Business

Security firm G4S back in profit but more work needed

British soldiers walk through the Olympic Park with the Olympic Stadium Image copyright Reuters
Image caption G4S was criticised after the government was forced to draft in members of the armed forces to provide additional security during the Olympics in 2012

Security firm G4S has reported a pre-tax profit of £85m for the six months to the end of June, compared with a loss of £94m a year earlier.

The scandal hit firm benefitted from strong demand in emerging markets and a return to growth in North America .

But chief executive Ashley Almanza, said there remains "much to be done" to restore performance at the firm.

G4S was banned from UK government contracts after it emerged it charged too much for electronic prisoner tags.

The Serious Fraud Office is examining G4S and outsourcing firm Serco over the contracts.

G4S was also severely criticised after it failed to recruit and train enough security staff for venues during the 2012 Olympics, forcing the government to draft in the UK Armed forces to provide additional security.

Renewal

In April, G4S was allowed to bid for government business again after it agreed to repay £109m following the overcharging row.

It subsequently won a Department for Work & Pensions (DWP) contract to manage community work placements for the long term unemployed.

In total the security and outsourcing firm won £1.2bn worth of contracts in the first half of the year.

G4S said the loss of the electronic tags contract was partially offset by improved performance in its secure cash delivery vans service.

The firm added its failures in the UK had led to a "corporate renewal programme" with the aim of changing and strengthening governance and performance within the group as a whole.

It said revenue grew 4.1% to £3.37bn in the first half of the year, compared with £3.23bn a year earlier.

It also sold six businesses and closed another 15 smaller firms as part of an ongoing portfolio review.

Emerging markets

Shares in G4S were 0.5% higher in early trade on the London Stock Exchange to 261.10p

Revenue grew by 4.2% in North America reflecting what G4S said was "strong performance" in its commercial security, compliance and investigations and electronic monitoring units.

In Latin America revenue grew 12.8% to £325m following a number of contract wins in the ports, car manufacturing, transportation, financial services, telecommunications and raw material extracting industries.

On Tuesday, fellow security and outsourcing firm Serco reported a loss after "poor trading" in the first half of the year.

Reorganising costs and loss-making contracts led to a reported pre-tax loss of £7.3m, a fall of 107% from last year.

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