Member Article

G4S report Olympic £50m loss

G4S security firm has admitted a £50m loss on their contract from the Olympic Games in its interim results on Tuesday morning, after the company was unable to fulfil demand for staff at the event.

Results that exclude the Olympic loss remained strong however, and turnover increased by 5.9% to £3.9bn and sales were up 5.8%, while PBITA remained at £236m by fell by 1.7% at actual exchange rates.

Restructuring costs of £24m were reported, while 1,100 jobs were cut during the year as part of changes in the firm.

Profit from operations before interest and taxation (PBIT) decreased by just over 40%, from £196m in the first half of 2011 to £115m in the 6 months up to 30th June this year.

Pre-tax profit fell to £61m by 59% down from £151m from the same period in the previous year.

With regards to the failure of the Olympic Games contract, the half yearly report referred to the model as a “unique and complex contract”.

G4S’s statement said it was “disappointed that we were unable to deliver fully contracted security workforce numbers for the Olympic Games” and the company said it “expects to over-deliver throughout the Paralympic Games.”

In a statement, Nick Buckles, Chief Executive of G4S commented: “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.

“Underlying organic growth in the first half has improved to over 5% overall driven by a strong performance in developing markets which grew by over 10%.

“We continue to see good opportunities from outsourcing around the world particularly from governments looking to improve quality of services and reduce costs and we believe that, with our long-term track record, we will continue to play a major role in this sector.

“The breadth of our portfolio in 125 countries continues to present many new growth opportunities. Our market leading businesses, broad customer base and £3.8bn per annum contract pipeline give us confidence in the outlook for the Group.”

Despite a challenging economic climate in Europe in particular, and weakness in the U.S. government market, the security outfit said the business had performed well overall.

This was posted in Bdaily's Members' News section by Miranda Dobson .