G4S sees growth opportunities in Malta

G4S, the international security company, sees an opportunity for it to grow in Malta, according to its group chief executive officer Nick Buckles, who was in Malta last week to participate in the annual European Works Council.

"We follow the same island strategy in Malta that we have in places like Jersey, Guernsey and the Isle of Man, where we get to know the local customers very well," Mr Buckes said. "We have been here for almost 25 years and we provide as many different services as we can for the different customer base."

Malta, which forms part of the southern Europe structure within G4S, has similar market dynamics to Cyprus. Elaborating on G4S's global strategy and how Malta fits in, Mr Buckles said: "There are two geographic fronds to the strategy. In smaller, developing markets outside the big countries in Europe and North America, it's very much about providing multiple services to customers. So it means manned security, electronic cash solutions, sometimes facilities management and really doing as much as we can in terms of outsourcing of services for our customers.

"In the bigger markets, it's much more about long-term contracting and solutions for the government and sectors where safety and security are considered to be high risk areas. But our strategy is quite different from most other security businesses. Firstly, we are in 120 countries, so we have got a great geographic coverage, but secondly we do the multi-service, so we are focused across the whole range of security services."

Despite the global economic recession and the credit crunch, Mr Buckles is quite upbeat about G4S's prospects. "The point I was making to the 40 delegates from 25 countries who attended the Works Council was that our business is pretty robust in a recessionary environment."

Although he conceded that "it has been a very tough 12 months", he is quick to point out "we're still doing better than most. We are hoping that the recession is bottoming out. Certainly the countries we are in, generally, the recession is starting to fade and it's starting to grow. But we tend to be a bit late cyclical so we should start to see some improvement hopefully in the second half of this year."

One area he is optimistic about is the government sector, despite the massive deficits in several countries across the globe. "Government is now about 28 per cent of our group. That's mainly dealing with the UK, the US, South Africa and Australia." He explained that G4S provides long-term outsourcing solutions.

"We run prisons; we escort prisoners around; we run emigration centres. In our view governments with big deficits have got to use the private sector to cut their costs. So, we see a huge opportunity for governments around the world since we can introduce efficiencies into their existing cost base."

Another growth area for the group is the provision of a solutions approach to security. "We are moving from just manpower provision to providing manpower, technology, risk consulting and the whole strategy is around getting much more involved with our board-level customers around designing not only the physical and people infrastructure, but their whole process of managing their senior management overseas," Mr Buckles said.

He pointed out that particularly in a recession, customers were looking at obtaining 20 per cent reductions in their security costs. "We can't do that by reducing wages; we can't do that by reducing margins. So we've got to have fewer people and more technology, and to invest in more cameras, more intrusion detection and more centralised control centres."

Although the systems part of the G4S Group, which accounts for 10 per cent of its business, did not grow last year, Mr Buckles said its competitors who focus solely on systems were typically down between 10 and 15 per cent "because they haven't got the same lead generation from the overall manned security customers. So, they haven't been forced to put solutions into customers because clearly all they do is sell systems."

Only two months ago G4S placed seventh among 56 organisations in Britain's Top Employers 2010 contest, which identifies some of the smartest and most forward-thinking companies in the country. "The reason we won the award is we do look after our people very well," Mr Buckles said. "We spend a lot of money on development.

G4S is the single largest employer listed on the London Stock Exchange, with 606,000 staff (including some 500 in Malta) and the second largest private employer worldwide behind Wal-Mart.