G4S looks ahead after Games fiasco
G4S has revealed solid sales growth in a sign that the security firm is starting to put its London Olympics security fiasco behind it.
The group left the Government with no choice but to step in with military personnel at the Games after it failed to provide all of its 10,400 contracted guards. But the company said revenues excluding the London 2012 contract rose 6.3% in the nine months to September 30, up from 5.8% growth in the first half of the year.
Looking ahead, the group said it expects growth to improve further as new contract wins in the UK come into effect, including a deal in Scotland to manage the electronic tagging of offenders. The group has also strengthened its portfolio with major contracts in Brazil and a deal to provide security checks at Oslo airport in Norway.
But the big test for the firm will come in the weeks ahead when the British government is expected to award a string of contracts to run prisons.
G4S, which reaffirmed its estimated loss on the Olympics contract at £50 million, is the world's biggest private security company with more than 650,000 staff worldwide.
Two G4S directors resigned in the wake of a review into the company's botched Olympic Games contract but the board decided chief executive Nick Buckles should remain.
G4S will have a clearer view of the government's long-term appetite to work with the firm as six contracts to run nine British prisons are expected to be awarded this week.
The faster growth in the third quarter was evident in developed markets, analysts said, which was driven by UK government contracts, such as with Lincolnshire Police, while developing markets slowed modestly.
Shares were more than 2% higher after Tuesday's update.
Mike Allen, an analyst at broker Panmure Gordon, maintained his "hold" recommendation on the stock, adding that the company needs to "demonstrate it can win work with the UK Government" and show more positive earnings momentum.