G4S confirms £50 million loss on Olympic deal

28 August 2012

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28 August 2012 | Adam Leach

The world’s largest security provider G4S has confirmed failing to meet its obligations to provide security for the London 2012 Olympic Games has cost the firm £50 million.

In the company's half-year results announced today, G4S identified the cost as an exceptional item of £50 million and announced it had launched a review into its failings. For the first six months of the year pre-tax profits tumbled to £61 million compared with £151 million in the same period of 2011.

On the Olympics contract, the company reported it had “delivered 83 per cent of the contracted shifts since the beginning of the year”. It said it expects to fully resource the remainder of the contract and predicts no shortfalls during the Paralympic Games, which start this week. “We are confident that we have an assured security workforce for the Paralympic Games and do not anticipate any workforce shortfall issues to arise,” it said.

G4S chief executive Nick Buckles thanked the military and the police for filling in when the company was not able to provide services. A combination of volunteers, servicemen and policemen were called in by Games organisers when on 15 July G4S announced it would not be able to provide the required number of guards. “We were deeply disappointed 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 said in a statement.

The company has also confirmed it won’t be bidding to work on the 2016 Olympics in Rio de Janeiro, as the reputational damage from failing to fully deliver is too high, if a similar situation was to arise again.

But the business continues to see a large number of opportunities in the public sector. Buckles said: “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.”

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