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G4S pulls divided as coronavirus outbreak spreads

By Abigail Townsend

Date: Monday 23 Mar 2020

G4S pulls divided as coronavirus outbreak spreads

(Sharecast News) - G4S has joined a raft of companies pulling dividend payments because of the coronavirus outbreak, the security services specialist confirmed on Monday.
G4S said the impact of Covid-19 had not been material in the year-to-date performance and that it had "substantial" liquid resources.

As at the 31 December year end, liquid resources were ?1.3bn, comprising cash, cash equivalents and bank overdrafts of ?500m, and committed unused credit facilities of ?800m. Of its ?2.3bn in outstanding loans, only ?56m is repayable in 2020

But the company conceded: "In the period since 11 March, the spread of the virus to countries outside of Asia has accelerated.

"Countermeasures that are being introduced by national governments have escalated rapidly, with potentially significant implications for the level of economic activity across a wide range of business sectors and geographic markets."

It continued: "Notwithstanding the company's strong liquidity, robust business continuity plans and the immaterial financial impact to date, the board considers that the uncertainty relating to Covid-19 and its impact on economic activity in our key markets has increased substantially since 11 March.

"In these circumstances, the board has concluded that it is prudent and therefore in the best interest of the company that G4S does not pay a 2019 final dividend.

"In additional, the company is taking steps to reinforce its focus on strong operating cash generation, capital efficiency and other measures to prioritise free cash flow."

In February, G4S announced it was selling the majority of cash handling businesses to US rival The Brink's Company for ?727m, including debt. G4S said on Monday that the sale of the first business under that deal had completed, with cash proceeds received of around ?70m. Further completions are scheduled for throughout the year.

Shares in G4S were down 10% at 82.42p by 1415 GMT.


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