G4S, the world’s largest security firm, said it would sell more businesses in the next two years after it took an additional £65m charge on loss-making Government contracts, including services for asylum seekers.
Shares in G4S plunged after the company said an increase in the number of asylum seekers between November and January forced it to lift its provision on its contract to provide accommodation for asylum seekers by £20m.
G4S is one of three companies providing such services in Britain, but chief executive Ashley Almanza said it did not plan to exit the contract early.
“We have no intention of getting out of the contract,” Mr Almanza said. “We are there, we are working extremely closely and I think, well with the customer, to deliver this contract in extremely challenging conditions.”
The company, which runs services ranging from moving cash to protecting ships, is selling weak businesses under a restructuring programme as it attempts to recover from contract problems in Britain.
It said it would exit its G4S Israel, UK utility services, US Youth Justice services and UK children’s services contracts, which along with 38 other divisions previously announced, would raise £250m to £350m.
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 14 per cent to £2.4bn in 2015, including contract retention rates of over 90 per cent.
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 8.6 per cent in emerging markets, lifted 5.8 per cent in the US and rose by three per cent 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.
“Full-year results are broadly in line with expectations... although again messy as there are more disposals, onerous contract provisions and exceptionals,” said RBC analysts, who have an ‘underperform’ rating on the stock.
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.”
G4S employs around 2,500 people in Yorkshire. It provides stewarding and security for a range of sporting venues, including Headingley and Leeds United’s Elland Road ground. G4S provides cash in transit services and ‘street to suite’ services for North Yorkshire Police.
The company also manages the Work Programme for DWP in the region.