Reuters/London
G4S, the world’s largest security group, is replacing its chief executive after a series of failures including a staffing fiasco at the 2012 London Olympics culminated in a recent profit warning.
Nick Buckles, 52, who has led the company for eight years, will be succeeded at the end of the month by Chief Financial Officer Ashley Almanza, a former executive of oil and gas firm BG Group who joined in March.
Although G4S shares have outpaced the FTSE 100 index of blue-chip companies during Buckles’ tenure, he will likely be remembered for mistakes over the last 18 months that have rattled investors.
These include a squeeze on margins that led to the profit warning earlier this month and a failed takeover bid for rival Danish cleaning firm ISS, as well as the Olympics contract which Buckles said at the time had left the company’s reputation in tatters.
Shares in G4S have fallen by 12% since Buckles announced the proposed $8bn takeover of ISS in October 2011.
Two of G4S’s biggest shareholders welcomed his departure yesterday.
“We feel that the time is right for Nick (Buckles) to move on,” a leading shareholder who declined to be identified said. “We’ve got a very high regard for Ashley Almanza, we know Ashley well from his time at BG, we think he’s an excellent appointment.”
Chris White, portfolio manager at Premier Fund Managers, the 30th biggest investor in G4S, said the move was positive and should accelerate the company’s restructuring.
G4S, whose rivals include Serco and Swedish security firm Securitas, wants to increase revenue from emerging markets to half the total from a third to soften the pressure on margins from government austerity drives in developed markets. It is looking for acquisitions in the Middle East and India.
The company warned earlier this month that its margins and profits would be lower in 2013, blaming a shake-up of the Dutch prison system, problem clients in Africa and lower volumes in its British cash and justice businesses.
That prompted a 14% fall in the share price, which analysts at Jefferies and Espirito Santo said yesterday may have been the catalyst for Buckles’ departure.
Buckles started at British security firm Securicor in 1985. That company merged with Group 4 Falck in 2004, where Buckles oversaw the transition into the current G4S brand after becoming CEO the following year.
But his decision in late 2011 to launch a surprise takeover of ISS severely hit investor confidence, not least because of the £2bn rights issue required to secure it. The deal collapsed after shareholders opposed it.
The following year, G4S failed to provide a promised 10,400 security guards just weeks before the London Olympics, forcing British army troops to step in and sparking a barrage of public and political criticism.