14 Aug 2013

G4S' acquisition of Facilities Management Group (FMG) last year had an impact on the company’s performance.

In its release of the 2012 annual report, FMG stated that acquisition related costs contributed to the reduction of profit before interest, tax and amortisation (PBITA).

Acquisition was effected on June 1 last year and as a result direct as well as overhead costs relating to the facilities management company had contributed to the increase in costs against prior year. G4S acting managing director, Mr Sean Holmes said in the report that the reduced PBITA in 2012 had resulted in a stronger focus on internal operating efficiencies.

Mr Holmes indicated that an asset replacement project commenced this year in order to reduce the cost of asset maintenance as well as improve operational efficiencies within the business. Again, he said a strong debt collection drive had resulted in additional cash balances which would support the project.

In order to drive further growth, the report said the company had strengthened the sales division by appointing a sales director late in 2012. The company also aligned the corporate sales manager’s role to the products and services and also to allow sales and operations to respond more effectively to customers’ needs when a sale is made.

Its profit before tax was P10.1 million, which was P19.1 million behind 2011, due to a 26.9 per cent increase in direct costs as well as a 34.6 per cent increase in overheads.

Going forward, G4S remain confident that 2013 financial objectives will be met as they apply strategies in response to the current demands of the market. G4S acquired FMG Group last year for a tune in the excess of about P11 million to boost its portfolio, which brought along PS Cleaning Services and Facility Management Services.

The intent to lure Shield Security, which was also part of FMG Group, failed after Competition Authority objected to the G4S grant plan. The Competition Authority objected to the move arguing that acquiring Shield Security would give G4S an unfair advantage in the market over others.

Subsequently, Shield Security was acquired by SANCOS-MD, a company directed by Mr Domi Sankie, a former nominal shareholder in Facilities Management Group (FMG). Ends