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13 March 2013 | Adam Leach
The failure of G4S to meet its contracted obligation to provide 10,700 guards for the London 2012 Olympics cost the company a total of £88 million.
In preliminary results for the year ended 31 December 2012, the world’s largest security provider revealed the total cost of the blunder was £18 million more than previously reported. In addition to the £70 million which it paid to organisers as compensation, its failure to supply resulted an £11 million additional charges for professional services and charitable donations, and extra sponsorship and marketing charges of £7 million.
Nick Buckles, chief executive of G4S, said in a statement: “Despite these issues, the underlying business has performed well in 2012 with an acceleration in organic turnover growth to 7 per cent and with margins holding at over 7 per cent.”
Profits at the global company, due in large part to the Olympic costs, were down to £175 million for the year, compared with £257 million in 2011. The company also absorbed a cost of £45 million during the year for restructuring and reducing headcount by 1,500. It said that annual savings of £35 million would be delivered as a result of the restructuring.
In January, SM reported how G4S turned down an offer to supply fewer security guards for the 2012 games during a re-negotiation of the revised security deal because it was confident it could meet the higher requirement.