G4S targets cash solutions to boost profits
Keikantse Lesemela | Tuesday August 26, 2014 13:31
Briefing the media on Friday, G4S chief executive Michael Kampani said although the company recorded a 129 percent increase in profits to P13.7 million for the half-year ended June 30, 2014 they still have to look for more opportunities to boost their profits in the end of year results.
“There is still more work we have to do this year. We are just halfway through the year so we need to look for more opportunities for our growth in revenue,” he said.
In the first six months of the year, the company’s profits were driven by systems with a 46 percent contribution, cash management solutions at 38 percent, guarding contributing 10 percent while Facility Management Services added six percent.
Kampani said the introduction of cash deposit machines, which process cash notes in the retail environment, would help boost the cash management contribution to profits. The system registers each cash note deposited and reconciles each deposit transaction to an identifiable source using an automatic banking machine, or ABM.
G4S sales manager, Joseph Lekhori, said the deposit machine solves the problem of counting money manually and it is able to detect counterfeit notes.
“We want to improve our business by employing this technology. The deposit machine is able to manage the complete cash management process and provide our clients with peace of mind regarding the safety of their staff and the effective management of their cash assets. We are still talking with the potential customers, especially the retail,” Lekhori said.
Kampani said although profits increased in the first six months of the year, they have not yet reached the level they were prior to the acquisition of FMS.
The company’s profits declined in the past two years after the acquisition of FMS in 2011. Last year it recorded a 37, 8 percent decline in profits to P4.82 million and a marginal revenue growth of 0.7 percent for the year ended December 31, 2013.
This came after the company recorded a 45.7 percent drop in profits to P7.18 million in the first half of 2012 due to high costs in the acquisition of FMG. G4S Botswana acquired 100 percent shares in FMG for a purchase consideration of nearly P12.2 million in June 2012. The acquisition resulted in G4S getting a 70 percent stake in PS Cleaning Services.
The growth in earnings in the first six months of 2014 was driven by the success of turnaround drive in achieving improved revenue growth and significant cost efficiencies.
“Cost efficiencies resulting from a restructuring of the business in the last quarter of 2013 and various other cost containment initiatives including bad debts and recovery of facilities management business contributed to the significant growth in profitability,” said Kampani.
He said the restructuring exercise has resulted in 33 people leaving from a total staff complement of about 3000 employees in Botswana.