G4S misses profit forecasts, hit by tagging charges
Published 12/03/2014 | 09:37
Security firm G4S missed annual profit forecasts today and took a raft of heavy charges related to restructuring and a troubled British tagging contract that has further hit its reputation.
The world's biggest security group posted a 2.8pc rise in 2013 underlying operating profit on restated 2012 figures to £442m, missing analyst forecasts of £455m, due to lower revenues in Europe and the US.
Taking into account £386m of charges, including a £136mn pound pre-tax charge following a review of its contracts which is mostly related to a repayment of its deal to tag UK offenders, group operating profits plummeted 85pc to £56m.
After a disastrous 2012, in which it failed to provide enough guards for the London Olympics, G4S's attempts to restore its reputation have been undermined by more woe in 2013, the most notable being a ban on winning new British government work after it was found to have overcharged on a contract to tag offenders.
Talks between the government and G4S to agree a repayment fee have dragged on for months and the firm said on Wednesday they continued to engage with ministers. Analysts have said an agreement will be needed before the government can consider lifting its ban.
The scandal also remains the focus of an investigation by the Serious Fraud Office, adding to G4S headaches which include problems overseas. The firm has had unrest at a prison in South Africa and faces an investigation by the Australian government into deadly clashes at an immigration detention centre in Papua New Guinea where it provided security.
Shares in the firm, which runs services from cash transportation and airport security to guarding tennis players at Wimbledon, were down 2.8pc to 238.6p in early trade.