Search

G4S warns over asylum seekers contract as pre-tax profits rise to £327m

10:19 09 March 2016

Undated handout photo issued by G4S of their logo.

Undated handout photo issued by G4S of their logo.

Outsourcing giant G4S has warned that it could lose a further £57m if the government extends a key contract to house surging numbers of asylum seekers.

The firm revealed a £31m provision on the loss-making contract, up £20m, as the number of asylum seekers it handled lifted by 9.6pc year on year.

But it estimates that, if this five-year contract, due to end in 2017, is extended for two more years it would cost a further £57m.

Underlying group pre-tax profits rose 14.7pc to £327m in 2015 as the business signed new contracts across the globe and saw revenues lift 4pc to £6.4bnn over the same period.

But statutory profits fell to £8m, from £145m a year ago, reflecting large writedowns and charges, sending shares down by 12pc.

G4S pledged to sell more businesses and booked £255m of costs as the group continues an overhaul to move away from its scandal-ridden past.

It booked the charges on a mixture of restructuring costs, onerous contracts, losses on sold businesses and non-cash writedowns.

G4S has been leading a turnaround to put behind it a prisoner tagging scandal in 2013 and its failure to supply adequate security for the London Olympics in 2012.

The firm said sales in the UK fell by 3pc last year and it increased charges on the number of loss-making contracts in manages in Britain, such as its care of asylum seekers.

It booked a £65m charge on these contracts across the group last year, reflecting losses it expects to make on UK Government work.

The business said it expects to sell businesses with combined revenues of around £400m in the next 12 to 24 months, with the areas it plans to leave including UK children’s services and US youth justice services.

The group is being overhauled by chief executive Ashley Almanza, who took the helm in 2013 following a spate of scandals.

It said the total value of the contracts it signed across the group jumped more than 14pc to £2.4bn in 2015, including contract retention rates of more than 90pc.

Mr Almanza said: “Against a background of economic uncertainty, demand for our services has remained resilient and revenues grew in all regions apart from the UK.”

The firm said sales grew 8.6pc in emerging markets, lifted 5.8pc in the US and rose by 3pc in the rest of Europe.

It added that sales growth accelerated in the second half of last year, and the business expected to make “good progress” in 2016.

AJ Bell investment director Russ Mould said: “The group’s results have been hit by writedowns on onerous contracts which includes the loss-making one with the Home Office over asylum seekers.”

Search hundreds of local jobs at Jobs24

0 comments

Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files
Comments

Please log in to leave a comment and share your views with other Eastern Daily Press visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by Eastern Daily Press staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique Eastern Daily Press account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

HOT JOBS

Show Job Lists

Insight

Emma Watson and her daughter, H who was the inspiration for Little Hotdog Watson.

Norwich-based designer, Emma Watson, tells us why she decided to start her own business and reveals the special meaning behind the company’s unique name, Little Hotdog Watson.

Green 100

cover

Enjoy the Green 100
digital edition

Read

Mustard TV

Meet the Team

Mark Shields

Business Editor

|

Chris Hill

Agricultural and Farming Editor

|

Business Most Read

Awards

Norfolk Future 50 EDP Business Awards Green 100

Business Most Commented

Newsletter Sign Up