G4S poised to reveal fallout from Olympic Games ‘shambles’

The fallout from G4S’s bungled Olympics contract will dominate the agenda when the security company reports interim results tomorrow.

With G4S admitting in early July that it would not be able to provide its 10,400 contracted guards for London 2012, investors will be looking for confirmation of the financial – and reputational – impact after the group said it will lose up to £50m on the £284m contract.

The Government had to plug the gap with military personnel, and G4S chief executive Nick Buckles has been left fighting to save his career after agreeing with MPs that it had been a “humiliating shambles”.

Analysts at Panmure Gordon said the Olympics loss was expected to be listed as an exceptional item in the half-year results, but they predicted a possible hit to underlying earnings in the range of £2m to £4m.

The market will be looking for reassurance on G4S’s contract pipeline amid fears that the Olympic contract has hurt the group’s bidding prospects for outsourcing work.

UBS analysts said they believed G4S had dropped out of bids for government deals as management attention was diverted to the Olympics contract.

“We wonder if there has been any further fallout in terms of bidding activity,” they said.

There had also been fears the Government would be put off handing contracts to private sector firms, although construction and support services firm Carillion recently dismissed these concerns and said the public sector market was buoyant.