The fall-out from the loss of the Ministry of Justice contract to monitor electronically-tagged offenders – after the ministry found the contractor was over-charging – has hit G4S financially.
For the first half of 2014, according to its latest results, the multi-national had revenue of £3,371m, an increase of 4.1 per cent on the same half of 2013. Europe saw a fall in revenues of 1.2 per cent, while the UK and Ireland saw revenues fall by 2pc as the electronic monitoring contract ended in the first quarter of 2014. In contrast with recession-hit Europe, emerging markets grew by 12 per cent year on year and, with revenues of £1.2 billion in the first half of the year, now represent 36 per cent, more than a third, of group revenue.
G4S Chief Executive Officer Ashley Almanza said: “The group made good progress and delivered a satisfactory financial performance in the first six months winning new contracts with a total value of £1.2 billion and producing a 6.3 per cent increase in PBITA and 13.2% increase in earnings. There remains much to be done to capture the full potential of our strategy and to strengthen the group’s performance.”
The company spoke of demand for our services as robust, particularly in emerging markets. The firm said it was ‘restructuring and rebuilding’ its businesses in UK and Ireland and in Europe. It said it had seen growth return to the North American market. Last year saw a review of the firm’s strategy and business. According to the company it has made good progress with the implementation of a ‘corporate transformation programme’. The report said: “We have enhanced our risk management controls and practices, strengthened contract management and are adopting a more systematic approach to measuring customer service. A group-wide internal communications programme is also under way.”
For the report in full visit: http://www.g4s.com/~/media/Files/PDFs/2014%20interim%20result.ashx
Meanwhile Serco that shared with G4S the scandal of the over-charging for offender electronic tag monitoring, also reported half-yearly results last month. Rupert Soames, Serco Group Chief Executive Officer, admitted trading was poor in the first half of 2014. He said: “We are making good progress with our strategy review, and in rebuilding trust and confidence with the UK Government. Many challenges remain, and we have a lot of work to do, but I am confident that, in time, we can restore the company’s fortunes.”
