G4S Plc (GFS), the world’s largest security-guard supplier, fell the most in eight months in London trading after Britain called in the military to beef up the company’s efforts to staff London’s Olympic Games in two week’s time.
G4S is experiencing “some delays” in vetting and accrediting the thousands of extra security guards needed for the Olympics, the Crawley, England-based company said. Shares of G4S dropped as much as 4.5 percent to 277.3 pence, the biggest drop since Nov. 17.
The shortfall threatens the British security company’s earnings from the contract. G4S is in the final throes of training, vetting and accrediting 9,000 applicants in preparation for the “unprecedented and very complex” sporting event, it said. The company will work with the military and understands the government’s decision, it said.
“Taking on a contract like this is potentially a double- edged sword because it is so big and high profile,” said Steve Woolf, an analyst at Numis Securities. “If the games come off without a hitch, G4S’s reputation will be enhanced so it won’t matter if they incur a small financial penalty.”
The Ministry of Defense will set out details of the military deployment in a statement later today.
“This issue came up around a fortnight ago,” Home Office Minister James Brokenshire told BBC Radio 4 today. He said that until now G4S had previously been “very robust about the fact that they would deliver on their contract.”
The company traded at 285.2 pence as of 10:50 a.m.
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