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LONDON (Reuters) - G4S, the world's biggest security firm, has agreed to sell a business providing security and other services to the U.S. government for $135 million(84.83 million pound), it said on Wednesday, part of a push to cut costs and focus on its most profitable operations.
In a trading update that reported a 4.2 percent increase in nine-month revenues, G4S said it had struck a binding deal with an unnamed party and expected to close the sale of the U.S. operation -- which provides security, fire protection and mine clearance services for the government -- by the end of the year.
Shares in the company rose almost 3 percent in early trade after the announcement, making it the biggest riser in the FTSE 100 Index, as investors welcomed rising revenues and a sale that will help shore up the group's balance sheet.
G4S, which runs services ranging from moving cash to protecting ships, said the U.S. deal comprised $80 million in cash and $55 million in receivables, or money owed by clients but expected to be collected within 18 months of completion.
Under boss Ashley Almanza, G4S has overhauled management after a series of damaging contract blunders and is cutting costs, debt and underperforming businesses across its sprawling empire to feed growth in more profitable emerging markets.
In August, it posted a better-than-expected rise in first-half profit, a sign the improvements were starting to pay off.
Improving slightly on a 4.1 percent revenue rise for the half year, a 4.2 percent rise for the nine months to Sept. 30 was led by emerging markets, where organic revenue was up 11 percent, in line with the firm's expectations.
Developed markets revenue edged 1 percent higher with strong trade in North America offset by declines in the UK and Europe.
G4S said it had won new contracts with annual revenues of over 870 million pounds ($1.4 billion) in the period and that it had a bid pipeline of new work worth 5.1 billion pounds.
(Reporting by Neil Maidment; Editing by Sarah Young and Clara Ferreira Marques)