G4S plc UK DK : G4S plc UK DK : Annual Financial Report

           G4S plc UK DK : G4S plc UK DK : Annual Financial Report

13 March 2013

G4S plc
Preliminary results announcement for the year ended 31 December 2012

Developing markets, outsourcing trends and an on-going focus on business
improvement has continued to drive underlying growth despite challenging
economic environment

                                                           2012 Change  2011**
Turnover - total                                        £7,501m +10.4% £6,797m
Turnover - excluding Olympics*                          £7,297m  +8.1% £6,750m
Organic growth*                                           +6.9%
PBITA***- excluding Olympics*                             £516m  +6.0%   £487m
Operating margin*                                          7.1%           7.2%
Adjusted EPS                                              21.2p  +3.4%   20.5p
EPS attributable to equity shareholders of G4S             3.4p          12.9p
plc ****
Recommended total dividend per share                      8.96p     5%   8.53p
Cash conversion*                                            95%            84%

* excluding Olympic and Paralympic Games contract revenue of £204m (2011:£47m)
and PBITA of £nil (2011:£3m)
**at constant exchange rates and adjusted for discontinued businesses
*** PBITA is defined as profit before interest, taxation, amortisation of
acquisition-related intangible assets, acquisition-related costs and
exceptional items
**** this includes exceptional items of £88m related to the Olympic Games
contract, £45m of restructuring costs and a £63m loss related to discontinued
operations. For a full reconciliation please see p.23

Underlying sales up  8.1% and improved  organic growth of  c.7%. Adjusted  EPS 
21.2p (excluding the Olympic Games contract)

  *Organic growth of 10% in developing  markets with revenue of £2,387m  (33% 
    of group total and targeting 50% by 2019)

  *Group PBITA margin of 7.1% 

  *Commenced new contracts of c.£200m annual value with the UK government  in 
    2012

  *Vanguarda, Brazil acquisition  announced in September  performing in  line 
    with expectations

  *Olympic Games contract loss  of £70m and related  costs of £18m result  in 
    exceptional loss of £88m 

  *Following a  strategic  review,  G4S'  US  Government  Solutions  business 
    classified as held for sale 

  *Achieved annual cash conversion of 95%, exceeding target of 85% 

  *Based on the positive  organic growth outlook,  the recommended full  year 
    dividend has been increased by 5% to 8.96p 

Continued focus on business improvement

  *Service excellence centres have been established for core services: manned
    security and cash solutions - part of a programme to support gross margins
    and profit improvement initiatives

  *Restructuring led to £35m annualised  savings, with related costs of  £45m 
    which have been taken as an exceptional item, a large proportion of  which 
    relates  to  Continental  Europe  and  restructuring  of  the  technology 
    businesses in the Americas region

Security remains  core to  global  strategy and  continues to  provide  growth 
opportunities

  *Strong global contract pipeline of £3.5bn per annum across a diverse range
    of sectors 

Nick Buckles, Chief Executive Officer, commented:

Our 2012 financial results reflect the significant exceptional costs
associated with the Olympic contract and our overhead reduction programme
together with the large impairment charge related to the discontinued US
Government Solutions business.

Despite these issues, the underlying business has performed well in 2012 with
an acceleration in organic turnover growth to 7% and with margins holding at
over 7%. The acceleration in organic growth was due largely to a number of new
North American commercial and UK government contracts and continued strong
growth in developing markets and was achieved despite continued economic
challenges in Europe.

Our developing markets business now accounts for a third of group revenues and
continues to grow strongly  and our recent  acquisitions in Brazil,  Vanguarda 
and Interativa, are performing well.

The breadth of our portfolio in  over 125 countries continues to present  many 
new growth  opportunities  and  we  continue to  see  good  opportunities  for 
outsourcing  in  key  sectors  such  as  government,  financial  institutions, 
aviation, oil and gas, mining and ports. Our market leading businesses,  broad 
customer base and £3.5bn per annum contract pipeline give us confidence in the
outlook for the group.

For further enquiries, please contact: +44 (0) 1293 554400

Nick Buckles     Chief Executive Officer
Trevor Dighton      Chief Financial Officer
Helen Parris     Director of Investor Relations

Media enquiries:

Adam Mynott     Director of Media Relations   +44 (0) 1293 554400
David Allchurch/Ed Orlebar   Tulchan Group    +44 (0) 20 7353 4200

High resolution images are available for the media to view and download free
of charge from www.vismedia.co.uk.

Notes to Editors:

G4S is the world's leading  international secure outsourcing solutions  group, 
which specialises in outsourced business  processes and facilities in  sectors 
where security and safety risks are considered a strategic threat.

G4S is the  largest employer quoted  on the  London Stock Exchange  and has  a 
secondary stock exchange listing  in Copenhagen. G4S  has operations in  more 
than 125 countries and 620,000 employees. For more information on G4S,  visit 
www.g4s.com.

Presentation of Results:

A presentation to investors and analysts is taking place today at 0900hrs at
the London Stock Exchange. 

Webcast

http://view-w.tv/p/707-803-12486/en

Telephone Dial-in Facility
The details for the telephone dial-in facility are as follows:-

Dial In Numbers
Standard International Access +44 (0) 20 3003 2666- 
UK Toll Free 0808 109 0700
USA Toll Free 1 866 966 5335
Denmark Toll Free 8088 8649 
Password: G4S

Replay Details
To listen to a replay of the presentation which will be available for 7 days
after the event, here are the details:
Standard International Access +44 (0) 20 8196 1998
UK Toll Free 0800 633 8453
USA Toll Free 1 866 583 1035
Denmark Toll Free 8088 7109
Access PIN: 8952850

Annual Report & Accounts
The company's annual report and accounts is due to be published week
commencing 15 April 2013

Capital Markets Day
G4S will hold a Capital Markets Day in London on 21 May 2013

Annual General Meeting
The company's annual general meeting will be held in London on 6 June 2013

FINANCIAL SUMMARY

Results

The results  which follow  have been  prepared under  International  Financial 
Reporting Standards, as adopted  by the European  Union (adopted IFRSs).  The 
revenue from the Olympic Games contract  has been excluded from the tables  on 
pages 4 to  14 unless  otherwise stated.   The contract  loss and  additional 
costs resulted in  a total loss  of £88m  which was booked  as an  exceptional 
item.

Group Turnover

Turnover of Continuing Businesses                                  2012 2011
                                                                      £m    £m
Turnover  at  constant  exchange  rates  excluding  Olympic  Games 7,297 6,750
contract
Exchange difference                                                    -   169
Olympic Games contract                                               204    47
Total continuing business turnover                                 7,501 6,966

Turnover increased by 5.5% to £7,297  million or by 8.1% at constant  exchange 
rates. Organic turnover growth was 6.9%.              
     

            

Organic Turnover Growth incl Olympic Europe   North Developed Developing Total
Games contract *                            America   Markets    Markets
Secure solutions                        11%     11%       11%        10%   10%
Cash solutions                          -1%      8%        0%        10%    3%
Total                                    8%     11%        9%        10%    9%

* Calculated to exclude acquisitions  and disposals, and at constant  exchange 
rates

Organic Turnover Growth excl Olympic Europe   North Developed Developing Total
Games contract *                            America   Markets    Markets
Secure solutions                         5%     11%        7%        10%    8%
Cash solutions                          -1%      8%        0%        10%    3%
Total                                    4%     11%        6%        10%    7%

* Calculated to exclude acquisitions  and disposals, and at constant  exchange 
rates

Group Profit

PBITA * of Continuing Businesses                                    2012 2011
                                                                       £m   £m
PBITA at constant exchange rates excluding Olympic Games contract     516  487
Exchange difference                                                     -   12
Olympic Games contract                                                  -    3
Total continuing business PBITA                                       516  502
PBITA margin  at constant  exchange rates  excluding Olympic  Games  7.1% 7.2%
contract

* PBITA  is  defined as  profit  before interest,  taxation,  amortisation  of 
acquisition-related   intangible   assets,   acquisition-related   costs   and 
exceptional items

PBITA was  £516 million  up  6.0% at  constant  exchange rates  excluding  the 
Olympic Games contract and up 2.8% in total at actual rates. The PBITA margin
was 7.1%.

         

Cash Flow and Financing

Cash Flow                                          2012 2011
                                                      £m    £m
Operating cash flow                                  492   421
Operating cash flow / PBITA (excluding associates)   95%   84%

Operating cash flow, excluding the Olympics contract, as analysed on page  25, 
was £492 million in the period, representing 95% of PBITA. This exceeded  our 
target of 85% through continual analysis of all aspects of the operating  cash 
cycle  to  improve  cash  collections.  Net  cash  invested  in  current  year 
acquistions was £93 million. Net debt at  the end of the period, as  analysed 
on page  24, was  £1,802 million  (December 2012:  £1,616 million)  which  was 
impacted by  an Olympic  Games related  receivable of  £75 million  which  was 
received in February 2013.

Adjusted earnings per share

Adjusted earnings per share 2012 excluding    2011 excluding Olympics at  2011
                                  Olympics       constant exchange rates
                                        £m                            £m    £m
PBITA from continuing                  516                           487   502
operations
Interest (before pensions)           (104)                          (94)  (95)
Tax (before pensions                  (92)                          (88)  (91)
interest)
Minorities                            (22)                          (17)  (17)
Adjusted profit
attributable to                        298                           288   299
shareholders
Average number of shares             1,403                         1,405 1,405
(m)
Adjusted EPS (p)                      21.2                          20.5  21.3

Adjusted earnings per share,  reconciled to basic earnings  per share on  page 
23, increased  by  3.4%  at  constant  exchange  rates  and  remained  broadly 
unchanged at actual exchange rates.

EXCEPTIONAL ITEMS

London 2012 Games Security Contract
In February  2013,  the  group  announced  that  it  had  agreed  a  financial 
settlement with the London Organising Committee of the Olympic and  Paralympic 
Games in respect  of the provision  of the security  workforce for the  London 
2012 Olympic and Paralympic Games. The terms of the settlement meant that  the 
group incurred an overall loss on  the contract of approximately £70  million, 
additional costs mainly relating to charitable donations and external fees  of 
£11 million, and further sponsorship and marketing costs of £7 million, all of
which were taken as an exceptional charge in 2012.

Restructuring Costs
During 2012 the group  undertook a detailed review  of the overhead  structure 
across all reporting levels  and geographies in  order to maximise  efficiency 
and eliminate duplication.  Restructuring generated a  headcount reduction  of 
over 1,500 positions. This resulted in  an exceptional cost of £45 million  in 
the year as follows:

                   Headcount reduction People costs Other Costs Total Costs
                                                 £m          £m          £m
UK                                  58            3           0           3
Continental Europe                 257           12           8          20
North America                      132            4           0           4
Developing Markets               1,019           10           3          13
Head Office                         48            2           3           5
Total                            1,514           31          14          45

This restructuring  will  result in  annualised  cost savings  of  around  £35 
million, whilst an  additional £10 million  has been invested  in the  Service 
Excellence Centres and  in sales  and marketing.  The group  plans to  achieve 
further cost savings in the  medium-term through procurement efficiencies  and 
business process redesign.

Discontinued businesses 
Following a  strategic  review,  the  group  has  decided  to  divest  its  US 
Government Solutions business  to a parent  able to add  or create more  value 
than we are able to, being a non-US parent with restricted access to important
commercial data and  limited ability  to manage  the business  and share  best 
practice. Related turnover of
£468 million (2011: £542 million) and PBITA of £9 million (2011: £20  million) 
have been classified as discontinued and  the sale is expected to complete  in 
the next  six months.  The business'  assets  have been  written down  by  £35 
million to their estimated recoverable value. Other businesses classified  as 
discontinued include the Swedish cash  solutions business, a justice  services 
business in the US and the businesses  in Poland, all of which have been  sold 
in the year.

BUSINESS ANALYSIS

Secure solutions

                               Turnover       PBITA     Margins Organic Growth
                                     £m          £m
* At constant exchange      2012 2011 2012 2011 2012 2011          2012
rates
Europe *                    2,705 2,583   190   192  7.0%  7.4%             5%
North America *             1,311 1,182    76    73  5.8%  6.2%            11%
Developing Markets *        1,991 1,733   152   132  7.6%  7.6%            10%
Total secure solutions *    6,007 5,498   418   397  7.0%  7.2%             8%
Exchange differences            -   127     -     8
At actual exchange rates    6,007 5,625   418   405

The secure  solutions  business performed  well  in the  year  with  excellent 
organic growth of  8%, assisted  by strong  UK government,  US commercial  and 
developing markets  growth. Margins  were down  slightly at  7.0% due  to  the 
effect of UK government contract phasing.

Europe

                              Turnover        PBITA     Margins Organic Growth
                                    £m           £m
* At constant exchange     2012 2011 2012 2011 2012 2011          2012
rates
UK & Ireland *             1,312 1,200    115   116  8.8%  9.7%             8%
Continental Europe *       1,393 1,383     75    76  5.4%  5.5%             2%
Total Europe *             2,705 2,583    190   192  7.0%  7.4%             5%

Organic growth in Europe was 5% and margins were down slightly at 7.0% due  to 
the effect of UK government contract phasing. 

There was excellent organic  growth of 8%  in the UK &  Ireland with the  main 
growth  drivers  being  the  integrated  services  business,  which   provides 
facilities services  to  UK government  and  a growing  number  of  commercial 
organisations, and the utilities services business which is consolidating  its 
position as a leading meter reading and smart meter installation business.

Organic growth in the UK government sector was 13% and included major contract
wins and extensions such as:

  *Total facilities management for the Ministry  of Justice at more than  340 
    court buildings across the Midlands, Wales and the North of England  which 
    was mobilised in February 2012.

  *The provision of transport and accommodation for asylum applicants for the
    UK Border Agency for two  regions - the Midlands  and the East of  England 
    and  the  North  East,  Yorkshire  and  Humberside  which  completed   the 
    transition from  previous suppliers  in December.  This is  a  significant 
    achievement  as  it   was  a  complex   mobilisation  involving   multiple 
    stakeholders.

  *Outsourcing services for Lincolnshire Police  - the first contract of  its 
    kind to be awarded by a British Police Authority. This contract  mobilised 
    in April  2012  and  the  transition  has  gone  extremely  smoothly  with 
    excellent service delivery  and will result  in savings of  £28m over  ten 
    years as well as enabling investment in new technologies. The Lincolnshire
    contract includes a framework  agreement for ten  other police forces  and 
    G4S is  continuing to  have discussions  with a  number of  police  forces 
    regarding similar outsourcing propositions.

  *The opening and on-going management of  the newest and one of the  largest 
    prisons in the UK, HMP  Oakwood which opened in  April 2012 and which  now 
    holds over 1,200 prisoners.

G4S has been  selected by the  Department of Work  & Pensions to  join only  a 
handful of companies eligible  to compete to  deliver contact centre  services 
across the  UK.  In addition,  a  five  year contract  to  provide  electronic 
monitoring in Scotland starts in April this year and G4S was recently  granted 
a two year extension on the Medway Youth Training Centre contract until  March 
2015. G4S Integrated Services has been awarded its largest FM contract in the
healthcare sector  for  the  Pennine  Acute Hospitals  NHS  Trust  in  Greater 
Manchester and the Care & Justice Services business was awarded a contract  to 
supply electronic monitoring equipment to  the Ministry of Justice in  France. 
The pipeline  of  UK  government  outsourcing  opportunities  remains  strong, 
particularly in areas  such as rehabilitation,  facilities management,  police 
and health sectors. 

The UK  commercial business  was awarded  extensions to  contracts with  major 
corporates such  as  British Airways  and  Shell, the  latter  having  awarded 
contracts at 50 additional sites in  seven new countries in 2012. G4S  Utility 
Services also won a  number of significant smart  meter installation and  data 
management contracts for British Gas  and other major utility providers.  The 
pipeline  of  new  major  commercial  contracts  remains  strong  in  the  UK, 
particularly within the media and financial sectors.

Trading conditions  in  Ireland  remained challenging  in  2012;  however  the 
bidding  pipeline,  especially  in  the   area  of  security  systems,   looks 
encouraging for the remainder of the year.

The Continental  Europe  region  performed  reasonably  against  an  uncertain 
economic backdrop. Overall  organic growth  was 2%.  The European  parliament 
contract in Belgium  ended in May  2012 but G4S  Luxembourg was successful  in 
winning the security  contract for  the European parliament  in Luxembourg  in 
April 2012. Margins were down slightly due to challenging economic  conditions 
throughout the region. To counteract this, a number of efficiency  initiatives 
were implemented which reduced direct and overhead employee headcount  numbers 
by around 250, alongside a number of location closures throughout Europe. This
will help support margins in Europe over the next 18 months.

Revenues for the security systems business,  which accounts for around 20%  of 
Continental European  secure solutions  revenues, were  similar to  the  prior 
year.

There were some notable strong performances in the region - in Sweden, G4S won
a secure solutions contract with AB Volvo from April 2012 for three years  and 
the security systems business grew  strongly. In addition there were  contract 
wins in  Belgium,  Norway,  Finland,  Austria and  Denmark  for  customers  in 
government, retail,  transportation and  telecoms  sectors. The  business  in 
Greece has performed well  despite the challenges of  the economic crisis  and 
several new contracts have started recently with organisations such as the  US 
Embassy and Hellenic Petroleum.

Organic growth in most Eastern European markets has now stabilised to the  low 
single-digit level overall, but  there have been declines  in Hungary and  the 
Czech Republic  offset  by  excellent  growth in  Ukraine  and  Uzbekistan.  A 
significant contract has been won with  a major steel manufacturer in  Ukraine 
and contracts have also been won recently in Slovakia for companies in sectors
such  as  manufacturing,  electronics  and  retail.  The  group  divested  its 
businesses in Poland in September.

North America

                                Turnover      PBITA    Margins Organic Growth
                                      £m         £m
* At constant exchange rates  2012 2011 2012 2011 2012 2011          2012
North America *              1,311 1,182   76    73 5.8%  6.2%            11%

Organic growth  in North  America was  strong  at 11%,  assisted by  a  strong 
performance in  the US  commercial  business and  the  start-up of  the  CATSA 
aviation contract in Canada. Margins were lower compared to the prior year due
to a decline in major infrastructure system projects. The US security systems
business worked on a number of systems integration projects for Tampa Airport,
Iberdrola, and the  Port of Tacoma  and has a  record order book  representing 
more than 12 months' work in hand.

In theUnited Statesthe commercial  sector had its  strongest year on  record 
with a  continuing positive  outlook  and a  strong visible  sales  pipeline. 
Recent contract awards have been in the technology, healthcare,  distribution, 
chemical, manufacturing and  retail sectors. G4S  commenced the provision  of 
security solutions for a major automotive company from January 2012 valued  at 
$70 million  per  annum  for  three years.  The  group's  largest  commercial 
contract with Bank of  America was extended until  2014 and G4S North  America 
has been  awarded a  secure solutions  contract with  Google for  some of  its 
locations in the United States and data centres in Belgium and Finland.

Additional examples  of  major  contract awards  include:  worldwide  security 
services for  GE -  building on  a long-standing  service relationship  -  and 
compliance and investigations services for  Gallagher Bassett, where G4S  will 
staff and manage the Special Investigations Unit responsible for investigating
fraudulent workers' compensation claims.

The group has already taken steps to  mitigate the cost impact of the  Patient 
Protection and Affordable Care Act  (PPACA)during 2013 and is evaluating  the 
most effective way to mitigate the increase to the cost base thereafter.Most
of the  health plans  currently provided  to G4S  employees already  meet  the 
current requirements  of  the PPACA  and  so it  is  not expected  to  have  a 
significant impact on US margins.

2012 was a challenging year for  the group's US Government Solutions  business 
as a result of  a significant reduction inUS  federal government spending  in 
both the US domestic government sector and in contracts for overseas  landmine 
clearance. The group has announced it has decided to divest the business to a
parent able to add or create more value  than G4S is able to, being a  foreign 
parent with limited control over the operations of the business and restricted
access to the data required to run the business successfully.

InCanada, the organic  growth rate  was more than  30% driven  mainly by  the 
CATSA aviation  security  contract  which  started on  1  November  2011.  The 
contract is for security at  21 airports in the  Pacific region of Canada  and 
has expected revenue of more than CAD$ 400 million over the initial  five-year 
term.

Developing Markets

                               Turnover       PBITA     Margins Organic Growth
                                     £m          £m
* At constant exchange      2012 2011 2012 2011 2012 2011          2012
rates
Asia *                        671   615    39    34  5.8%  5.5%             9%
Middle East *                 381   371    33    31  8.7%  8.4%             5%
Africa *                      357   326    29    31  8.1%  9.5%             9%
Latin America & Caribbean *   582   421    51    36  8.8%  8.6%            14%
Total Developing Markets *  1,991 1,733   152   132  7.6%  7.6%            10%

In Developing Markets, revenue growth was 15% and organic growth was excellent
at 10% with margins maintained overall. 

Organic growth in Asia  was 9% and margins  were up from 5.5%  to 5.8% due  to 
improved business performance  in a number  of countries.   There was  strong 
organic revenue  growth in  Thailand, Philippines,  China and  Indonesia.  The 
business in  India,  the largest  market  in the  region  for the  group,  has 
refocused its activity on high growth, higher margin contracts and achieved  a 
good performance  with  double-digit  revenue  growth  and  strongly  improved 
margins. The group exited Pakistan during October 2012.

A manned security contract with the United Nations in Papua New Guinea started
in August.  There was  modest revenue  growth in  Australia with  recent  wins 
including DP World and Bechtel and  a new immigration contract offsetting  the 
loss of the Western  Australia prisoner transportation  contract and there  is 
positive growth momentum in Australia going into 2013. The offender monitoring
contract in New Zealand was extended to the end of 2013.

In the Middle East, organic growth was 5% helped by double-digit growth  rates 
in Lebanon and Egypt but was offset by weakness in some systems businesses  in 
the region.  Margins  improved compared  to  the  prior year  due  to  one-off 
government legislated  payments  made in  Saudi  Arabia in  H1  2011.  Recent 
contract wins include an electronic monitoring contract in Saudi Arabia and in
UAE for the Abu Dhabi Educational Council and Dubai Airport. The group  exited 
the US Embassy contract in Kabul, Afghanistan in July.

Africa performed strongly  with organic  growth of 9%  particularly in  Kenya, 
Morocco and DRC. Margins were lower at 8.1%, due to contract losses in Nigeria
however the business appears  to have stabilised there.  New contracts won  or 
renewed are  mainly in  key strategic  sectors such  as automotive,  aviation, 
mining, oil and  gas and foreign  embassies, including the  US embassy in  the 
Ivory Coast.  The  current  bidding  pipeline  in  Africa  is  very  strong  - 
particularly in  financial services,  mining  and embassies,  with  increasing 
numbers of both multi-country, pan-African and larger scale bids. 

The Latin America and Caribbean region has performed well with organic  growth 
of 14% and  improved margins as  a result of  strong performances across  most 
countries. There have  also been  a number  of strategic  contract wins,  for 
example in  the  financial  services,  government,  mining  and  oil  and  gas 
sectors.In September, the  group announced  it had extended  its presence  in 
Brazil significantly with  the acquisition  of Vanguarda,  a leading  security 
solutions provider  which  provides G4S  with  a manned  security  licence  in 
Brazil. The  group  was  also  successful  in  bidding  for  security  systems 
contracts in  Brazil,  winning a  significant  contract with  Telebras  and  a 
contract for the Manaus football stadium.

Cash Solutions

                               Turnover       PBITA     Margins Organic Growth
                                     £m          £m
* At constant exchange       2012 2011 2012 2011 2012 2011          2012
rates
Europe *                      780   785    78    83 10.0% 10.6%            -1%
North America *               114   106     5     2  4.4%  1.9%             8%
Developing Markets *          396   361    52    47 13.1% 13.0%            10%
Total Cash Solutions *      1,290 1,252   135   132 10.5% 10.5%             3%
Exchange differences            -    42     -     5
At actual exchange rates    1,290 1,294   135   137

The cash solutions business delivered a solid performance overall with organic
revenue growth of 3% despite the  continuation of low interest rates having  a 
negative impact  on developed  markets growth  opportunities. Overall  margins 
were maintained at 10.5%,  with improvements in  North America and  developing 
markets margins offset by the impact of contract phasing in Europe.

Organic growth  in  Europe declined  by  1%. In  the  UK &  Ireland,  revenues 
declined by 1% as a result of the  loss of two ATM contracts in the middle  of 
2011 which also impacted margins. Performance began to improve towards the end
of the year as three major new contracts  commenced and as a result of a  cost 
reduction  programme  in  Ireland.  The   new  contracts  are  for   financial 
institutions  providing   outsourcing  of   cash  processing,   cash   machine 
replenishment  and  engineering  at  bank  branches  and  remote  sites.   The 
engineering is provided on a full 24/7 basis - an industry first.

Outside  the  UK,   margins  improved  through   strong  underlying   business 
performance and cost cutting measures. In Sweden, the cash solutions  business 
was sold in February  2012. Elsewhere in  Continental Europe, organic  growth 
was positive,  helped  by  product  development  in  the  Netherlands,  strong 
performances across all services in  Belgium and productivity improvements  in 
Finland. Serbia achieved double-digit growth.

In North America, the performance of the cash solutions business in Canada was
improved through stronger alignment  in key sectors  with the Canadian  secure 
solutions business in the first half  of 2012. This has resulted in  contract 
awards and extensions with key customers in the retail and financial  services 
sectors.

Organic growth in  Developing Markets  was good  at 10%  and margins  improved 
slightly overall due mainly to an improved performance in the Middle East cash
solutions businesses. In  particular the  businesses in Saudi  Arabia and  UAE 
achieved an improved  performance and excellent  growth. Strong margins  were 
achieved in Hong Kong, aided by successfully negotiating price increases  with 
a number of key customers. In Ecuador, three leading financial institutions  - 
Banco Bolivariano, Banco Internacional and  Produbanco - have selected G4S  to 
provide cash-in-transit services  to more  than 250 bank  branches around  the 
country. With services set to begin in  May 2013, the seven year contract  has 
an overall  value of  £26m. In  South  Africa, in  January 2013  G4S  acquired 
Deposita  the  South  African  market  leader  in  cash  devices  and  related 
cash-in-transit, cash processing and insurance services for the retail sector.
The Deposita  technology will  broaden the  G4S Cash360  technology  offering, 
especially in other developing markets.

OUTLOOK

The group expects the outlook for Continental European markets to continue  to 
be challenged by the economic environment, despite the proactive measures  the 
group has taken through the cost reduction exercise.

The North American commercial and UK government businesses performed extremely
strongly in 2012 and although the outlook  is still very positive, it will  be 
difficult to maintain  such high  growth going into  2013. Developing  markets 
(which now represent 33% of group revenues and 37% of group profits)  continue 
to perform well and the group expects strong double-digit growth in developing
markets in 2013.

Developing markets growth, investment in key sector expertise and  outsourcing 
trends continue to be key business  growth drivers and so, overall, the  group 
expects to see good  continuing organic growth and  margins to be  maintained. 
The breadth of  the group's portfolio  in 125 countries  continues to  present 
many new growth opportunities; market leading businesses in many countries,  a 
broad customer base and the current  £3.5 billion per annum contract  pipeline 
provide confidence in the outlook for the group.

OTHER FINANCIAL ISSUES

Acquisitions and divestments

The group invested a total net amount of £93 million in 2012 in  acquisitions, 
with the  main  acquisition  being Vanguarda,  a  leading  Brazilian  security 
company. Other acquisitions included safety and fire training consultancies in
the Netherlands, Belgium and Ireland.

During 2012, G4S disposed  of its Swedish cash  solutions business and a  loss 
making electronic monitoring business in the US.

Following a  strategic  review,  the  group  has  decided  to  divest  its  US 
Government Solutions business  to a parent  able to add  or create more  value 
than we are able to, being a non-US parent with restricted access to important
commercial data and  limited ability  to manage  the business  and share  best 
practice. The sale is  expected to complete during  2013 and the business  has 
been classified as discontinued in the 2012 results.

The group's acquisition strategy will continue to focus on niche opportunities
which will  both  help  to  deliver our  strategic  objectives  and  meet  our 
financial performance criteria. We prioritise acquisitions that:
-   build market share in key countries
-   drive organic growth
-   access key sectors where security and safety are a strategic threat
-  introduce or build new service lines such as facilities management in  the 
UK and risk consulting internationally
-  access key geographic markets

The group expects to  invest up to  £200 million in  acquisitions in 2013  and 
will continue to be active in its divestment strategy where businesses are not
in line with the group's strategy or where an alternative parent could add  or 
drive more value from a business.

Financing and interest

The group has a prudent approach  to its balance sheet whilst maintaining  the 
flexibility to pursue acquisitions when appropriate. G4S has had an investment
grade rating since March  2009 when Standard &  Poor's assessed the group  BBB 
Stable. However, subsequent  to the  G4S Olympic contract  announcement on  13 
July 2012 and the G4S plc board review in September, Standard & Poor's revised
the rating to BBB- Stable in November. The group's objective is to manage  its 
business and finances so that it  continues as an investment grade entity  and 
to continue to maintain a net debt to  EBITDA ratio of around 2 to 2.5  times. 
The group is currently well financed, has a diverse range of finance providers
and the maturity profile  is long term. Borrowings  are principally in  pounds 
sterling, US  dollars  and euros  reflecting  the geographies  of  significant 
operational assets and profits.

As at 31 December 2012, net debt was £1,802 million and our headroom was  £856 
million. The group has  sufficient borrowing capacity  to finance its  current 
investment plans.

Net interest payable on net debt was  £101 million. This is a net increase  of 
2% over the 2011 cost of £99  million, due principally to the increase in  the 
group's net debt.

The average cost  of gross borrowings  during the year,  net of interest  rate 
hedging, was 4.3% compared to 4.9% in 2011.

Taxation

The effective tax rate for the  year on adjusted earnings was 22%,  consistent 
with 2011. The cash tax rate is  22.9% compared to 18.5% in 2011. Our  target 
is to maintain the effective tax rate at the current level. 

Retirement benefit obligations

The group's funding shortfall on funded defined retirement benefit schemes, on
the valuation basis  specified in  IAS19 Employee Benefits,  was £436  million 
before tax or £335 million after tax (31 December 2011: £295 million and  £212 
million respectively). The main  scheme is in the  UK. The latest  completed 
full actuarial valuations were undertaken as at 5 April 2009 in respect of all
three sections  of the  UK  scheme. The  valuations as  at  5 April  2012  are 
currently in progress. However, all  actuarial assumptions were reviewed  and 
updated as at 31 December 2012.

The net pension obligation has increased significantly since 31 December  2011 
mainly due to  the actuarial  loss in the  period arising  from the  financial 
environment and the  resulting low interest  rates applicable for  discounting 
the liabilities.  The  discount rate  used  to calculate  the  obligation  has 
decreased to 4.5%,  compared to  5.0% used  at 31  December 2011.  Additional 
company contributions of £37 million were paid into the schemes during 2012.

We believe that, over the very  long term in which retirement benefits  become 
payable, investment  returns  should eliminate  the  deficit reported  in  the 
schemes in respect of  past service liabilities.  However, in recognition  of 
the regulatory  obligations upon  pension fund  trustees to  address  reported 
deficits, the group's deficit recovery  plan will see cash contributions  made 
to the scheme  of approximately  £38 million  in 2013  with annual  increments 
thereafter still subject to negotiation.

Dividend

The board recommends a  final dividend of 5.54p  per share (DKK 0.4730).  This 
represents an increase  of 8%  on the final  dividend for  2011. The  interim 
dividend was 3.42p per share (DKK 0.3220) and the total dividend, if approved,
will be 8.96p per share  (DKK 0.7950), representing an  increase of 5% on  the 
total dividend for 2011.

The group  expects to  continue to  increase dividends  broadly in  line  with 
normalised adjusted earnings.

                                                                 13 March 2013

G4S plc
Preliminary results announcement

        For the year ended 31 December 2012

      Consolidated income statement

For the year ended 31 December 2012

                                                     2012     2012  2012  2011
                                             Ex. Olympics Olympics Total
                                       Notes           £m       £m    £m    £m
Continuing operations
Revenue                                    2        7,297      204 7,501 6,966
Profit from operations before
amortisation and impairment of
acquisition-related intangible assets
and exceptional items (PBITA)              2          516        -   516   502
Amortisation and impairment of
acquisition-related intangible assets                (86)        -  (86)  (96)
Acquisition-related expenses                          (7)        -   (7)   (2)
Exceptional items:
Loss on Olympics contract                               -     (70)  (70)     -
Other costs on Olympics                                 -     (11)  (11)     -
Sponsorships costs on Olympics                          -      (7)   (7)     -
Restructuring costs                                  (45)        -  (45)     -
Aborted acquisition and legal costs                     -        -     -  (55)
                                                     (45)     (88) (133)  (55)
Profit from operations before interest
and taxation (PBIT)                      2,3          378     (88)   290   349
Finance income                             6           94        -    94   111
Finance costs                              7        (206)      (3) (209) (203)
Profit before taxation (PBT)                          266     (91)   175   257
Taxation:
Before amortisation and impairment of
acquisition-related intangible assets
and exceptional items                                               (90)  (92)
On amortisation and impairment of
acquisition-related intangible assets                                 25    25
On acquisition-related expenses                                        2     1
On exceptional items                                                  21    13
                                                                    (42)  (53)
Profit after taxation                                                133   204
Loss from discontinued operations          4                        (63)   (6)
Profit for the year                                                   70   198
Attributable to:
Equity holders of the parent                                          48   181
Non-controlling interests                                             22    17
Profit for the year                                                   70   198
Earnings per share attributable to
equity shareholders of the parent         10
For profit from continuing operations:
Basic and diluted                                                   7.9p 13.3p
For profit from continuing and
discontinued operations:
Basic and diluted                                                   3.4p 12.9p
Dividends declared and proposed in
respect of the year                        9
Interim dividend of 3.42p per share
(2011:3.42p)                                                          48    48
Final dividend of 5.54p per share
(2011: 5.11p)                                                         78    72
Total dividend of 8.96p per share
(2011: 8.53p)                                                        126   120

Consolidated statement of comprehensive income
For the year ended 31 December 2012

                                                                    2012  2011
                                                                      £m    £m
Profit for the year                                                   70   198
Other comprehensive income
Exchange differences on translation of foreign operations           (95)  (65)
Change in fair value of net investment hedging financial
instruments                                                          (4)     -
Change in fair value of cash flow hedging financial instruments      (6)     8
Actuarial losses on defined retirement benefit schemes             (177)  (73)
Tax on items taken directly to equity                                 37     9
Other comprehensive income, net of tax                             (245) (121)
Total comprehensive income for the year                            (175)    77
Attributable to:
Equity holders of the parent                                       (194)    62
Non-controlling interests                                             19    15
Total comprehensive income for the year                            (175)    77

Consolidated statement of changes in equity
For the year ended 31 December 2012

                          Attributable to equity holders of the
                                                         parent
                            
                          Share   Share Retained    Other           NCI
                        capital premium earnings reserves Total reserve  Total
                           2011    2011     2011     2011  2011    2011   2011
                             £m      £m       £m       £m    £m      £m     £m
At 1 January 2011           353     258      420      546 1,577      46  1,623
Total comprehensive
income attributable
to equity shareholders
of the parent                 -       -      110     (48)    62      15     77
Dividends declared            -       -    (114)        - (114)    (10)  (124)
Own shares purchased          -       -        -     (13)  (13)       -   (13)
Own shares awarded            -       -      (9)        9     -       -      -
Transactions with
non-controlling
interests                     -       -     (19)        -  (19)     (1)   (20)
Equity-settled
transactions                  -       -        1        -     1       -      1
At 31 December 2011         353     258      389      494 1,494      50  1,544
                          Attributable to equity holders of the
                                                         parent
                            
                          Share   Share Retained    Other           NCI  Total
                        capital premium earnings reserves Total reserve Equity
                           2012    2012     2012     2012  2012    2012   2012
                             £m      £m       £m       £m    £m      £m     £m
At 1 January 2012           353     258      389      494 1,494      50  1,544
Total comprehensive
income attributable
to equity shareholders
of the parent                 -       -    (126)     (68) (194)      19  (175)
Dividends declared            -       -    (120)        - (120)    (18)  (138)
Own shares purchased          -       -        -      (6)   (6)       -    (6)
Own shares awarded            -       -      (2)        2     -       -      -
Transactions with
non-controlling
interests                     -       -        2        -     2       4      6
At 31 December 2012         353     258      143      422 1,176      55  1,231

Consolidated statement of financial position
At 31 December 2012

                                                                  2012    2011
                                                         Notes      £m      £m
ASSETS
Non-current assets
Goodwill                                                         2,123   2,205
Other acquisition-related intangible assets                        204     269
Other intangible assets                                             87      87
Property, plant and equipment                                      512     531
Investment in associates                                             3       9
Trade and other receivables                                        129     162
Deferred tax assets                                                179     157
                                                                 3,237   3,420
Current assets
Inventories                                                        128     123
Investments                                                         56      70
Trade and other receivables                                      1,497   1,546
Cash and cash equivalents                                          469     433
Assets classified as held for sale                       11        229      35
                                                                 2,379   2,207
Total assets                                                     5,616   5,627
LIABILITIES
Current liabilities
Bank overdrafts                                                   (17)    (53)
Bank loans                                                        (18)    (47)
Loan notes                                                        (40)       -
Obligations under finance leases                                  (18)    (16)
Trade and other payables                                       (1,196) (1,251)
Current tax liabilities                                           (41)    (48)
Provisions                                                        (32)    (30)
Liabilities associated with assets classified as held
for sale                                                 11       (52)    (29)
                                                               (1,414) (1,474)
Non-current liabilities
Bank loans                                                       (327)   (885)
Loan notes                                                     (1,999) (1,180)
Obligations under finance leases                                  (43)    (48)
Trade and other payables                                          (18)    (19)
Retirement benefit obligations                                   (471)   (344)
Provisions                                                        (45)    (41)
Deferred tax liabilities                                          (68)    (92)
                                                               (2,971) (2,609)
Total liabilities                                              (4,385) (4,083)
Net assets                                                       1,231   1,544
EQUITY
Share capital                                                      353     353
Share premium and reserves                                         823   1,141
Equity attributable to equity holders of the parent              1,176   1,494
Non-controlling interests                                           55      50
Total equity                                                     1,231   1,544

Consolidated statement of cash flows
For the year ended 31 December 2012

                                                                    2012  2011
                                                             Notes    £m    £m
Profit before taxation                                               175   257
Adjustments for:
Finance income                                                      (94) (111)
Finance costs                                                        209   203
Depreciation of property, plant and equipment                        121   120
Amortisation and impairment of acquisition-related
intangible assets                                                     86    96
Amortisation of other intangible assets                               24    17
Acquisition-related expenses                                           7     2
Profit on disposal of property, plant and equipment and
intangible assets other than acquisition-related                     (3)  (11)
Profit on disposal of subsidiaries                                   (2)  (33)
Equity-settled transactions                                            -     1
Operating cash flow before movements in working capital              523   541
Increase in inventories                                             (14)  (20)
Increase in receivables                                            (117) (123)
Increase in payables                                                   6    77
Decrease in provisions                                              (5)   (7)
Decrease in retirement benefit obligations                          (37)  (40)
Net cash flow from operating activities of continuing
operations                                                           356   428
Net cash flow from operating activities of discontinued
operations                                                            16    21
Cash generated by operations                                         372   449
Tax paid                                                            (85)  (77)
Net cash flow from operating activities                              287   372
Investing activities
Interest received                                                      6    17
Cash flow from associates                                              3     4
Purchases of property, plant and equipment and intangible
assets other than acquisition-related                              (160) (173)
Proceeds on disposal of property, plant and equipment and
intangible assets other than acquisition-related                      23    31
Acquisition of subsidiaries                                        (101) (165)
Net cash balances acquired                                            15     6
Disposal of subsidiaries                                              19    37
Sale of investments                                                    -    10
Net cash used in investing activities                              (195) (233)
Financing activities
Dividends paid to non-controlling interests                         (19)  (10)
Dividends paid to equity shareholders of the parent                (120) (114)
Other net movement in borrowings                                     324   239
Transactions with non-controlling interests                            6  (18)
Interest paid                                                      (117) (119)
Repayment of obligations under finance leases                       (22)  (17)
Own shares purchased                                                 (6)  (13)
Net cash flow from financing activities                               46  (52)
Net increase in cash, cash equivalents and bank overdrafts   12      138    87
Cash, cash equivalents and bank overdrafts at the beginning
of the year                                                          370   306
Effect of foreign exchange rate fluctuations on cash held           (36)  (23)
Cash, cash equivalents and bank overdrafts at the end of the
year                                                                 472   370

1) Basis of preparation and accounting policies

The financial  information set  out above  does not  constitute the  company's 
statutory accounts for the  years ended 31 December  2012 or 2011.  Statutory 
accounts for 2011 have been delivered to the registrar of companies, and those
for 2012 will be delivered in due course. The auditors have reported on those
accounts; their reports were (i) unqualified, (ii) did not include  references 
to any matters to which the auditors drew attention by way of emphasis without
qualifying their reports and (iii) did  not contain a statement under  section 
498(2) or (3) of the Companies Act 2006.

The comparative income statement for the year ended 31 December 2011 has  been 
re-presented for  operations qualifying  as  discontinued during  the  current 
year. Revenue from continuing operations has been reduced by £556m and PBT has
been decreased by £22m compared  to the figures published previously.  Further 
details of discontinued operations are  presented within note 7. In  addition, 
the comparative consolidated statement of financial position as at 31 December
2011 has been restated  to reflect the completion  during 2012 of the  initial 
accounting in respect of  acquisitions made during  2011. Adjustments made  to 
the provisional  calculation of  the  fair values  of assets  and  liabilities 
acquired amount to £9m, with an  equivalent increase in the reported value  of 
goodwill.

2) Operating segments

The group  operates in  two  core product  areas:  secure solutions  and  cash 
solutions which represent  the group's  reportable segments. For  each of  the 
reportable segments,  the group's  CEO (the  chief operating  decision  maker) 
reviews internal management reports on a regular basis. The group operates on
a worldwide basis and derives a  substantial proportion of its revenue,  PBITA 
and PBIT from each of  the following geographical regions: Europe  (comprising 
the United Kingdom and  Ireland, and Continental  Europe), North America,  and 
Developing Markets (comprising the Middle East and Gulf States, Latin  America 
and the Caribbean, Africa, and Asia Pacific).

Segment information for continuing operations is presented below:

                                        2012   2011
Revenue by operating segment              £m     £m
Secure Solutions
   UK and Ireland                  1,516 1,252
   Continental Europe              1,393 1,475
 Europe                             2,909 2,727
 North America                      1,311 1,169
   Middle East and Gulf States       381   368
   Latin America and the Caribbean   582   427
   Africa                            357   346
   Asia Pacific                      671   635
 Developing Markets                 1,991 1,776
Total Secure Solutions                6,211 5,672
Cash Solutions
 Europe                               780   817
 North America                        114   106
 Developing Markets                   396   371
Total Cash Solutions                  1,290 1,294
Total revenue                         7,501 6,966

2)    Operating segments (continued)

Revenue by geographical area           2012  2011
                                         £m    £m
Europe                                3,689 3,544
North America                         1,425 1,275
Developing Markets                    2,387 2,147
Total revenue                         7,501 6,966
PBITA by reportable segment            2012  2011
                                         £m    £m
Secure Solutions
   UK and Ireland                    115   119
   Continental Europe                 75    81
 Europe                               190   200
 North America                         76    72
   Middle East and Gulf States        33    31
   Latin America and the Caribbean    51    37
   Africa                             29    33
   Asia Pacific                       39    35
 Developing Markets                   152   136
Total Secure Solutions                  418   408
Cash Solutions
 Europe                                78    88
 North America                          5     2
 Developing Markets                    52    47
Total Cash Solutions                    135   137
Total PBITA before head office costs    553   545
Head office costs                      (37)  (43)
Total PBITA                             516   502
PBITA by geographical area
Europe                                  268   288
North America                            81    74
Developing Markets                      204   183
Total PBITA before head office costs    553   545
Head office costs                      (37)  (43)
Total PBITA                             516   502

Result by reportable segment                                         2012 2011
                                                                       £m   £m
Total PBITA                                                           516  502
Acquisition-related costs                                             (7)  (2)
Amortisation and impairment of acquisition-related intangible
assets                                                               (86) (96)
Exceptional items                                                   (133) (55)
Total PBIT                                                            290  349
Secure Solutions                                                      344  334
Cash Solutions                                                        116  113
Head office costs                                                    (37) (43)
Exceptional items                                                   (133) (55)
Total PBIT                                                            290  349

3) Profit from operations before interest and taxation (PBIT)

The income statement can be analysed as follows:

Continuing operations           2012     2012    2012    2011
                        Ex. Olympics Olympics   Total   Total
                                  £m       £m      £m      £m
Revenue                        7,297      204   7,501   6,966
Cost of sales                (5,682)    (274) (5,956) (5,414)
Gross profit                   1,615     (70)   1,545   1,552
Administration expenses      (1,237)     (18) (1,255) (1,203)
PBIT                             378     (88)     290     349

Included within  administration  expenses  in  the current  year  is  £86m  of 
amortisation   of    acquisition-related    intangible    assets,    £7m    of 
acquisition-related expenses  and £45m  of restructuring  costs. The  cost  of 
sales relating to  the Olympics contract  of £263m includes  the £70m loss  in 
relation to  the settlement  of the  London 2012  Olympics contract,  and  the 
additional £7m of sponsorship  costs and £11m of  other costs on the  contract 
are included within administrative expenses.

Included  within  administration  expenses  in  the  prior  year  is  £83m  of 
amortisation of  acquisition-related intangible  assets  and a  £13m  goodwill 
impairment charge  relating  to  the  group's businesses  in  Greece,  £2m  of 
acquisition-related expenses and £55m of aborted acquisition and legal  costs. 
The  aborted  acquisition  costs  include  debt  finance  underwriting  fees, 
financing and hedging costs that arose on the proposed acquisition of ISS  A/S 
which was terminated on 1 November 2011.

4) Discontinued operations

Operations qualifying as  discontinued in  2012 comprise the  cash and  secure 
solutions businesses in Pakistan,  which were disposed of  in October 2012,  a 
justice business in  the United States  of America, which  was disposed of  in 
April 2012 and our US Government Solutions business.

Operations qualifying as discontinued  in 2011 comprised  the cash and  secure 
solutions businesses in Poland, which were disposed of in September 2012;  the 
cash solutions business in Sweden, which was disposed of in February 2012  and 
the secure solutions business  in Russia. The UK  risk assessment business  in 
Afghanistan was classified as held for sale in December 2011 however, upon the
extension of a major contract, it has been reclassified as continuing as at 31
December 2012.

5) Acquisitions

The group undertook  a number  of acquisitions in  the year.  The total  fair 
value of net assets acquired amounted  to £17m which included the  recognition 
of £31m of acquisition-related intangible assets, generating goodwill of £76m,
satisfied by a total consideration of £93m, all of which has been paid in  the 
year. Related costs of £7m were incurred and charged to the income statement.

Acquisitions in subsidiary undertakings principally includes the purchase of a
100% interest in Vanguarda Segurança e Vigilância Ltda "Vanguarda", a security
personnel, security systems and monitoring services provider in Brazil.

6) Finance income

                                                            2012 2011
                                                              £m   £m
Interest income on cash, cash equivalents and investments     11   10
Other interest income                                          1    8
Expected return on defined retirement benefit scheme assets   82   93
Total finance income                                          94  111

7) Finance costs

                                                        2012 2011
                                                          £m   £m
Interest on bank overdrafts, loans and loan notes        118  105
Interest receivable on loan note related derivatives    (10)    -
Interest on obligations under finance leases               4    4
Other interest charges                                     7    4
Total group borrowing costs                              119  113
Finance costs on defined retirement benefit obligations   90   90
Total finance costs                                      209  203

8) Taxation

                                      2012 2011
                                        £m   £m
Current taxation expense              (74) (62)
Deferred taxation credit                32    9
Total income tax expense for the year (42) (53)

9) Dividends

                                                     Pence       DKK 2012 2011
                                                per share per share   £m   £m
Amounts recognised as distributions to equity
holders of the parent in the year
Final dividend for the year ended 31 December         4.73    0.4082
2010                                                                    -   66
Interim dividend for the six months ended 30          3.42    0.2928
June 2011                                                               -   48
Final dividend for the year ended 31 December         5.11    0.4544
2011                                                                   72    -
Interim dividend for the six months ended 30          3.42    0.3220
June 2012                                                              48    -
                                                                      120  114
Proposed final dividend for the year ended 31
December 2012                                         5.54    0.4730   78

The proposed final  dividend is  subject to  approval by  shareholders at  the 
Annual General Meeting. If  so approved, it  will be paid on  14 June 2013  to 
shareholders who are on the register on 17 May 2013. The exchange rate used to
translate it into Danish kroner is that at 12 March 2013. 

10) Earnings/(loss)  per share  attributable to  equity shareholders  of  the 
parent

                                                                   2012   2011
                                                                     £m     £m
From continuing and discontinued operations
Earnings
Profit for the year attributable to equity holders of the parent     48    181
Number of shares (m)
Weighted average number of ordinary shares                        1,403  1,405
Earnings per share from continuing and discontinued operations
(pence)
Basic and diluted                                                  3.4p  12.9p
From continuing operations
Earnings
Profit for the year attributable to equity holders of the parent     48    181
Adjustment to exclude loss for the year from discontinued
operations (net of tax)                                              63      6
Profit from continuing operations                                   111    187
Earnings per share from continuing operations (pence)
Basic and diluted                                                  7.9p  13.3p
From discontinued operations
Loss per share from discontinued operations (pence)
Basic and diluted                                                (4.5)p (0.4)p
From adjusted earnings
Earnings
Profit from continuing operations                                   111    187
Adjustment to exclude net retirement benefit finance
cost/(income) (net of tax)                                            6    (2)
Adjustment to exclude amortisation and impairment of
acquisition-related intangible assets (net of tax)                   61     71
Adjustment to exclude acquisition-related expenses (net of tax)       5      1
Adjustment to exclude exceptional items (net of tax)                115     42
Adjusted profit for the year attributable to equity holders of
the parent                                                          298    299
Weighted average number of ordinary shares (m)                    1,403  1,405
Adjusted earnings per share (pence)                               21.2p  21.3p

In the opinion of the directors the  earnings per share figure of most use  to 
shareholders is  that  which  is  adjusted.  This  figure  better  allows  the 
assessment of operational performance, the  analysis of trends over time,  the 
comparison of different businesses and the projection of future earnings.

11) Disposal groups classified as held for sale

At 31 December 2012, disposal groups classified as held for sale comprised the
assets and liabilities associated with  the US Government Solutions  business 
which have been written down to their  estimated realisable value by way of  a 
£35m goodwill impairment charge.

At 31 December  2011, disposal groups  classified as held  for sale  primarily 
comprises the  assets  and  liabilities associated  with  the  cash  solutions 
business in Sweden, which was  disposed of on 27  February 2012, the cash  and 
secure solutions businesses in  Poland, which was disposed  of on 4  September 
2012 and the UK  risk assessment services business  in Afghanistan, which  has 
now been  reclassified  as  continuing  following the  extension  of  a  major 
contract.

12) Analysis of net debt

A reconciliation of net debt to  amounts in the consolidated balance sheet  is 
presented below:

                                                                  2012    2011
                                                                    £m      £m
Cash and cash equivalents                                          469     433
Investments                                                         56      70
Net cash and overdrafts included within disposal groups
classified as held for sale                                         20    (10)
Net debt (excluding cash and overdrafts) included within
disposal groups classified as held for sale                         10       -
Bank overdrafts                                                   (17)    (53)
Bank loans                                                       (345)   (932)
Loan notes                                                     (2,039) (1,180)
Fair value of loan note derivative financial instruments           105     120
Obligations under finance leases                                  (61)    (64)
Total net debt                                                 (1,802) (1,616)
An analysis of movements in net debt in the year is presented below:
                                                                  2012    2011
                                                                    £m      £m
Increase in cash, cash equivalents and bank overdrafts per
consolidated cash flow statement                                   138      87
Sale of investments                                                  -    (10)
Increase in debt and lease financing                             (302)   (222)
Change in net debt resulting from cash flows                     (164)   (145)
Borrowings acquired with subsidiaries                              (1)     (5)
Net additions to finance leases                                   (21)    (11)
Movement in net debt in the year                                 (186)   (161)
Translation adjustments                                              -    (29)
Net debt at the beginning of the year                          (1,616) (1,426)
Net debt at the end of the year                                (1,802) (1,616)

Non GAAP measure - cash flow

The directors  consider it  is of  assistance to  shareholders to  present  an 
analysis of the  group's operating  cash flow in  accordance with  the way  in 
which the group is managed, together  with a reconciliation of that cash  flow 
to  the  net  cash  flow  from  operating  activities  as  presented  in   the 
consolidated cash flow statement.

Operating cash flow

        For the year ended 31 December 2012

                                                                    2012  2011
                                                                      £m    £m
Group PBITA                                                          516   502
Depreciation, amortisation and profit on disposal of fixed assets    140   126
Movement in working capital and provisions                          (27)  (73)
Net cash flow from capital expenditure                             (137) (134)
Operating cash flow                                                  492   421
Reconciliation of operating cash flows                              2012  2011
                                                                      £m    £m
Net cash flow from operating activities per consolidated cash flow   287   372
statement
Net cash flow from capital expenditure                             (137) (134)
Add-back cash flow from exceptional items and discontinued           220    66
operations
Add-back additional pension contributions                             37    40
Add-back tax paid                                                     85    77
Operating cash flow                                                  492   421

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