G4S: Fighting to secure its own world

While G4S has long been associated with high-profile and embarrassing headlines, the Olympics aside, these have not often negatively impacted on either the company’s financial performance, or its ability to secure new contracts. Following the screening of a recent BBC Panorama documentary highlighting a string of abuses in one of its Secure Training Centres (STCs), fresh calls were made in the House of Commons for the company to be banned from bidding on government contracts. This case study examines a string of controversies, both at home and abroad, the impact they have had on the company, its prospects of future work for the UK government, and how well insulated the company is from the potential loss of a lucrative client.

Scope

Examines the troubles faced by G4S during its relatively short history

Assesses the damage these controversies have inflicted on the company's reputation

Looks at the restructing program undertaken, and the level of success it has achieved

Considers the company's prospects both at home and abroad

Reasons to buy

How has G4S acquired such a negative reputation?

How has this impacted on its ability to win new contracts?

How effective has the restructuring process been?

Companies mentioned

None

Table of Contents

Overview

Catalyst

Summary

GS a brief potted history

An overview of services

A global operation

A history of controversy

Early days in the spotlight

The death of Jimmy Mubenga

A debacle of Olympic proportions

Company performance

A solid start to life

The cost of failure

Governmental outsourcing in the UK

Establishing a trend of outsourcing public services

Criticism of outsourcing monopolies

No apparent change in policy

Unsecured world: losing contracts at home and abroad

UK children’s services business

Rainsbrook

Medway

Tagged, dead or alive

BBC Inside Out reveals early problems

Repaying the government, and having the contract “stripped” from them

Two years later, and still tagging

Negative headlines add up on the domestic front

The red door scandal

HMP Oakwood: Prison of the (dystopian) future

Overseas embarrassments

Accusations of torture and death in South African prison

Australian PNG detention center

Pressure surrounding involvement in Israel

Restructuring

A change at the top

New markets

Cutting away the dead wood

Failings mask restructuring work

Future prospects

Angling for new UK contracts

Continuing to grow the global business

Further streamlining

Conclusions

Restructuring, greater oversight and new markets are key

Appendix

Sources

Further Reading

Ask the analyst

About MarketLine

Disclaimer

List of Tables

None

List of Figures

Figure 1: Sources of revenue (2015)

Figure 2: Revenue by region (2015)

Figure 3: G4S logo

Figure 4: G4S revenues, £bn, 2004 – 2015

Figure 5: G4S profits

Figure 6: Asylum seekers’ doors painted red by G4S subcontractor

Figure 7: Police outside HMP Oakwood during January 2014 riot

Figure 8: Revenue percentage by market

Figure 9: G4S employee numbers

Figure 10: G4S share price

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