Upbeat trading at G4S despite Olympic fiasco

SECURITY group G4S yesterday said trading was upbeat as its core UK market showed an improved performance, in spite of the bungled Olympics contract that cost the firm £50m.

Revenue grew 6.3 per cent over the nine months to September, while growth in developing markets hit nine per cent over the first nine months of 2012, and four per cent in developed markets.

Its secure solutions division, which provides security to public and private companies, grew six per cent over the period, flattered by strong performance in developing markets, UK government and US commercial businesses. G4S said it sustained an 11 per cent drop in US government work over the period.

The world’s largest security group said that it expected the US government and European markets to remain challenging, although the developing markets business – which accounts for more than a third of profits – would continue to perform strongly.

G4S, which was heavily criticised for failing to deliver on its Olympic contract earlier this year, has been rocked by the fiasco that caused several heads to roll.

Fears have also been raised that future contracts with the government – its biggest client, contributing half of G4S’s British revenue – may also be jeopardised.

The government is due to award a string of contracts to run UK prisons in the coming weeks. A successful G4S bid would highlight that the government is willing to work with the security firm going forward.

Shares closed up 3.53 per cent yesterday at 270p.