G4S takes £70m hit for Olympic contract

Security firm G4S this morning said it had agreed a £70m loss on the Olympic contract after reaching a settlement with Games organisers.

G4S was rocked last year when just weeks before the London Games it admitted it could not recruit the necessary 10,400 security staff needed, and an extra 4,700 military troops had to be called in to make up the shortfall.

It had previously estimated the loss on the contract to be around £50m.

The blue chip security firm said this morning it had incurred further costs of around £11m for donations to charity, and a further £7m relating to the cost of sponsorship and marketing. These costs will be taken as an exceptional charge in the 2012 accounts.

"We have accepted responsibility for the security workforce issues and, as a result of the settlement terms which we have announced today, have ensured that the overall cost to the taxpayer has been reduced significantly against the planned cost," chief executive Nick Buckles said today.

"The UK government is an important customer for the group and we felt that it was in all of our interests to bring this matter to a close in an equitable and professional manner without the need for lengthy legal proceedings."