Olympics fiasco to cost G4S total £88m
Published 13/02/2013 | 04:20
G4S IS to take a bigger-than-expected £70m hit on its contract for the 2012 Olympics and Paralympics, the security giant said.
The loss, which compares with its previous estimate of £50m, follows months of negotiations with Games organisers Locog.
The group also incurred additional costs of around £18m relating to charitable donations, fees and the cost of sponsorship and marketing.
Chief executive Nick Buckles said: "The UK Government is an important customer for the group and we felt that it was in all of our interests to bring this matter to a close in an equitable and professional manner without the need for lengthy legal proceedings."
The two sides have been in talks over a final settlement for the £240m security contract after G4S failed to provide all of its 10,400 contracted guards.
The shortfall left the Government with no choice but to call in the Army.
Two G4S directors resigned in the wake of an independent review into the company's botched London Olympics contract, when the group only fulfilled 83% of contracted shifts.
Chief operating officer David Taylor-Smith and Ian Horseman Sewell, who was head of global events, carried the can for the fiasco, but Mr Buckles stayed in his post.
Caroline de La Soujeole, an analyst at Cantor Fitzgerald Research, said the total cost of £88m was better than her estimate of between £100m and £110m.
She added: "In our view this draws a line under the Olympics situation and will enable the company to win more Government outsourcing contracts."