G4S will make estimated £50m loss on Olympic contract

G4S has posted its half yearly results and says that it will make an estimated £50 million loss on its Olympic and Paralympic Games contract. Excluding its London 2012 contract, the security company has reported a sales increase of 5.8 per cent and turnover of £3,903 million – it also reports a gross profit of £710 million for the first half of the year even after its Olympic loss.

In a statement, G4S has said that its Olympic contract is currently under review and is expected to be completed in the second half of September.

Nick Buckles, chief executive officer, G4S, commented: “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 said that it had “around 8,000 people on the ground at Olympic venues during the peak periods” and, that “in many cases, military personnel were able to withdraw from specific sites and reduce the overall number of deployed military personnel across the venues”.

The statement read: “We were deeply disappointed that on July 11 we had to advise the customer that we would not be able to assure the delivery of the workforce against the demand requirements and the decision was taken by the UK Home Office to deploy additional military to augment the security workforce numbers. To date, we have delivered 83 per cent of the contracted shifts since the beginning of the year and expect to fully resource the contract between now and the end of its term.

“The Paralympic Games begin on August 29 and we continue to work with our partners to ensure that the Games are safe and secure. We are confident that we have an assured security workforce for the Paralympic Games and do not anticipate any workforce shortfall issues to arise.

PricewaterhouseCoopers is helping the G4S board review the London 2012 contract including the actual contract performance and why failures were not identified sooner. The £50 million loss that has been provided for at the half year and taken as an exceptional item is an estimate, as G4S says there are still uncertainties as to exactly how much the additional costs of deploying military and police will come to.