G4S loses £50 million in London 2012 Olympics security fiasco

Written on:August 28, 2012
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Nick Buckles

“Humiliating shambles” leads to £50 million loss for G4S

Failure to fulfil its contract for London 2012 Olympics has weighed down on G4S, the world’s biggest security company, as it reported a £50 million contract loss.

The £50 million loss contributed significantly to the 60% drop in the first half pre-tax profit which fell to £61 million year-on-year. The company reported that total revenue for six months to June 30 increased 5.9% to £3.9 billion.

In July, G4S had admitted to have been unable to provide 10, 400 security personnel for the London 2012 Olympics, that it was contracted to supply. The shortfall in staff forced the government to call in military personnel to do the job, jeopardising G4S CEO Nick Buckles’ career. Buckles had admitted before the MPs inquiry committee that the affair had been a “humiliating shambles.”

“We were 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”, Buckles said. He added that the group is well prepared for the Paralympic Games which begin this week, disclosing that the company will provide 5,00 security guards for the upcoming games.

Buckles has the support of shareholders and investors in spite of the Olympics security fiasco probably owing to the fact that he has delivered annualised shareholder returns of 14% since he became chief executive in 2005.

G4S, which provides services including prison management, cash-guarding and events security, said that there are more contracts to come up in the UK. It has recently won its first contract to build and run a police station in Lincolnshire.

     

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