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Improving financial performance recorded for FM businesses

11 August 2017

Better financial returns have been reported by both G4S and Interserve, although the latter continues to lost money for its construction activities.

Following its determined push to sell off under-performing divisions, G4s reported a 16.7% rise in pre-tax profits for its half year results.

It recorded a figure of £237m up to the end of June and revenues also increased to £3.97bn, a rise of 12.5%.

However, after it reported a slowing growth rate for Q2 of this year, its share prices fell by just under 6% to 312p.

The company was adversely affected by issues on the global market, including lower oil prices impacting its Middle East returns and the Indian demonetisation programme resulting in knock-on effects in that sector.

G4S grew by 1.9% in the UK and Ireland, attributed to new electronic monitoring FM and integrated security contracts.

It also plans to save between £90m and £100m by 2020 by introducing further efficiencies.

The company has sold or closed more than 20 business since 2013 and will continue with this programme by selling or closing others in the future.

Interserve also reported it had returned a profit in the first half of 2017, after it recorded a loss of £33.8m for the same period last year.

However, its pre-tax profit of £24.9m from revenues of £1.65bn included a £2m loss for its construction business over the first six months of 2017.

Its construction woes were attributed to challenging market conditions, areas of underperformance on "a small number of contracts".

Its strategy for the future includes increasing its FM and support services activities, while reducing its construction workload.

The company's return to profit was assisted by its exit from the energy from waste market, which saw substantial losses in 2016.

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