Grays Maiden results top forecast

Dec '99 News

Gray, the top of the market security services group, which listed in March, has declared a maiden dividend and exceeded its earnings forecast for the year to August.

Strong growth has continued in southern Africa and in overseas markets, reports CEO David Plane, resulting in headline earnings rising by 200%, from 5 c to 15 c per share. Turnover has grown by 43%, from R372 million to R532 million. After adjusting for shareholders’ interest paid and converting the average value of shareholders’ loans outstanding into ordinary shares at 200 c each comparable headline earnings per share increased by 36%, from 13 c to 17,7 c per share.

This 17,7 c per share exceeds the prospectus forecast of 16,7 c per share by 6%.

Income before taxation rose from R6,8 million to R28,1 million.

A dividend of 4,5 c per ordinary share has been declared – in line with the group’s stated policy of a dividend cover of approximately two-and-a-half times.

Acquisitions

Two overseas acquisitions were completed during the year. In the UK Gray bought Imperial Security Services and in the US it acquired Crime Prevention Security, based in Miami. It is expected that these two companies will make a satisfactory contribution to profits to August 2000.

The group has written off in the year most of the goodwill and trademarks carried in the balance sheet against share premium.

Acquisition and organic growth forecast

At present Gray operates in 11 countries and is, says Chairman Richard Aubin, “vigorously pursuing other potential acquisitions in overseas markets, particularly in North America, Eastern Europe and Australasia”.

The group is currently in negotiations with a number of potential partners in these areas.

The Africa division operates in eight countries, including Mauritius. Further opportunities, particularly in the mining and petrochemical fields have been identified in Ghana, Nigeria, Botswana, Zambia and Kenya and Gray is talking to a number of enterprises in these countries.

Grey presently employs and manages 16 000 staff worldwide.

Steady growth

In South Africa, says David Plane, demand for premium quality security services continues to show steady growth. As in Africa as a whole, mining and petrochemicals show good potential. New growth areas include the gaming/leisure industry, following the awarding of casino licences and the establishment of casino and entertainment complexes. Another example is revenue protection, a niche market within which Gray assists municipalities and provincial governments in revenue collection and protection.

For further details, contact David Plane, CEO, Gray Security Services, on tel: (021) 419 1119.





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