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FM with a secure approach

07 January 2010

Speaking to PFM editor, Jane Fenwick recently, Chris Elliott, Group MD of G4S Integrated Services explains that in the next four years, he plans to win more than £60m in new revenue from private sector business to add to the almost £70m already won within the G4S Group.

News earlier this month that Beaumont Leys School was not only awarded Best School in the Excellence in Building Schools for the Future (BSF) Awards but also won the Grand Prix Award for Best Overall BSF project, is recognition that its FM services provider, G4S has emerged into the limelight as a force to be reckoned with in the FM sector.
As part of the Leicester Miller Education Company for the Leicester BSF contract, G4S Integrated Services provides a wide range of FM services to Beaumont Leys School and the other three schools in Leicester’s £235m BSF programme. In total G4S already provides FM and lifecycle services to 29 schools across the UK.
It might come as a surprise to those who more frequently see the G4S brand on prisoner transport vans or on the shirts of burly security guards, that the G4S Integrated Services business is a significant force in FM both in the public sector – its more traditional space – and increasingly the private sector.
Speaking to PFM editor, Jane Fenwick recently, Chris Elliott, Group Managing Director of G4S Integrated Services  explained that in the next four years, he plans to win more than £60m in new revenue from private sector business to add to the almost £70m already won within the G4S Group. His plans for growth in the public sector are in line with the 17 percent annual growth achieved in the last four years, taking the Integrated Services business as a whole from £130m in 2008 to about £200m in 2011.
G4S was formed in 2004 from the merger of Securicor plc and Group 4 Falck A/S’s security business. Previously, when Group 4 merged with the Danish company Falck, it created an FM capability to operate all its growing PFI interests which included prisons, schools and GCHQ in a 30 year contract.
This FM capability was expanded by adding the Met Office FM contract, and its first FM contract in healthcare sector for the Nuffield Orthopedic Hospital in Oxford.  It also diversified into non-emergency patient transport.  It won the first NHS Local Improvement Finance Trust (LIFT) programme concession in 2004 for East London.
When Group 4 Falck merged with Securicor, this operation was sold to private investors as part of a new company called GSL, which was organised into three autonomous divisions to reflect its key activities - Care and Justice, Data and Managed Services and Integrated Services.  Elliott was finance director in this period during which GSL continued to grow in depth and breadth from a £280m to a £450m  business. “Public sector business tends to be unpredictable,” explained Elliott, “with large projects that come infrequently.  Therefore we developed an FM package for the private sector using the skillsets we had. We won and still have business with Downing Property Management with a property portfolio in Liverpool.”
Just four years later in May 2008, G4S bought GSL back as part of its strategy to develop its Secure Facilities business.  Announcing the strategic change Nick Buckles, G4S plc chief executive, said “We will be looking to enter into long-term facility management contracts, based on a partnership approach, where security is a major underlying requirement from the customer and is therefore key to determining who they get to run their buildings from an end-to-end perspective. We already have a proven track record through our running of prisons and youth custody establishments where we are providing, under long-term contracts with security at their core, everything from education to healthcare. “

GSL's three service areas migrated to the G4S brand as part of a longer-term integration process.  Having developed a client base largely to support the delivery of FM  services in critical environments for national and local government agencies and the private sector, it slotted back into the new aspirations for its security giant parent which was seeking to broaden its scope. 
This focus on secure facilities remains but Elliott plans to build up the range of services offered. Typical are niche services offered by Information Security and Assurance for the disposal of sensitive data and information generated by its police, banking and finance customers.  “We are leveraging off the wider G4S customer base which includes 60 of the top 100 FTSE companies. We are also working closely with the G4S Secure Solutions business which provides specialist security solutions and bundled soft services within secure environments, including Lloyds TSB where it delivers portering, mailroom and reception services.
He continued, “The secure and critical market is worth about £10bn.  That’s about 60 percent soft services and 40 percent hard services, but security accounts for just 10-12% of that.  Our view is that the G4S Integrated Services and Secure Solutions businesses have the opportunity to pool their strengths. The security services are  reacting to the competition from other FM companies offering security as a service but from a different heritage.  Customers want either a bundled or an integrated package and G4S has responded  to that demand by acquiring GSL: so we now have a business with experience in that sector which is allied to a secure solutions business with £350m turnover from private sector clients alone.
Elliott recognises that more acquisitions will be needed for total FM delivery.  “We are principally focused on large self-managed sites but we don’t currently service lots of small sites across the country. We don’t have a mobile engineering workforce and we could be looking for an acquisition to provide a more geographically spread service. In the meantime we will work with a partner which has that capability if a business opportunity comes along.”
G4S is the largest employer quoted on the London Stock Exchange, with a global workforce of over 585,000 employees. G4S Integrated Services has 3,077 employees, of which only 156 are listed as security staff, while over 1,460 deliver cleaning and catering services, nearly 200 are delivering hard FM services and the remainder are involved in logistics, management and support, and transport and healthcare support activities.
As the PFI/PPP falters in the UK, Elliott sees opportunities in shorter term contracts in the healthcare sector. G4S recently won a £14m contract for North West London Hospitals NHS Trust including Northwick Park and Central Middlesex Hospitals. In the education sector, Elliott can build on a good track record achieved in the Leicester and Greenwich  BSFs and schools elsewhere in the UK. In the private sector Elliott will be looking for contract opportunities in a mix of sizes but ideally around £5m a year.
G4S operates in 115 countries but Elliott does not currently envisage extending his operations beyond the UK and Ireland where he says there is plenty of business to be won. However, the spread of the wider group could prove to be a useful platform for cross border operations for those customers who might need this and Elliott’s business is already supporting the wider G4S business in the bidding for PPP contracts internationally.


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