Capitalcube gives G4S Plc a score of 34.
Our analysis is based on comparing G4S Plc with the following peers – Prosegur Compania de Seguridad SA, Westminster Group plc, Croma Security Solutions Group PLC, Thruvision Group PLC, Secom Co., Ltd., Loomis AB Class B, Securitas AB Class B and Gwarant Agencja Ochrony S.A. (PSG-ES, WSG-GB, CSSG-GB, THRU-GB, XSC-DE, LOOM.B-SE, SECU.B-SE and GWR-PL).
G4S Plc has a fundamental score of 34 and has a relative valuation of NEUTRAL.
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- With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.
- It currently trades at a Price/Book ratio of (5.13).
- We classify GFS-GB as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
- GFS-GB‘s median net profit margins and relatively high asset efficiency give it some operating leverage.
- Compared with its chosen peers, changes in the company’s annual earnings are better than the changes in its revenue, implying better than median cost control and/or some economies of scale.
- GFS-GB‘s return on assets has improved from below median to about median among its peers over the last five years.
- The company’s relatively low gross margin and median pre-tax margin suggest operations may be constrained on pricing versus peers.
- GFS-GB‘s revenues have grown more slowly than the peer median over the last few years, which combined with the stock price’s relatively low P/E ratio suggests substandard growth expectations relative to peers.
- The company’s relatively low level of capital investment and below peer median returns on capital suggest that the company is in maintenance mode.
- GFS-GB seems to be constrained by the current level of debt.
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Leverage & Liquidity
GFS-GB is debt-constrained.
- With debt at a relatively high 37.40% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 13.91%), and interest coverage level of 3.86x, GFS-GB seems debt-constrained.
- Of the 8 chosen peers for the company, only 7 of the stocks have an outstanding debt balance. Companies with no debt include THRU-GB.
GFS-GB has moved to a Some Capacity from a relatively high leverage profile at the prior year-end.
- GFS-GB‘s interest coverage is its highest over the last four years and compares to a low of 2.42x in 2015.
- The increase in its interest coverage to 3.86x from 2.42x (in 2015) was also accompanied by an increase in its peer median during this period to 5.94x from 3.69x.
- Interest coverage fell 0.82 points relative to peers.
- GFS-GB‘s debt-EV is less than (but within one standard deviation of) its four-year average debt-EV of 40.46%.
- The decrease in its debt-EV to 37.40% from 43.07% (in 2015) was also accompanied by a decrease in its peer median during this period to 13.91% from 19.23%.
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Key Liquidity Items
|Company||Debt/Enterprise Value (%)||Current Ratio||Interest Coverage (x)||Cash Flow To Total Debt (%)|
|Prosegur Compania de Seguridad SA||36.78||1.69||5.94||26.07|
|Westminster Group plc||11.19||0.51||-10.18||-79.94|
|Croma Security Solutions Group PLC||N/A||1.53||3.05||153.98|
|Thruvision Group PLC||0||1.84||-5.44||999|
|Secom Co., Ltd.||5.7||2.35||146.83||169.2|
|Loomis AB Class B||16.64||1.2||17.25||53.97|
|Securitas AB Class B||26.18||1.25||12.02||30.18|
|Gwarant Agencja Ochrony S.A.||8.73||1.9||47||233.79|
|Best In Class||5.7||2.35||146.83||999|
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G4S Plc engages in the provision of integrated security and related services. It operates through the following geographical segments: Africa, Asia Pacific, Latin America, Middle East and India, Europe, North America, and United Kingdom and Ireland. The company was founded in 2004 and is headquartered in London, the United Kingdom.
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