Group 4 Securicor to speed merger savings

This Is Money13 April 2012

SECURITY firm Group 4 Securicor today said its integration was ahead of plan as it delivered its first annual results as a merged company.

The company, formed out of Securicor and Danish rival Group 4 Falck in July, unveiled pre-tax losses of £82.1m against profits of £43.2m last time after it was hit by one-off costs of around £180m.

On an underlying level, earnings from continuing businesses lifted 10% to £216.5m in the year to December 31.

Chief executive Lars Norby Johansen said: 'Integration of the two businesses, with the consequent synergy benefits, is running ahead of plan.'

The group said it was on track to deliver annual savings of £30m by the end of the year, a few months faster than previously expected. As a result, deputy chief executive Nick Buckles will take over from Mr Johansen at the helm this summer as planned.

The combined group operates in more than 100 countries and employs around 340,000 staff. The bulk of its business consists of the provision of security guards and the movement of cash around countries under protection.

Group 4 Securicor said the overall strong performance in 2004 left it with a good base for 2005. Organic turnover increased by 6.2% while margins rose from 5.3% to 5.7%.

Its UK manned guarding operation - the business most affected by the integration - posted organic growth of 3.7% and had good levels of customer retention.

However, an inability to merge the two guarding businesses in the Netherlands due to a European Commission ruling disrupted activity. And the Swedish guarding division was a 'disappointment' due to the loss of a large contract and other operational issues, although a stronger performance was expected in 2005.

Group 4 also provides services to the UK justice system by moving prisoners from jail to court and today reported a large increase in the number of tagged offenders in the UK.

The security services arm performed well with strong growth in the UK, Norway, German and the Netherlands, although Swedish and Danish markets were flat.

Sales from continuing businesses increased by 2% to £3.8bn during the year, although at constant exchange rates this represented an even higher rise of 7%.

The exceptional costs created by the merger include £51.2m in goodwill and £34.5m from the disposal of Falck Netherlands.

Shares fell 0.75p to 141.5p today.

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