Bungled London 2012 deal costs G4S £88m
Tuesday 12 February 2013
G4S today warned that it had racked up an extra £38 million in costs over the Olympic fiasco — but the City said the damage could have been even worse.
The security firm — which failed to provide more than 10,000 staff last summer so that the British military had to be called in to make good the shortfall — has raised its estimates of losses on the £284 million contract from its original £50 million to £70 million after negotiations with organising committee Locog. The company has also paid out an extra £18 million on charitable donations, sponsorships and marketing, including £2.5 million donated to the armed forces as a “goodwill gesture”.
The hit will be taken in last year’s accounts as an exceptional charge, denting profits for the second year in a row after G4S was also forced to abandon a £5.2 billion merger with Danish outsourcing and cleaning giant ISS in 2011.
Chief executive Nick Buckles said that although he was “extremely disappointed” to be in this position, he was pleased “to have concluded these negotiations with Locog”.
But shares rose 1% or 3.1p to 283.4p today as analysts breathed a sigh of relief. Numis analyst Steve Woolf said: “The public disclosure of this amount was always likely to result in a final settlement above the £50 million. It is still below the market’s touted worst-case scenario of around £100 million to £150 million.” Broker Panmure Gordon also said the Olympic nightmare was unlikely to do serious harm to the company’s ability to win work from the Government, adding: “The Ministry of Justice has made it clear that the Olympic contract will not play a role in future decisions, with the quality and price of bids the key driver.
“There is no doubt that the Government has become a tougher customer for all outsourcing companies both in terms of margin and cash payment terms, but the volume of work is likely to increase ahead of the next general election in 2015.”
- 1 Husband creates spreadsheet detailing wife's 'excuses' for turning down sex
- 2 UK pirates will get four warning letters a year
- 3 Saneie Masilela, 9, marries Helen Shabangu, 53 years his senior, for the second time
- 4 Time runs out for Christian Iraq: Isis deadline passes with mass flight
- 5 Why I'm on the brink of burning my Israeli passport
Saneie Masilela, 9, marries Helen Shabangu, 53 years his senior, for the second time
Time runs out for Christian Iraq: Isis deadline passes with mass flight
Miley Cyrus death hoax: Fans distraught after Facebook scam goes viral and she doesn't tweet for three days
Malaysia Airlines MH17 crash: France and Germany accused of going soft on Putin as sanctions talks stall
Israel-Gaza conflict: Deadly flechette shells 'used by Israeli military in Gaza Strip’
Malaysia Airlines flight MH17 crash: 'Nine Britons, 23 Americans and 80 children' feared dead after Boeing passenger jet is 'shot down' near Ukraine-Russia border
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
Malaysia Airlines MH17 crash analysis: A tragic lesson of advanced weapons in the wrong hands
- < Previous
- Next >
iJobs Money & Business
£28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...
£28000 - £32000 per annum: Ashdown Group: Training/Learning and Development Co...
£40000 - £50000 Per Annum: Clearwater People Solutions Ltd: Business Analyst r...
£500 - £550 per day: Orgtel: BA/PM - Client Data London (Greater)