G4S annual profits fall as Olympic costs bite

SECURITY group G4S continued to count the cost of the bungled Olympics contract yesterday, as annual profits slumped by a third.

Pre-tax profit fell 32 per cent to £175m over the year, down from £257m in 2011, as costs from the Olympic contract debacle bit.

The blue chip firm is still reeling from the failed Games contract, when it admitted just weeks before the competition started last summer that it could not provide the promised number of security personnel.

With regards to the contract, G4S booked an £88m exceptional charge in its 2012 accounts.

Despite the marked slump in profits, a strong performance came from developing markets, which accounted for 33 per cent of group revenue last year. G4S is targeting 50 per cent of its revenues to come from emerging economies by 2019.

The security firm was also flattered by new government contracts, as it started around £200m worth of work in 2012.

“The breadth of our portfolio in over 125 countries continues to present many new growth opportunities and we continue to see good opportunities for outsourcing in key sectors such as government, financial institutions, aviation, oil and gas, mining and ports,” chief executive Nick Buckles said yesterday.

Shares closed down 2.47 per cent at 299.9p yesterday as investors reacted negatively to the drop in profits.