G4S dodges a bullet

London – The City [of London] breathed a sigh of relief yesterday as security firm G4S avoided further pain on lossmaking deals and won new contracts despite an “uncertain” trading climate. The company shocked investors in March when it revealed up to £77m in extra provisions on its disastrous Compass contract to house asylum seekers.

The huge rise in asylum seekers – a result of their fleeing war-torn Syria – has left the company attempting to cope with claimant numbers which are 50 per cent above what they estimated when the deal was signed in 2012.

Yesterday the shares rose 4.8 per cent or 8.9p to 193p after the firm, in an unscheduled update, said it was managing several “onerous” public sector contracts to an “effective conclusion”, with no further charges taken in the first quarter of the year. Chief executive Ashley Almanza has been rebuilding the group’s balance sheet and reputation after pratfalls including a failure to supply enough security staff for London’s 2012 Olympics and a scandal over charging the taxpayer for tagging dead prisoners.

He has sold off 24 of the sprawling business’s divisions so far, racking up proceeds of £286m.