UK business boosts G4S

Security firm G4S (GFS) announced an 8% rise to its interim dividend today, as it notched up 5% growth in group turnover for the six months to end-June.

At constant currencies, group turnover rose to £3,761 million, helping to lift profit before interest, tax and amortisation 3% to £239 million.

The FTSE 100-listed firm's UK and Irish business was its stand-out performer, achieving organic growth of 6% in the first half, with margins in Europe as a whole up 6.3% "mainly as a result of the UK margin improvements".

However, the balance between the UK and Ireland is heavily weighted in favour of the former, with "difficult market conditions" contributing to a 3% dip in Irish turnover.

Chief executive officer Nick Buckles said the firm was "accelerating in most regions and business sectors", with its new markets business - now 29% of group revenue - showing "excellent growth".

Looking ahead, he added: "We have a strong pipeline of M&A opportunities which should come to fruition within the next six to 12 months.

"This pipeline, together with the recovery in growth in our existing business, gives us confidence in the outlook for the full year and into 2012."

Analyst view...

Analysts at Seymour Pierce tagged the firm a 'buy', targetting a price of 350p.

It did issue one note of caution, though: "Whilst Secure Solutions margins improved in the period (6.6% vs 6.5% first half 2010), Cash Solutions margins were lower (8.9% vs 9.9%) reflecting volume reductions in developed markets."

Mike Allen, analyst at Panmure Gordon, also maintained its 'buy' rating on G4S following its "solid set of first-half results".

"We are maintaining our full-year forecast expectations post these results and with 25% upside to our target price backed with a 4% dividend yield," he added.