchange differencesUnderlying results at
Jun ’19
exchange
rates
Revenue - £m       
        
Africa197---197(3)194
Americas1,177---1,177251,202
Asia434---4346440
Europe & Middle East1,231(12)6-1,22521,227
Cash Solutions560(40)  -520(2)518
Total Underlying3,599(52)6-3,553283,581
        
Adjusted PBITA (d) - £m       
        
Africa15--116-16
Americas541-257259
Asia28--129-29
Europe & Middle East83-1387-87
Cash Solutions603-366167
Total before corporate costs24041102553258
Corporate costs(28)---(28)-(28)
Total Underlying21241102273230


 Underlying results at actual exchange rates
 (at H1’18)
Businesses sold or closed since H1’18
 (a)
Onerous contracts re-classified since H1’18
(b)
IFRS 16 – Leases
(c)
Underlying results at actual exchange rates
 (at Jun.’19)
Exchange differences Underlying results at Jun ’19 exchange rates
        
Other financial KPIs - £m       
        
Profit before tax15831(2)1603163
Profit after tax12031(2)1222124
Earnings11511(2)1152117
Earnings per share - p7.40.10.1(0.1)7.40.17.6
Operating cash flow1792267250-250


Reconciliation to statutory results

 
Underlying results at actual exchange rates
 (at H1 ’18)
Add back:
Disposed businesses (a)
RestructuringOnerous contractsAcquisition related amortisation and otherStatutory results at actual exchange rates   Exchange differencesStatutory results at Jun ’19 exchange rates   
         
Other financial KPIs - £m        
         
Profit before tax160(2)(14)(2)(5)1374141
Profit after tax122(2)(11)(2)(1)1063109
Earnings115-(11)(2)(1)1013104
Earnings per share - p7.4-(0.7)(0.1)(0.1)6.50.26.7
Operating cash flow250-(10)14-254-254

Reconciliation from segmental and total group results for the year ended 31 December 2018 as previously reported

        
 Underlying results at actual exchange rates
 (at FY’18)
Businesses sold or closed in H1’19
(a)
Onerous contracts re-classified in H1’19
(b)
IFRS 16 – Leases (c)Underlying results at actual exchange rates
 (at Jun.19)
Exchange differencesUnderlying results at
Jun ’19
exchange
rates
Revenue - £m       
        
Africa405---405(6)399
Americas2,443---2,443332,476
Asia881---8818889
Europe & Middle East2,501(7)--2,494(9)2,485
Cash Solutions1,059--  -1,059(5)1,054
Total Underlying7,289(7)--7,282217,303
        
Adjusted PBITA (d) - £m       
        
Africa32--234(1)33
Americas129--41332135
Asia63--265166
Europe & Middle East179(1)-7185-185
Cash Solutions121--9130-130
Total before corporate costs524(1)-245472549
Corporate costs(50)---(50)-(50)
Total Underlying474(1)-244972499


 Underlying results at actual exchange rates
 (at FY’18)
Businesses sold or closed in H1’19
 (a)
Onerous contracts re-classified in H1’19
(b)
IFRS 16 – Leases (c)Underlying results at actual exchange rates
 (at Jun.19)
Exchange differences Underlying results at Jun ’19
exchange rates
        
Other financial KPIs - £m       
        
Profit before tax365(1)-(2)3622364
Profit after tax272(1)-(2)2691270
Earnings259(1)-(2)2561257
Earnings per share - p16.7(0.1)-(0.1)16.50.116.6
Operating cash flow453(2)-137588-588


Reconciliation to statutory results

 
Underlying results at actual exchange rates
 (at Jun.19)
Add back:
Disposed businesses (a)
RestructuringOnerous contractsAcquisition related amortisation and otherStatutory results at actual exchange rates   Exchange differencesStatutory results at Jun ’19
exchange rates   
         
Other financial KPIs - £m        
         
Profit before tax362(9)(31)(9)(171)142(2)140
Profit after tax269(10)(24)(9)(139)87(1)86
Earnings256(5)(24)(9)(137)81(1)80
Earnings per share - p16.5(0.3)(1.6)(0.6)(8.9)5.2(0.1)5.2
Operating cash flow588-(26)30-592-592

a) To present results on a consistent and comparable basis, the results from any businesses sold in either the current or prior periods are excluded from the underlying results in both the current and prior periods. These include the sales of the Cash Solutions businesses in the United Arab Emirates, Colombia and Saudi Arabia in H2 2018 as previously disclosed and the disposal of a business in Estonia in H1 2019.

b) As disclosed in the FY 2018 results, during H2 2018, the performance of one of the Group’s contracts previously reported within onerous contracts, with revenues of £21m in H1 2018, improved to the extent that it is expected to generate profits over the remainder of its term and was therefore re-classified to underlying results. In addition, two UK Care & Justice contracts with revenues of £15m in H1 2018, that were previously profitable and reported within underlying results, became loss-making and were re-classified to onerous contracts.

c) As explained on page 157 of the 2018 Integrated Report and Accounts, the Group adopted IFRS 16 – Leases with effect from 1 January 2019. The effect of adopting IFRS 16, as presented at 31 December 2018, was rounded to the nearest £5m and was subject to the Group completing its work in respect of onerous leases, foreign exchange rates, and a number of other items. The unaudited impact of the adoption of IFRS16 on the Group’s underlying results is presented above.

d) Adjusted PBITA is an Alternative Performance Measure as defined in page 41 of the 2018 Integrated Report and Accounts.

Quick facts: G4S

Price: 204.7

Market: LSE
Market Cap: £3.18 billion
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