Global security firm G4S upbeat about growth, sticks to debt target

EDINBURGH (Reuters) - British security company G4S sought to reassure investors that was on track to meet its full-year debt target on Tuesday, adding that its expects to increase its free cash flow on growing demand for its electronic cash management systems.

The world's largest security group, which has overhauled itself after a string of high-profile contract problems in Britain, said it expects to meet a net debt-to-core earnings (EBITDA) ratio of 2.5 times or lower by the end of 2017. The ratio was 3.2 times as of June 30.

It added that its new cash management programmes, Cash360 and Deposita, were expected to provide "significant ongoing revenues" to the group.

The company's unscheduled statement came after broker BNP Exane cut its earnings per share estimates by 1 percent for this year and by 4 percent for next, saying that "guidance that the first half inflow is unlikely to carry through to the full-year". Exane left its target price unchanged at 195 pence but the shares fell around 5 percent on Monday.

A G4S spokesman declined to comment.

Britain's outsourcers are under greater scrutiny in the wake of the country's vote to leave the European Union because they have signalled that it has slowed down their clients' decision-making processes.

This has left those with a bigger exposure to the UK, such as Capita and Mitie, more vulnerable while G4S and Serco are protected by operations overseas.

The firm appears to have put behind it a series of scandals, including being investigated by the Serious Fraud Office for overcharging the government to provide electronic tags for offenders, some of whom turned out to have been in jail or dead.

Shares in the group were down 1 percent at 229.2 pence versus a 0.2 percent decline in Britain's FTSE index.

(Reporting by Elisabeth O'Leary, editing by Louise Heavens)