Hobson: G4S Shares are Worth a Look

THE WEEK: Morningstar columnist Rodney Hobson looks into G4S's latest results and predicts that Prudential shares will continue to climb

Rodney Hobson 11 August, 2017 | 10:50AM
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A word of praise for the G4S (GFS) board, not for making a profit, but for their sterling effort in disguising the fact that profits were, technically, up 90% in the first half of this year.

I had read the results, which seemed to show profits up about 6%, so I was a bit shocked to read a newswire headline pointing to the much higher figure. What had I missed? It was only on the third reading that I worked out where this grossly inflated figure had come from. To its credit, G4S had buried it as a fiction of accounting rules that are supposed to make accounts more realistic, and instead concentrated on painting an accurate figure.

The market was somewhat less impressed by this honesty than I was, rapidly marking the shares down 7%. However, they are still up 30% since the start of the year.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
DFS Furniture PLC271.00 GBX-0.18
Prudential PLC1,430.96 GBX-1.62Rating

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.