G4S admits £50m Olympics loss
G4S, the firm behind the Olympics security fiasco, admits that its loss on the contract will be in the region of £50m.
G4S is conducting an internal review after its failure to provide all of the 10,400 contracted guards for London 2012 forced the government to step in with military personnel.
The group said it had delivered 83 per cent of contracted shifts and that it was confident the Paralympic Games – starting tomorrow – would be fully staffed with a security workforce.
Its half-year results revealed a significant drop in pre-tax profits to £61m from £151m a year earlier, although profits were held flat on an underlying basis after sales increased 5.8 per cent to £3.9bn.
There had been fears that the Olympics contract issues would hurt the group’s prospects for future government work.
Chief Executive Nick Buckles confirmed that the resources G4S had put into sorting out the debacle meant it withdrew from bidding for a Department for Work and Pensions contract worth £20m a year.
But he said no contracts had been lost as a result of the Olympics deal woes and insisted the group would continue to play a “major role” in the public sector, with an overall £3.8bn-a-year contract pipeline.
Read more: From cheers to jeers - chronology of the G4S cock-up
‘Deeply disappointed’
He said: “We were deeply disappointed that we had significant issues with the London 2012 Olympics contract and are very grateful to the military and the police for their support in helping us to deliver a safe and secure Games.”
He added: “Clearly it is a big setback and we need to rebuild the brand over the coming months and years.”
Mr Buckles has been left fighting to save his career after the debacle and an intense grilling by MPs which saw him agree that it had been a “humiliating shambles”.
He is preparing for a second appearance in front of MPs on the Olympics contract next month, while the results of the internal review are due towards the end of September.
G4S – the largest employer on the London Stock Exchange with more than 650,000 staff worldwide – also announced 1,100 job cuts as part of a restructuring programme started in December.
Most of the cuts have been made across continental Europe and developing markets, with fewer than 100 roles axed in the UK.