Thursday newspaper share tips: G4S, Paysafe

G4S’s new chief appears to be making progress in cleaning the business and growing it again, selling unwanted subsidiaries and safeguarding the dividend, The Times’s Tempus said.

Investors need look no further than its latest interim results, which came in ahead of forecasts, with net debt down a smidgen and the dividend maintained as well.

Significantly, revenue growth was up in all regions, driving a “respectable pick-up” in underlying profits before debt interest.

Indeed, if one were to strip out the businesses which have been earmarked for sale or closure – and if you throw in its toxic ‘legacy’ contracts – then the remainder of the group is progressing well.

Nevertheless, the disposal plan still has a long way to go and mopping up after his predecessor, which locked-up the company into many unprofitable contracts, will take G4S boss Ashley Almanza some time.

To take note of, Almanza has taken the decision to reign-in its managers, giving them less freedom to take decisions based on overly-optimistic assumptions.

He also stuck to his promise to further cut leverage, to 2.5 times earnings in 18 months’ time.

“Buy”, Tempus said.

Paysafe might not ring a bell with many stockmarket watchers, because of its frequent name changes.

However, the company has thrived within the rich eco-system of online payments and electronic wallets, catering in particular to the needs of online gamblers and party-selling organisations, Tempus said.

That area has been shuned by its bigger rivals.

Guidance was again pushed higher at the interim stage, thanks to very strong demand for electronic wallet services and it is looking to set up a platform for merchants' orders and payments.

It has also proved adept at scooping up rivals in a fast-consolidating sector and may yet turn into a bid target itself.

So despite the challenging regulatory landscape and inevitable operational risks the stock is a "buy", according to Tempus.