G4S’s boss is adamant he will not hand over the security giant’s keys for a lowball takeover bid
Jamie Nimmo
Sunday November 01 2020, 12.01am GMT, The Sunday Times
Ashley Almanza’s first job was as a security guard — not that you would guess it from his appearance. Slim and scholarly-looking, the G4S boss had an unlikely role protecting factories in his native South Africa before heading for the UK. “Life’s full of chance and opportunity, isn’t it?” Almanza offers cryptically.
It could be a throwaway reference to how he ended up running the world’s biggest security company — but he could just as easily be referring to the hostile bidders that have pounced on the FTSE 250 company, whose weak share price has left the door open to predators.
Having once defended factories, Almanza is desperately trying to keep G4S from the clutches of smaller Canadian rival GardaWorld, which is backed by private equity firm BC Partners.
Led by outspoken Stéphan Crétier, the Montreal-based firm has made an audacious £3bn raid on G4S, the biggest of Britain’s listed outsourcers and a magnet for crises and scandals. With the clock ticking, Almanza must convince shareholders his promised turnaround is worth waiting for.
The bitter battle has pitted two very different characters against one another: the aggressive and brash Crétier against the calculated accountant Almanza, something of a corporate journeyman. And so far, Crétier hasn’t held back. The billionaire former baseball umpire has attacked Almanza’s turnaround effort and the £20m he has pocketed in pay since 2013, when he was drafted in to pick up the pieces of a botched takeover bid for Danish rival ISS and the London Olympics fiasco. Crétier says G4S is a “disaster about to happen” and that its bosses are “totally incompetent and unfit to run an important people business like this”.
When Almanza and co responded to the bid by promising shareholders the company was turning the corner, GardaWorld shot back: “After seven years, management’s turnaround strategy is still only at an inflection point. What have they been doing all this time? ... The G4S leadership team has presided over a catastrophic loss of faith and reputation.”
But in his first profile interview, Almanza refuses to rise to the bait. “It doesn’t bother me at all, the personal attacks. We’ve not responded, that’s just not our style. They choose to play the game the way that suits them and we do it our way. And it doesn’t bother me at all,” he says coolly, the hint of a South African accent still present. Does he take responsibility for the poor share price performance? “No, I wouldn’t agree with their commentary,” Almanza says. “I think proper analysis shows it to be quite different. UK equities as a whole are at a historic low relative to global equities. You can look at the UK market and our share price and you can see from February 20, the market started to go into decline — all markets — in the face of the pandemic.”
I point out that the share price had been on the wane since 2017. Almanza isn’t having it. He simultaneously manages to claim credit for the record share price under his watch until 2017 — 337p — while shifting the blame for its subsequent demise quicker than a G4S security guard can shout “Stop!”. “Under the current board and management, the share price of this company has been to an all-time high in the company’s history in 2017 — well above the levels in 2013,” he says.
“The onerous [outsourcing] contracts were all in place before 2013, so you can come to your own conclusion about whether the share price properly reflected all of those legacy issues. The fact of the matter is we had to reveal and resolve those issues and naturally that did have an effect on the share price.”
G4S shares stood at 246p when Almanza took over in 2013. The price sank to 200p before the pandemic hit, then tumbled under 100p. The bid excitement has helped it recover to 204.1p — above Garda’s 190p offer, suggesting investors think a higher offer from Garda or a rival bid from America’s Allied Universal is coming.
Born to an Irish-Italian father who worked as an engineer on the sugar estates, and a French mother, Almanza, 57, followed his two older brothers to Europe in 1990. After an MBA at London Business School, he joined British Gas in 1993 as a finance manager in the exploration and production arm.
He worked on the complex break-up that led to the formation of gas giant BG Group, where he was appointed head of finance in 2002. He became finance director and then executive vice-president before leaving in 2013 to join G4S as chief financial officer, with a succession plan already in mind. Within days, he replaced Nick Buckles, the floppy-haired, marathon-running chief who became the poster boy for botched outsourcing jobs after the Olympics security fiasco in 2012, when the army had to be drafted in to protect athletes and the public.
In 2013, Almanza was faced with sweeping up another Buckles mess when it emerged that G4S and Serco had been overcharging taxpayers for fitting prisoners with electronic tags. In some cases, the Ministry of Justice was paying to track offenders who were dead. After a long-running probe, G4S was fined £44m by the Serious Fraud Office last July in an agreement that saw it avoid prosecution.
Almanza says that in the outsourcing boom under New Labour, which opened the floodgates for huge contracts, G4S — and the industry — lost its way. “The industry pursued growth above all else and were rewarded for it in the stock market,” he says. “It became very much a game of pursuing the next big contract regardless of the risk or the reward. And I think that inevitably led to things going wrong, caused some companies to go out of business and some to go back to shareholders to recapitalise. So it all caught up between 2012 and 2017, a period where all those chickens came home to roost.”
He continues: “I think, temporarily, in the dash for growth, we lost the DNA and the soul of the company.”
G4S traces its roots to 1901 in Copenhagen. It grew through a series of mergers, culminating in a tie-up between Denmark’s Group 4 Falck and Britain’s Securicor in 2004 to form G4S. Earlier this year, G4S sold the bulk of its cash-handling business, returning its focus to security. It still employs 558,000 people around the world, generating £7.8bn in revenues last year.
The government trusts G4S enough to start handing it contracts again. The company has been managing Covid testing sites across the UK, which have so far avoided going the way of the test and trace debacle, managed by rival Serco. Almanza points out that, along with his repair job, G4S has paid out £1.2bn to shareholders — something Garda has conveniently omitted from its attacks. He is also correct to point out improving performance, with 10% growth in North America, and other major markets.
Almanza’s turnaround plan is not what you would call the classic defence strategy. No one could accuse him of being overly exciting. There is no special dividend to entice shareholders — nor does he have any bold acquisition ambitions.
“Our proposition is, you’ve invested in this turnaround and you’re on the point of reaping the rewards of that investment. Why should you hand that on the cheap to somebody else? They [Garda] have figured it out that the heavy lifting’s been done and this company has got an enviable position in the global security market — not just an enviable position, but a position that’s likely to generate a lot of cash flow. I think shareholders see that.”
Yet some of G4S’s top investors, including Schroders, Harris Associates and activist Sachem Head, have all said they are open to a deal at a higher price. Almanza says that as investment managers they have a duty to listen to all offers. As chief executive, does he also have that duty? And if so, what’s his price? “I do. I’m clearly not going to give you a price,” Almanza smiles.
“The board is not trying to sell this company, I’m not trying to sell this company. My job is to lead the management team and execute the strategy. The business is clearly starting to perform.”N Almanza says that Garda needs G4S’s more solid balance sheet for its global assault: “They can’t finance this acquisition on their cash flows and their balance sheet. It just can’t be done.N“They can finance it on our shareholders’ balance sheet and our shareholders’ cash flow. We just disagree with their thesis completely.
“G4S is a far, far superior company on any dimension — size, scale.”
The life of Ashley Almanza
Born: March 27, 1963, in Zululand, South Africa
Status: married to Gillian, three sons
School: Durban High, in South Africa
University: Natal (read commerce) and London Business School
First job: security officer
Pay: £1.5m last year
Home: Surrey
Car: BMW hybrid
Favourite book: First Light, by Geoffrey Wellum
Film: The Shawshank Redemption
Music: Ella Fitzgerald
Gadget: Fitbit
Charity: organisations in the UK and Africa that look after children and the homeless
Last holiday: Isle of Wight
Working day
If he is not travelling, the chief executive of G4S gets up at 6am so he can speak to colleagues in Asia. Ashley Almanza then travels to head office in Victoria, central London, where he spends most of his day dealing with the security giant’s customers and operations, although he always makes time for lunch — usually a working one.
Almanza tries to fit in a walk or run each day, though that is not always possible.
Downtime
Almanza loves playing golf with his sons, running, and watching Liverpool games on catch-up (his family all support different football teams).
