G4S warns of 2013 margin pressure

The firm, which provides services ranging from manned security guards, to cash transportation and running prisons, said that group margin was down 0.6 per cent in the three months to end-March.

“The first quarter margin trends are expected to continue for the full year,” the firm said in a trading update.

G4S said in March that it planned to drive growth in 2013 by increasing its presence in emerging markets, as it looked to recover from a year that was hit by a London Olympic staffing fiasco and tough European markets.

G4S said on that challenging conditions in continental Europe and pricing pressure in its cash solutions arm, which transports and stores money for businesses, in the UK and Ireland were behind the increasing margin pressure.

The group also cited a £6m charge in Africa after some clients did not pay their bills and the proposed closure of 30 prisons in the Netherlands as factors that would have an impact on the business.

Overall, revenue grew by 7.5 per cent at constant exchange rates in the first quarter, the firm said, while organic growth was up six per cent at group level, but up 12 per cent in developing markets.

The firm said it now intends to include its US regulated secure solutions business, which provides services to markets like nuclear power, in the sale of its high level US government business.