G4S profit is hit by failed deal with ISS

SECURITY group G4S was one of the biggest losers on the FTSE 100 yesterday after it posted a 17 per cent slump in profits and admitted a £50m hit on its failed merger with a Danish catering firm.

Pre-tax profit fell to £279m for 2011, a turbulent year in which G4S was forced to scrap a £5.2bn tie-up with ISS, which would have created a support services giant with more than 1m staff.

The collapse of the deal left G4S with fees bill of £50m and prompted chief executive Nick Buckles to turn down a bonus.

Yesterday Buckles revealed the £64m acquisition of a facilities services firm in Brazil at the end of last year and vowed to focus on expansion there as well as in India and China. G4S has set aside £200m to buy more companies in security and facilities management.

“Brazil is the fourth-largest security market in the world. We have some capability and a footprint there, but we need to acquire more and that is really our main objective for this year”, Buckles said.

The firm, which also runs prisons, provides cash-guarding services and is the official security provider for the 2012 Olympic Games, posted an operating profit of £531m for the year, £1m ahead of 2010. It said it would pay a final dividend of 5.11 pence to give a total of 8.53p, up eight per cent on the previous year.

Shares closed down 2.07 per cent to 283.5p.