G4S, the biggest private security contractor in the world, has announced that it will be selling its businesses over the next two years to recover losses from British government contracts, including providing services for asylum seekers.
This announcement came hot on the heels of a £65 million charge that the company incurred on contracts. G4S saw its share prices fall 12% after it said an increase in asylum seekers between November 2015 and January 2016 had forced the company to lift its provision by £20 million on its contract to provide accommodation for asylum seekers.
G4S is one of three security contractors that is providing such services in the UK. However, even after facing losses, the company was very clear that it had no intentions of exiting the contract early. The contract comes to an end in August 2017.
“We have no intention of getting out of the contract. We are there, we are working extremely closely and I think, well with the customer, to deliver this contract in extremely challenging conditions,” said G4S Chief Executive Ashley Almanza.
The company intends selling its weak businesses, including UK Utility services, UK Children’s services, G4S Israel, US Youth Justice services, and 38 other divisions. These sales will help G4S raise between £250 million and £350 million, and will be done under a restructuring programme that the company has designed to help recover from the contract problems it is facing in the UK.
The restructuring programme started in November 2013, and so far the group has identified 65 businesses that it wants to either sell or close. However, the shares of the company have plunged 41% since May 2013. For the year ending 31st December 31 2015, the company posted group revenue of £6.4 billion, which is 4% more than the previous year.