G4S' 'BBB-' rating affirmed by S&P, outlook stable
UK based global security provider G4S had its 'BBB-' rating reiterated on Wednesday, as analysts at Standard & Poor's (S&P) ratings agency deemed the company's outlook stable and in line with forecasts.
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"We expect G4S will continue to improve its operating performance backed by strong performance in emerging markets and continued strong growth in North America, slightly offset by continued below-average growth in Europe and the impact of electronic monitoring contract termination in the UK," S&P said.
G4S performed mostly in-line with expectations in 2014, with revenue growth of 3.9%, customer retention of 90-95% and a flexible cost base that facilitates stable operating margins and cash-flows.
The company also launched a new productivity plan, including improved labour efficiency and route planning, as well as a bolstered IT department.
S&P predicted dividends of about £160m in 2015, and £180m in 2016. It also estimated capital expenditure of about £170m in 2015, and £190m in 2016.
"While the prospects of an upgrade are remote at present, we could raise the ratings if G4S established a track record in its enhanced risk review process," S&P concluded by saying.