G4S relies of integrated security solutions to drive revenue

The deployment of integrated security solutions is expected to yield improved margins compared to traditional security offerings and aligns the company to market demands in a post Covid-19 environment.

G4S relies of integrated security solutions to drive revenue

G4S says it continues to focus on growing revenue following increases in revenue quarter on quarter for both Q3 and Q4 2020, indicating that revenue lost during H1 2020 is systematically being recovered. The group says it will continue driving the sale of integrated security solutions to ensure that it remains at the forefront of security capability in Botswana.

The deployment of integrated security solutions is expected to yield improved margins compared to traditional security offerings and aligns the company to market demands in a post Covid-19 environment.

Newly appointed Managing Director Mothusi Molokomme says the continued focus on modernising service offering will be backed by relevant investments in 2021 to ensure that the company remains sustainable over the medium to long term. “Our strong market position, commercial discipline and growing expertise in technology will provide reassurance to the stakeholders off an improved outlook year on year in accordance with our management strategy plan (Revenue growth at 6 percent, recovery to PBITA levels of 18 percent and OCF at 110 percent of PBITA),” he wrote in the company’s results for the year ending 31 December 2020.

COVID-19 has had a measurable impact on the financial performance of the Group for the 2020 financial period. This triggered revenue reductions and have recorded a consolidated revenue reduction of 3.2 percent across all its operating service lines. Molokomme says the reduction in revenue has been most prominent in the Security Systems service line, which has seen a reduction in year on year revenue of 19.6 percent (P12m). “The combination of Covid-19 financial pressures, specifically in the residential sector alarm monitoring and response space coupled with a notable delay in capital expenditure projects in the pure technology corporate environment, has led to a reduction in our alarm monitoring and response customer base and decreased pure technology revenue for the period,” he says. “Our Cash business also saw a decline in revenue driven mainly by the reduced utilisation of cash by the public during extended lockdown periods.” Revenue in the Manned Guarding service line increased by 12 percent year on year.

While all reasonable adjustments to the fixed cost structures of the business were made to mitigate the impact of reduced revenue for the period, Molokomme says they remain a labour intensive business and was therefore impacted by the national state of emergency and the subsequent inability to right size labour force. The additional costs incurred on labour were however offset by the receipt of P9m of Covid-19 aid received from government through the wage subsidy, reported as other income. Gross profit reduced by P7.5m (11.8 percent) year on year. Net Profit for the year reduced by P9.7m and was further impacted by the impairment of goodwill of P8.4m following the reclassification of G4S cleaning and facility management service lines as discontinued operations.