Olympics security fiasco pushes down G4S profits
Security contractor G4S has counted the cost of last year’s Olympics fiasco after seeing annual profits drop by 32 per cent to £175 million.
The company, which is the largest employer on the London Stock Exchange with 620,000 staff in 125 countries, took a £91m hit on the Games project after it failed to provide all of its 10,400 contracted guards.
Stripping out the contract blow and restructuring costs of £45m from more than 1,000 job cuts in developing markets, G4S said underlying profits rose by 6 per cent to £516m in the year to 31 December.
Its reputation took a hammering after the botched London Olympics contract, when the group only fulfilled 83 per cent of contracted shifts. The fiasco led to the resignation of two senior directors.
However, chief executive Nick Buckles said the underlying business performed well in 2012, with organic turnover growth of 7 per cent largely due to a number of new North American commercial and UK government contracts.
He added: “Our market-leading businesses, broad customer base and £3.5 billion a year contract pipeline give us confidence in the outlook for the group.”
While its UK government businesses performed “extremely strongly”, the company said it would be hard to maintain such high growth this year.