Security and outsourcing company G4S is planning to spend 200 million pounds ($330 million) per year on acquisitions, the company's CEO told CNBC Tuesday, after the company beat analyst expectations to post first-half earnings growth of 8 percent.
Organic growth of 5 percent across developing and developed markets drove revenues, according to CEO Nick Buckles. In total, emerging markets delivered 9 percent organic growth. G4S shares rose more than 15.5 percent in early trade on Tuesday morning.
"In terms of developing markets, the Middle East is very strong, Asia is very strong, and Latin America - about 15 percent plus organic growth there," Buckles said. "In developed markets, UK and US are very strong. We've still got problems in places like Greece, clearly, Ireland and some of the Eastern European countries, but developed markets in Europe we saw organic growth around 3 percent, which is stronger than this time last year."
To reflect this, Buckles said, the company would invest 200 million pounds per year to expand through acquisition, with around half of that earmarked for developing markets.
"Brazil is still a key market for us to invest in, (as are) areas like Korea, Ecuador, Malaysia, Thailand," he said. "Those developing markets are good. India, we've had an organic growth story developing for 20 years now, we've got about 180,000 employees there, but acquisitions are on the cards too."
In the US and UK, the company would invest in building capacity in technology and consultancy services, Buckles added.
Broker Panmure Gordon reiterated a 'buy' rating on G4S, with a target price of 315p ($5.20) per share, above Monday's closing price of 244p ($4.03).