Security firm G4S (GFS) gets a big thumbs up as it reveals improved earnings and better cash flow.
Shares are up 17.6% to 230.5p, continuing their rally since a profit warning in 2013.
The company says its positive half year results have been supported by new contracts worth £1.4 billion and revealed an interim dividend of 3.59p per share.
Profit before interest and tax is up 8.2% to £199 million in the year to 30 June. This has been driven by higher revenues of £3.1 billion, while productivity programmes boosted earnings by 13.3%.
G4S says higher operating profits of £168 million and improved working capital management underpinned cash flow of £293 million, over 50% higher compared to last year.
The firm has reassured investors that it is unlikely to be affected by the EU referendum vote as more than 80% of its revenues are derived from outside the UK.
It says if the closing rates from June are applied to the results ending 30 June, pre-tax profit would have increased 6% to £211 million.
Revenue in the UK and Ireland is down 1.9% as a result of lower volumes in the employment service business, although profit before interest and tax was higher due to productivity programmes.
Over the next year, G4S is expecting contract revenues of $0.8 billion, which will be supported by commissioned services, firm contracts and orders in progress.
