G4S Reveal £50 million Cost for London 2012 Security Fiasco
By Community | August 28, 2012
Security firm G4S, who’s public security failings at the London Olympics, said the fiasco would cost it £50 million ($79.1m) 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 on Tuesday 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 3.8 billion pounds of work per 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 percent 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’s Mike Allen.
Over half of G4S’s British revenue comes from government contracts, with more than 20 percent of its pipeline also stemming from that market, including deals to run prisons and some police services due later this year.
The firm said 50 million pounds was its estimate for the cost of paying military and police personnel drafted in to cover the shortfall in guards, as well as potential penalties and liabilities.
G4S managed to provide 7,800 staff for the Olympic Games at peak times, compared with a promised 10,400.