Security giant G4S slumps to £170m pre-tax loss after an ‘extremely challenging year’

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Security giant G4S has slumped to a £170m pre-tax loss as it took a major hit from the cost of settling a scandal in which it overcharged taxpayers for the electronic tagging of offenders.

The FTSE 100 group fell into the red after an “extremely challenging” period as earnings dropped for a second year in a row following the Olympics fiasco of 2012, which saw them reduced to £158m.

It said it was still in “constructive discussions” with the Government over the tagging affair - four months after ministers rejected a £24.1m settlement offer. Rival Serco has since agreed a £68.5m settlement.

A review by G4S of 163 global contracts, which included a provision for the UK tagging contract, calculated a £136m hit to the balance sheet.

The charge was part of £386m in one-off costs the company said it faced, including the result of a review of its assets and liabilities and the costs of restructuring.

Chief executive Ashley Almanza said in a statement yesterday: “This has been an extremely challenging year for G4S.

“We have taken clear action to address long-standing issues and have introduced wide-ranging changes to strengthen our business.”

G4S employs nearly 2,600 people in Yorkshire and the Humber. It provides security at Headingley Carnegie Stadium in Leeds.

Tony Burdin, chief executive of Sheffield Mutual Friendly Society

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