New deals help scandal-hit G4S to bounce back
The world’s biggest security firm, G4S, has bounced back from two years of Olympic failures and contract scandals, returning to the black with an £85m first-half profit.
Signing new deals worth £1.2bn – including contracts to clear landmines in South Sudan and in Iraq – enabled G4S to turn around. But its chief executive Ashley Almanza warned that there was still “much to be done” to overhaul the business.
G4S had to repay nearly £110m to the taxpayer in March, after over-charging the state for tagging criminals who were dead, imprisoned or did not exist. The company, which employs almost 620,000 staff in 120 countries, is still under investigation by the Serious Fraud Office, although the Government lifted its ban on G4S winning new state contracts in April.
Still, the impact of that blacklisting, the loss of the tagging contract, plus a reputational hit in this country saw G4S’s revenues in the UK decline by 2 per cent to £790m in the first six months of the year.
Yet the company pointed out that it had since won a deal from the Department for Work & Pensions to manage community work placements for the long-term unemployed, and said it wants to “grow the business by competing for new government services”.
G4S is still hunting for a permanent boss for its UK business, after Eddie Aston quit in May. Mr Almanza said G4S had sold six divisions in the past year and decided to discontinue 15 more, largely loss-making, small businesses.
It is also in talks to sell its US Government Solutions business, which has just been awarded a $24m (£14m) contract to run facilities at the US Navy’s Guantanamo Bay base. A spokesman said it is up for sale because, as a non-American company, “the US Government prohibits G4S in having any control or influence over the business”.
Its shares rose 13.7p to 273.5p, leaving them at their highest level since May 2013 when a profit warning saw its stock dive nearly 15 per cent from 305.5p.
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