Friday 22 November 2019

Security firm G4S to lose £70m on London Olympics contract

G4S Chief Executive Nick Buckles
G4S Chief Executive Nick Buckles

Neil Maidment

BRITISH security firm G4S will post a £70m (€81m) loss on the contract after finally agreeing a settlement with the Games organisers.

The world's biggest security firm revealed just weeks before the Games began that it could not provide 10,400 guards, forcing the government to call on military and police personnel to cover the shortfall.

G4S, which was hauled before British lawmakers to explain the debacle and shed two executives after an internal report into the affair, had estimated the loss on the contract, worth around £240m, to be around £50m. It incurred penalties, waived a large chunk of its management fee and paid emergency staff that were drafted in.

"The UK Government is an important customer for the group and we felt that it was in all of our interests to bring this matter to a close in an equitable and professional manner without the need for lengthy legal proceedings," G4S Chief Executive Nick Buckles said on Tuesday.

The group said it had incurred additional costs of approximately £11m relating to charitable donations and external fees and a further £7m relating to the cost of sponsorship and marketing. All of these costs would be taken in the 2012 accounts as an exceptional charge, it said.

Shares in the FTSE 100-listed firm were down 0.5 percent to 278.9 pence at 0811 GMT.

The shares have gained 10 percent over the last three months as G4S, which operates in over 125 countries, has shown signs recovering from the blow to its reputation. It has won electronic tagging work at home and abroad and being appointed on a contact centre services framework for Britain's Department for Work and Pensions.

Earlier this month the group's new UK CEO Richard Morris told Reuters it was regaining customers' confidence and had been boosted by assurances across government - including its core Ministry of Justice client - that if it has the best bid, it would win future contracts.

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