G4S still secure despite Olympic fiasco

SECURITY firm G4S, which supplies the private sector management of Birmingham’s Winson Green prison, has seen its revenue grow by 6.3% in the first nine months of the year – despite the fiasco over the Olympic Games.

G4S said that for the nine months to September 20, 2012 revenues grew by 6.3% at constant exchange rates and 4.1% at actual exchange rates, compared with the same period last year.

Including the London 2012 contract, revenues grew by 9.2% at constant rates and by 6.9% at actual exchange rates. Group operating margin was lower compared to the same period in 2011.
 
Overall organic growth was 5.5% (8% including the London 2012 contract), with 9% in developing markets and 4% in developed markets.

The group reiterated that the loss on the Olympic contract – due to its failure to provide sufficient security staff – is likely to be around £50m.

In a trading update it said: “The business has continued to achieve good underlying organic growth despite some adverse moves in foreign exchange and challenging macro conditions.

“The US government market and some Continental European markets are still proving to be difficult and we expect these trends to continue. The North American commercial businesses are continuing to perform strongly and the UK has shown an improved performance.  Our developing markets businesses, which account for more than a third of group profits, continue to achieve strong results.

“Our restructuring measures taken in 2012 to reduce overhead costs and continued focus on business improvement should help margins improve in 2013.”