"Margins are unchanged from last year due to start-up costs in new contracts that are balancing margin improvements in existing jobs," Jyske said, maintaining its "Accumulate" rating on G4S shares.

G4S Chief Executive Nick Buckles told a conference call G4S was typically able to pass on rising wage costs in its different markets and segments to its customers and had managed to maintain margins despite economic difficulties in a number of markets.

COUNTER-CYCLICAL

Some analysts have speculated the businesses of G4S and Swedish competitor Securitas could be hit by the global economic downturn as customers in a number of markets try to cut costs by scaling down guarding services.

But Buckles said he did not believe G4S’s business was cyclical and was in some ways counter-cyclical.

"It really depends on the severity of a recession, but in a normal, slight downturn of GDP growth we really don’t believe it affects our business," he said.

Buckles said that in the U.S., G4S had now found it easier to recruit staff which meant that overtime costs were down and margins could be improved.

G4S shares are priced at about 13 times estimated 2008 earnings, according to Reuters data, while Securitas is trading at 14 times this year’s profits.

Organic turnover growth for G4S was 10.5 percent, the group said, with all regions and business segments showing good performance while the operating margin was maintained at 6.5 percent.

Buckles said trading was ahead of where G4S had expected it to be at the half year and said he remained very confident for the remainder of 2008.

He said the group saw strong potential for further acquisitions with all of the potential deals in its pipeline in the smaller, under 50 million pound deal range, with the majority of targets outside Europe and North America.

West Sussex-based G4S was formed in 2004 through a merger between Denmark’s Group 4 Falck A/S’s security business and Securicor.

(Reporting by Kim McLaughlin; editing by Sue Thomas and Chris Wickham)