ArmorGroup profits from work in Iraq




By Mark Huband

Financial Times, 18 March 2005

ArmorGroup International, the protective security and training company, yesterday proved the resilience of the global security industry in its maiden results after its successful stock market flotation in December.

The company, which operates in 26 countries, produced revenues for 2004 of $191m (£99m), a 92 per cent increase. Fifty-seven per cent of revenues came from its operations in Iraq.

Pre-tax profit was up from $3.3m to $13.4m and it transformed losses per share of four cents to earnings of 35 cents. No dividend was declared.

Jerry Hoffman, chief executive, said: “2004 was a watershed year for ArmorGroup and we are pleased to deliver an excellent set of full year-results slightly ahead of our expectations at the time of the IPO. The IPO has allowed us to recapitalise our balance sheet and has put us in prime position to pursue the opportunities that we expect to be presented in 2005.”

The company’s success in securing substantial contracts in Iraq, including protecting the British embassy in Baghdad, has been accompanied by a strategy of creating a local joint venture with the Kubba family, a well-connected local group.

This arrangement will enable Armor to bid for contracts with Iraqi government ministries while continuing to benefit from contracts signed with the previous Coalition Provisional Authority.

“The joint venture will give us longevity,” said David Seaton, ArmorGroup chief financial officer.

The company is also discussing the formation of a joint venture to provide security services in Saudi Arabia and is expecting to see growth in Kuwait.

It has expanded the provision of security to British government officials in Afghanistan and has seen growth in other parts of Asia. It is awaiting the results of bids for contracts worldwide worth $191.5m.

Mr Hoffman said: “We are taking a five- to 10-year view of the Middle East region and we have formalised our relations with the UK and US government contracting entities so that we can go after larger contracts.”


© Copyright The Financial Times Ltd 2008.