G4S profits boosted by detention centres

Published on Monday 24 August 2009 21:35

SECURITY giant G4S was cheering higher profits yesterday after its UK operation benefited from new contracts to run two immigration detention centres.

The work for the UK Border Agency at Brook House and Tinsley House, both near Gatwick, is expected to generate 10 million and 5m a year over five years for the company. G4S has also had its electronic monitoring contract, worth 40m a year, extended for a further two years.

Its pre-tax profits before exceptional items for the six months to 30 June were 229.8m, an increase of 13.4 per cent on a year earlier.

The firm, formerly known as Group 4 Securicor and one of the world's biggest private-sector employers with close to 600,000 staff, said strong growth in the government sector had helped its secure solutions division improve profits to 180.2m from 133.9m last year. In the company's cash management arm, profits rose to 70.3m from 57.6m after revenues growth of 6.8 per cent. In the UK, the figure rose by only 4 per cent, as a result of fewer services being required by the retail sector.

Overall, turnover was up 12 per cent to 3.5 billion – excluding the impact of acquisitions, the increase was 4.8 per cent.

Stockbroker Panmure Gordon said the results beat expectations at the revenue and underlying profits level, but higher interest costs meant the bottom-line profits figure of 128.6m was slightly below target.