Olympic Contract Fiasco Costs G4S £50m
Security provider G4S says the security fiasco surrounding its Olympic and Paralympic
contract has cost it £50m.
The company reported a 59% fall in pre-tax profit to £61m in the six months to the end
of June 2012 - down from £151m over the same period last year.
G4S faced intense criticism after it failed to meet its £284m contract to provide 10,400
staff for London 2012 and thousands of military personnel had to be called in.
It has donated £2.5m to the Armed Forces after around 18,000 troops provided support
at the Games, including Army, Royal Navy and Royal Air Force staff.
The company said it had delivered 83% of its contracted shifts so far, but was confident
the Paralympic Games - starting on Wednesday - would be fully staffed.
The £50m set aside is an estimate, and takes into account the cost of military and
police deployment and contractual penalties, the company said.
G4S has begun an internal review into the contract failure, with the findings due to be
made public towards the end of September.
Chief executive Nick Buckles said: "We are 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."
The company, which employs more than 650,000 people, also said restructuring will
result in the reduction of 1,100 jobs - fewer than 100 of which will be in the UK.
Some investors had feared the Olympic contract problems would hurt the
group's prospects for Government work looking ahead.
Mr Buckles confirmed the costs involved in sorting out the debacle meant the company
withdrew from bidding for a Department for Work and Pensions contract worth £20m a
But he added no contracts had been lost as a result of the Olympic deal and insisted
the company would continue to play a "major role" in the public sector.
G4S' share price fell 2% to 260p after the results were announced.