G4S cheered by emerging market growth
Facing increased scrutiny and controversy over its criminal tagging business in the U.K., security company G4S reported growth in its interim management statement published on Tuesday.
On Monday, The Serious Fraud Office (SFO) in the U.K. opened an investigation into whether the company had illegally charged for tagging criminals that were either dead, in prison or were never tagged in the first place. Shares took a hit on the day, falling by 2 percent before paring losses.
Nonetheless, the company posted overall organic growth in revenue of 4.8 percent for the first nine months of the year the following day. Emerging markets was behind the move upwards with a rise in revenue of 14 percent, whilst it reported that developed market growth was broadly flat. Adjusted profit was in line with same period last year and adjusted revenue rose by 6.4 percent (year-on-year), it said.
G4S said that it has identified 35 of its businesses that are underperforming that it will either look to grow, restructure or exit. 250 to 400 job posts will be cut in its U.K. business, it also announced on Tuesday, with hopes that workers will be switched to alternative roles. The firm currently employs 45,000 people in its U.K. unit.
Regarding the SFO investigation the firm stated it will "fully co-operate" as well as continuing to comply with various audits and reviews from U.K. government departments.
This latest investigation followed moves by the U.K. government, which placed all contracts from G4S under review in July after an audit first revealed the claims.
(Read More: G4S, Serco in electronic criminal tagging probe)
The world's largest security firm by revenues was also the focus of intense criticism last year for its management of the London Olympic Games where it was unable to recruit and train enough staff in time for the games' start in July.
Both U.K. CEO Nick Buckles and Richard Morris, head of U.K. operations, have quit since the scandal.
Simon Maughan, head of research at Olive Tree Financial Group said that the reason behind the company's poor performance in the U.K market is, like may other companies, is its desire to employ people that don't speak English leading to a deterioration of the quality of its work.
"I have no concern about where people are employed from. It's a structural things that's happening in the U.K. economy," he said. "We are subsidizing people that are coming to the work in this economy...G4S is a play on that, a lot of other companies are a play on that."
G4S said that it now expects trading conditions to remain challenging in both the U.S. and Europe during the fourth quarter. It added that the restructuring of its U.K. and Ireland cash solutions business was underway is underway with "tangible benefits" in 2014.
(Read More: G4S rejects offer for cash solutions business)
This unit was the subject of rejected bid last week from private equity group Charterhouse Capital Partners. The £1.55 billion ($2.47 billion) approach was described as "highly opportunistic" by the firm.
Despite shareholders backing the rejection of the offer, there have been calls that the company should step up it's divestment plan, according to the Financial Times, with some believing the firm is too big.
In it's Tuesday statement, G4S iterated that it's Norwegian unit had now been sold to Nokas for £30.5 million. It added that it was in a better financial position after selling its data storage business in Colombia in the summer, as well as its Canadian cash business which is expected to be finalized in the fourth quarter.
By CNBC.com's Matt Clinch. Follow him on Twitter @mattclinch81