G4S lost £50m and suffered 60% profit dip due to Games problems

Olympic Games' security contractor G4S lost up to £50m as a result of its bungled Olympics contract and has suffered a 60% dip in its pre-tax profits in the first six months of 2012.

G4S lost £50m and suffered 60% profit dip due to Games problems
G4S lost £50m and suffered 60% profit dip due to Games problems
For the six months to 30 June, G4S confirmed that its current estimate of the impact of the Games contract – which includes paying for the deployment of soldiers – will be at the upper end of an initial £35m-£50m estimate.

G4S chief executive Nick Buckles, who faced a grilling from MPs before the Games, 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."

G4S also reported pre-tax profits of £61m for first six months of 2012, down from £151m in the same period in 2011. 

The profit drop was largely accounted for by the £50m Olympics loss and £24m in restructuring costs, which includes cutting 1,110 jobs from the group's 657,000 strong global workforce, with the majority of losses occurring outside the UK.

Excluding the Olympic Games contract, G4S reported that sales were up 5.8% for the first half of 2012 with improved organic growth of 5.1%.

G4S was criticised for mishandling its duties after the army were called in after it only provided 7,800 of the required 10,400 guards. As a result of the controversy, the firm cancelled its corporate hospitality during Games-time.

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