Covid-19 Update and 2019 Final Dividend

G4S, the leading global security company provides the following update on Covid-19 and 2019 final dividend.
London's Gherkin

As reported on 11 March 2020, when G4S announced its 2019 preliminary full year results, the financial impact of Covid-19 has not been material in the context of the Group’s year-to-date performance. 
 
The Board notes that, in the period since 11 March 2020, the spread of the virus to countries outside Asia has accelerated and the World Health Organisation has declared Covid-19 a global pandemic.  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.
 
G4S is working with employees, customers, suppliers, regulators and governments to strengthen business continuity plans and to protect the company and its key stakeholders.  Across our operations we continue to have mutually supportive relationships with our customers, governments and other key partners who recognise the critical importance of, and ongoing need for, the services G4S provides.
 
As reported in our 2019 annual results, as at 31 December 2019 the Group had substantial liquid resources of £1.3 billion comprising cash, cash equivalents and bank overdrafts of £0.5 billion and committed, unutilised credit facilities of £0.8 billion.  The Group had gross outstanding bank loans and loan notes of £2.3 billion as at 31 December 2019 of which only £56 million is scheduled for repayment in 2020.
 
On 26 February 2020 the Group agreed to sell the majority of its conventional cash businesses to The Brink’s Company for an enterprise value of £727 million.  Under the agreement, completion is phased with expected net cash proceeds of approximately £670 million.  The sale of the first business under this agreement has completed with cash proceeds received of approximately £70 million and further completions are scheduled through 2020.  
 
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.  Accordingly, the Board is not proposing to recommend the payment of a final dividend in respect of the full year 2019 at the forthcoming Annual General Meeting. 
 
In addition, the company is taking steps to reinforce its focus on strong operating cash generation, capital efficiency and other measures to prioritise free cash flow.
 
Once the adverse impact of Covid-19 has abated, it is the Board’s intention to restore the dividend taking into account its stated objective of attaining dividend cover of 2x and thereafter, pursuing a progressive dividend policy. 
 
Notes:
1. G4S had previously stated, in its preliminary full year results announcement on 11 March 2020, that the Board would propose a final dividend of 6.11p per share for the year ended 31 December 2019 at the forthcoming Annual General Meeting.
2. This announcement contains inside information and the person responsible for making this announcement is Celine Barroche, Company Secretary.
For further enquiries, please contact: 
Helen Parris, Director of Investor Relations, +44 (0) 207 9633189

Media enquiries:
Tim Malone, Group Media Manager, +44 (0)7540 970 528
Press office, +44 (0) 207 9633333
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