G4S announces revamp, job losses as new CEO starts turnaround
LONDON (Reuters) - G4S (GFS.L) said it would shake up failing parts of its business and lay off up to 400 jobs as the new boss of the world's largest security firm looks to improve its fortunes after a series of high profile blunders.
Chief Executive Ashley Almanza told reporters on Tuesday he would sell, grow or restructure some 35 units within the business in order to "sharpen our strategic focus and strengthen our investment in customer service, organic growth, and technology and innovation."
The revamp comes as G4S battles to repair its relationship with Britain's government. Recent blunders include its failure to properly staff the 2012 London Olympics and a electronic tagging contract now under investigation by the fraud office.
"G4S has strong fundamentals and these will be improved by changes to the way we manage the business," Almanza said.
Shares in G4S, which runs services in some 120 countries from managing prisons to guarding tennis players at Wimbledon, were down 2.7 percent at 247.2 pence by 0825 GMT.
Almanza told reporters that the businesses targeted for an overhaul generated 400 million pounds revenue in total on an average margin of 3 percent. The group posted revenue of 7.3 billion pounds in 2012 and had an operating profit margin of 5.5 percent at the half year.
Almanza said it was too early to say how many businesses would eventually be sold but has said funds will be used to cut debt and fund expansion in more profitable emerging markets, where the group generates more than 40 percent of profit.
The firm also said it intends to invest 15-20 million pounds in 2014 in customer service and business development to support its 5-8 percent annual organic growth target.
For the nine months to September 30 the firm, which issued a profit warning in May, said strong emerging markets trading helped organic revenue rise by 4.8 percent, although margin pressure kept profit before interest, tax and amortization in line with the same period in 2012.
Almanza, a former executive at oil and gas firm BG Group (BG.L), was promoted from finance chief in June.
(Additional reporting by Brenda Goh; editing by Sophie Walker)