Security firm G4S is back in profit following a number of positive months since the turn of the year.
G4S reported a pre-tax profit of £85 million for the six months to the end of June, a substantial improvement on the £94 million loss recorded a year earlier. The security company has been plagued by a series of scandals in recent years including a failure to provide enough security for the London 2012 Olympic Games and an investigation into overcharging the government for prisoner tagging contracts.
However, it has started on the road to recovery, helped by strong demand in emerging markets and improved growth in North America. Revenue was also up 4.1 per cent to £3.37 billion, an increase on the £3.23 billion recorded 12 months earlier but G4S is far from out of the woods. Chief executive Ashley Almanza explained there was "much to be done" to restore performance.
Mr Almanza said that G4S is planning to close 15 businesses within its operations over the coming months. He stated, however, that some of the units barely break-even and contribute less than one per cent of the group's total revenue. Discontinuing them will help toward G4S hitting its recovery goals moving forward.
While G4S is starting to show signs of improvement, outsourcing company Serco recently announced a significant loss of revenue. Both organisations were subject to an investigation from the Serious Fraud Office after being accused of overcharging the government for its electronic tagging contract.
G4S has forced to repay £108.9 million plus tax to the government while Serco agreed to repay £70.5 million plus tax in December 2013. The ruling has impacted significantly on both companies with Serco announcing a £7.3 million loss in the first half of the year. Officials blamed the disappointing performance on "poor trading".
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