G4S has revealed that its profits were hit by a £136 million charge, part of which related to its controversial electronic tagging contract with the UK Ministry of Justice (MoJ). The company is refusing to break out separate figures for the tagging contract scandal.
In November, the company apologised and issued credit notes worth £24.1 million to the MoJ after it was found to have carried out billing practices that resulted in the government being overcharged on electronic monitoring contracts. It has since lost the contract to Capita.
According to its 2013 preliminary results, G4S carried out a global review of its contracts, covering 163 contracts with a total value of £2 billion. It said that the £136 million charge arose from a review of its UK electronic monitoring contracts, which spanned nine years, 35 million records and multiple contract renewals. G4S said that it had around 60 percent of the UK electronic monitoring markets. Rival security firm Serco was also involved in the overcharging scandal.
G4S chief executive officer Ashley Almanza said: "The company continues to engage in constructive discussions with the UK government and we remain committed to resolving all matters relating to the electronic monitoring contracts."
However, the electronic tagging charge was only one part of a wider hit on G4S's profits, totalling £386 million. The company also took a one-off charge of £182 million after reviewing its assets and liabilities and another charge of £68 million for its accelerated restructuring programme for 2013/14.
Meanwhile, the company is hoping to cut costs through programmes including IT standardisation and infrastructure rationalisation and sharing back office services in the UK.
G4S Chief Executive Officer Ashley Almanza said: "This has been an extremely challenging year for G4S. We have taken clear action to address longstanding issues and have introduced wide-ranging changes to strengthen our business. We can now look to the future with increasing confidence, focusing on the growing demand for G4S services that underpins our plans to deliver sustainable, profitable growth."
The company has made a number of new senior IT appointments to help it achieve its technology strategy.
Former Tesco IT director Nick Folkes has this month joined as G4S's regional CIO for the UK and Ireland.
It follows the appointment of Martin Taylor as group CIO, a newly-created role.