G4S takes £50m hit over Games security debacle
Security firm G4S, which employs 1,600 people in Northern Ireland, has admitted that it is fighting to repair its battered reputation as it wrote off £50m in losses on its bungled London 2012 contract.
It fulfilled 83% of contracted shifts at the Games, failing to provide all of the 10,400 contracted guards and forcing the Government to step in with military personnel.
G4S, which has already ruled itself out of bidding for the Rio 2016 Olympics security contracts, said it is confident that the Paralympic Games, starting today, will be fully staffed with a security workforce.
The company is conducting an internal review after the Olympics debacle which saw troops plug a shortfall left by G4S just weeks before the event started. It has major contracts in Northern Ireland including a £1m deal with Translink and a £800,000 contract with Belfast City Council.
Chief executive Nick Buckles said: "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.
"Clearly it is a big setback and we need to rebuild the brand over the coming months and years."
The £50m expected loss on the Games contract is at the upper end of what the firm initial expected. G4S said the final amount could be higher because of contract penalties and with the actual cost to the Government of providing military personnel yet to be calculated.
The Government put another 4,700 personnel on standby, on top of 13,500 initially committed, after G4S admitted its shortfall in July. G4S said not all of these were used as it provided nearly 8,000 staff for the Games.
The £50m hit contributed to a drop in half-year, pre-tax profits to £61m from £151m a year earlier, although underlying profits were the same as last year at £236m as sales increased 5.8% to £3.9bn.
Mr Buckles said no G4S contracts were lost after the bungled Olympics contract and insisted that the group will continue to play a major role in the public sector, with an overall £3.8bn-a-year contract pipeline.
But he confirmed that the resources G4S put into sorting out the Games debacle meant it withdrew from bidding for a Department for Work and Pensions contract worth £20m a year.
Mr Buckles is battling to save his career after the contract problems and a high-profile mauling by MPs, which left him agreeing that the Games staffing episode was a "humiliating shambles".
Reports in recent days suggest he has the support of major shareholders. He said: "I hope I keep my job. I have been with the company for 28 years and during the last 10 years as chief executive."
He is preparing for a second appearance in front of MPs on the Olympics contract next month, while the results of the internal review are due towards the end of September.