Very impressive...

G4S PLC

FORECASTS
2009 2010

Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Panmure Gordon
02-12-09 BUY 380.01 18.72 7.30 421.69 20.91 8.20

Investec Securities
01-12-09 HOLD 394.97 19.34 7.07 413.51 20.06 7.78

Charles Stanley
20-11-09 BUY

Seymour Pierce
20-11-09 BUY 409.70 20.20 7.30 424.70 20.90 8.00

Evolution Securities Ltd
09-11-09 NEUT 400.00 19.80 7.30 422.00 20.90 7.70

Eden Group
03-09-09 BUY

ABN AMRO
27-07-09 BUY 413.95 19.92 7.65 446.51 21.43 8.24

Collins Stewart
04-06-09 BUY

2009 2010
Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Consensus 397.09 19.58 7.24 420.36 20.90 7.89
1 Month Change -2.89 -0.13 -0.08 1.62 -0.08 -0.23
3 Month Change -2.79 -0.17 -0.08 1.87 -0.16 -0.25


GROWTH
2008 (A) 2009 (E) 2010 (E)

Norm. EPS 30.01% 45.53% 6.74%
DPS 21.20% 29.29% 8.98%

INVESTMENT RATIOS
2008 (A) 2009 (E) 2010 (E)

EBITDA 520.90m 630.65m 652.96m

EBIT 337.00m m m

Dividend Yield 2.19% 2.83% 3.08%

Dividend Cover 2.40x 2.70x 2.65x

PER 19.03x 13.08x 12.25x

PEG 0.63f 0.29f 1.82f

Net Asset Value PS -77.16p 112.21p 124.81p

A stingy P/E of Just over 12 going into 2010

Nick Buckles said he was taking “each week at a time” as he battles to save his job and repair the reputation in Britain of the FTSE 100 company after it failed to provide all 10,400 security guards it had agreed to under its contract with the Government.

Commenting as G4S booked a £50m loss against the contract, he admitted the debacle could have a major impact on G4S’s ability to win future contracts from the Government.

But Mr Buckles claimed he could not comment on what happened – despite the end of the Olympics – until PricewaterhouseCoopers (PwC) has completed a review on behalf of the company’s board.

The PwC report is not due to be delivered until the second half of September – after Mr Buckles appears for a second time before the Home Affairs Select Committee over the fiasco. He claimed: “There is pretty clear guidance that if you’ve got a review going on trying to find out what went wrong in a process, the chief executive of the group can’t pre-empt the review.

He added that the final costs incurred by G4S on the contract were uncertain and might not be known until the end of the year. He said the £50m loss was the company’s “best estimate” but it was not “absolutely black and white” what the company would be forced to pay out in terms of penalties for failing to deliver all its contractual obligations.

G4S has not yet received a bill for the additional military and police who were drafted in to meet the company’s security shortfall. The company reported a 5.8pc rise in revenue in the first half of the year to £3.9bn, while the Olympics loss and £24m of restructuring charges drove pre-tax profits down to £61m from £151m. The company said it is cutting 1,100 jobs, mainly outside the UK, and shares fell 2pc to 261p. G4S maintained an interim dividend of 3.42p a share, to be paid on October 19.

Seymour Pierce lifts G4S to buy from hold, target 330p from 255p.