G4S takes £50m hit from Olympics contract fiasco

City A.M. Reporter
Security firm G4S, at the centre of a political and media storm over its failure to provide enough guards for the London Olympics, said the fiasco would cost it £50m and it was fighting to rebuild its reputation.

Under-fire boss Nick Buckles, hauled before MPs last month to explain why troops had to be drafted in to fill the shortfall, pledged today there would be no repeat problems at the Paralympic Games, starting on Wednesday.

He also said there were no signs the company was losing contracts or not winning new ones and that, with £3.8bn of work each year in its pipeline, it should bounce back.

However, not all analysts were convinced, pointing to the company's decision to freeze its interim dividend, and G4S shares were down over 2 per cent in morning trade.

"The unchanged interim dividend suggests some caution from management, especially with a number of key government contract decisions coming up during H2 2012," said Panmure Gordon’s Mike Allen.

Over half of G4S's British revenue comes from government contracts, with more than 20 per cent of its pipeline also stemming from that market, including deals to run prisons and some police services due later this year.