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British security giant G4S says its Olympic failure will cost HK$612.9m

PUBLISHED : Wednesday, 29 August, 2012, 12:00am
UPDATED : Wednesday, 29 August, 2012, 3:42am
AFP

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British security giant G4S said that its failure to provide enough guards for the London Olympics would cost about £50 million (HK$612.9 million).

The company said in a results statement that it had booked the loss as an exceptional item in the first half. The provision was at the top end of its prior forecast.

G4S added that pre-tax profits slumped 60 per cent to £61 million in the six months to the end of June, hit also by restructuring costs after it slashed 1,100 jobs worldwide. Net profits tumbled 74 per cent to £30 million.

Just two weeks before the Olympic Games began, G4S revealed it could not completely fulfil its £284-million contract to provide 10,400 security staff for Olympic venues.

It triggered a political firestorm and the British government was forced to deploy an extra 4,700 troops to cover the shortfall.

Under-fire chief executive Nick Buckles admitted yesterday he was "deeply disappointed" about the problems with the Olympics contract, and he needed to prove to investors that he deserved to keep his job.

The London-listed firm is carrying out an Olympic contract review that will be completed next month.

G4S meanwhile reassured investors that it would have enough staff to cover the Paralympics, which start in London today. "We are confident that we have an assured security workforce for the Paralympic Games and do not anticipate any workforce shortfall issues to arise," it said.