Advertisement

G4S to incur 70m pounds for Olympics debacle

Security outsourcing group G4S will incur an overall loss worth 70m pounds for its mismanaged Olympic Games contract, the company admitted Tuesday.

Security outsourcing group G4S will incur an overall loss worth 70m pounds for its mismanaged Olympic Games contract, the company admitted Tuesday.

The company failed to provide enough personnel to secure the Olympics and Paralympic Games resulting in 5,000 members of the Armed Forces having to be drafted in at short notice.

Advertisement - Article continues below

At the time, two directors resigned, but Nick Buckles - the Chief Executive Officer of G4S who described the handling of the contract as "a humiliating shambles" - remained in his job.

G4S has also incurred additional costs of approximately £11m, relating to charitable donations and external fees and a further £7.0m relating to the cost of sponsorship and marketing.

All of the costs will be taken in the 2012 accounts as an exceptional charge, with £50m having been provided for at the half-year based on the previous contract loss estimate.

The main difference between the previous estimate and the final settlement is an agreement to waive a larger proportion of the project management charge.

Commenting on the settlement, Buckles said: "The Olympic and Paralympic Games were a great success for the UK and we would like to reiterate our thanks to the military and the police for their support. We would also like to thank the 16,000 men and women of G4S who played their part in securing the Games despite the challenges faced by the group.

"Whilst we are extremely disappointed to find ourselves in this position, we are pleased to have concluded these negotiations with LOCOG [London Organising Committee of the Olympic Games and Paralympic Games]."

G4S' share price was down 0.46% to 279p at 08:08 on Tuesday morning.

MF

Advertisement
Advertisement

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

OBR: UK house prices could fall by 12% next year
House prices

OBR: UK house prices could fall by 12% next year

The Office for Budget Responsibility says UK house prices could fall by as much as 12% next year. John Stepek looks at how likely that is.
14 Jul 2020
Three ideas for Lloyds Bank's new boss
UK stockmarkets

Three ideas for Lloyds Bank's new boss

The Black Horse needs whipping into shape. A change at the top provides a great opportunity, says Matthew Lynn.
12 Jul 2020
We’re spending more than at any time since World War II – how will we pay it back?
UK Economy

We’re spending more than at any time since World War II – how will we pay it back?

With the UK spending vast sums on stimulus measures, this year’s budget deficit will be greater than at any time since World War II. The big question,…
14 Jul 2020