Growth is good, but not good enough
The "Financial Times" reports that global security firm G4S is divesting from contracts in the West Bank and at IDF checkpoints.
Britain's G4S plc (LSE: GFS; OMX: G4S), the world's largest security services company in terms of revenue, has confirmed it is planning to quit key contracts in Israel amid protests against its involvement in settlements within occupied Palestinian territories," the "Financial Times" reported today.
"Financial Times" adds, "The company employs 6,000 people in Israel, where it provides and maintains screening equipment for several West Bank military checkpoints. It also manages security systems at the controversial Ofer Prison in the Occupied West Bank. But with sporadic international protests continuing both outside the FTSE 100’s headquarters in London and internationally, the company said it would exit the contracts covering Ofer, the checkpoints and the West Bank police headquarters when they terminate in 2015."
"Financial Times" reports, "Last week, 19 non-government organizations from Egypt, Lebanon, Jordan and Palestine called on Arab nations and the European Union to stop dealing with G4S. The Scottish Trades Union Congress also voted on Tuesday to support Palestinian calls for a boycott of the multinational."
“Having conducted a review in 2011, we concluded that, to ensure that G4S Israel business practices remain in line with our own business ethics policy, we would aim to exit the contracts which involve the servicing of security equipment at a small number of barrier checkpoints, a prison and a police station in the West Bank area,” G4S told the "Financial Times".
It adds, "The move will nevertheless disappoint protesters, who have called on G4S to end all dealings with the Israeli prison authorities. The security company will continue to service security systems in commercial and government sites inside Israel, including jails housing Palestinian inmates, after 2015."
G4S operates in Israel through four business divisions for technology security and physical security of sites with guards. "The group earned £100 million in sales at its Israeli operations last year. But the division accounts for just 1% of global revenues, and 1% of profits at the global group, which employs 625,000 people in 125 countries," says the "Financial Times".
"Financial Times" says that G4S has established a risk committee and is conducting more formal reviews of the operational and reputational dangers of contracts worth more than £20 million. It has also stated its ambition to offload underperforming parts of the business.
The newspaper quotes Jeffries analyst Kean Marden as saying, “G4S Israel may be next to be divested? The Israel/Palestine conflict has created reputational issues. In our view the potential disposal of G4S Israel could be announced as soon as the 25 June capital markets day."
G4S said in response, "These are decisions made more than two years ago, and there has been no change in the decision since then.
Published by Globes [online], Israel business news - www.globes-online.com - on April 22, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013
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