July 23, 2020 / 6:51 AM / 17 days ago

G4S profits beat, lockdown easing boosts security demand

(Reuters) - Security contractor G4S Plc (GFS.L) beat first-half profit expectations on Thursday and said it expects increased demand for thermal cameras and screening personnel as companies reopen after lockdowns, sending its shares 6% higher.

FILE PHOTO: A G4S security van parked outside a bank in Loughborough, central England, August 28, 2013. REUTERS/Darren Staples/File Photo

The company, which employs security guards and provides security camera installations and scanners in airports, reported an adjusted operating profit of 187 million pounds ($238.35 million), topping the 159 million expected by analysts.

It said, however, it was not ready to resume dividends.

“We are assisting customers around the world with their COVID-19 return to work assurance programmes,” it said, citing increased demand for thermal cameras, access control and screening personnel.

G4S, one of the world’s largest private security firms employing more than half a million people in 90 countries, sold most of its cash-handling operations in February to U.S. peer Brinks Co (BCO.N) to focus on its security business.

Earlier this month, the company said it planned to lay off some employees at its retained British cash operations to cope with sliding cash volumes during the COVID-19 pandemic.

Adjusted operating profit at its cash business fell by a third.

On Thursday, the firm said it expected to save 100 million pounds in 2020 from productivity gains and restructuring.

Profit at its secure solutions rose 1.5% in the six months to June, as growth in the Americas and Asia countered weakness in Europe and the Middle East, where the novel coronavirus had the most impact on the group’s business.

“Overall, we see these results as strong in the context of the COVID-19 crisis,” analysts at JPMorgan said.

G4S said the net financial costs of the pandemic for parts of the business where it received government employment support was estimated at 20 million pounds to 25 million pounds, largely because of lost revenues and cost increases.

Reporting by Yadarisa Shabong in Bengaluru; Editing by Bernard Orr and Barbara Lewis

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