G4S share price slides on NAO report

on Nov 12, 2013
Updated: Oct 21, 2019

iNVEZZ.com, Tuesday, November 12: Shares in London-based G4S (LON:GFS) have fallen this morning, after a report from the National Audit Office (NAO) revealed that the world’s largest security-services provider, paid no UK tax in 2012, the year in which it failed to provide sufficient security for the London Olympics.

According to the report published by the government auditor today, G4S paid £85 million in tax worldwide on profits of £175 million. Its global revenues were £8 billion, of which £1.9 billion was generated in the UK. Revenues of £700 million came from the UK government.
Bloomberg reported today that the company, whose CEO, Nick Buckles, quit this year after the government had to call in the military at short notice to help protect the Olympics (Security Firm G4S’ CEO Nick Buckles to Retire), said in a statement that it had not paid tax because of exceptional losses in 2012.

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The NAO report disclosed for the first time how much government work is currently outsourced to the private sector. It found that the four biggest suppliers — Atos, Capita, G4S and Serco — carried out £6.6 billion-worth of work for the public sector and central government last year.

France-based Atos (EPA:ATO) also paid no UK tax on British revenues of £1.4 billion, of which half came from the UK government, according to the NAO. The information-technology company said in a statement e-mailed to Bloomberg: “We don’t undertake any aggressive tax planning and everything booked in the UK is also billed here. However, due to significant investment in the UK to maintain our business here as well as pension contributions we did not make enough profit last year to qualify for corporation tax.”

Capita (LON:CPI) and Serco (LON:SPR), which is likely to issue profit warning later this week (Serco share price plunges amid prospect of profit warning) paid £50-£56 million and £25million in UK tax, respectively.
Atos and G4S were criticised by Margaret Hodge MP, chairman of the Public Accounts Committee. She said in a statement today: “Everyone has a duty to pay their fair share in tax, but there is something particularly galling about the idea of company who gets its income from the public purse not putting its rightful contribution back in. Of course, we don’t actually know how much profit Atos and G4S made in the UK last year because this remains an area where there is a total lack of transparency. We need to lift that veil of secrecy.”

**G4S share price slips**
During today’s early morning session in London, G4S’ share price fell as much as 0.5 percent from yesterday’s closing price. According to AnalystRatingsNetwork data, currently two research analysts have given the stock a ‘sell’ rating, 12 have assigned a ‘hold’ rating and seven have a ‘buy’ rating. The stock therefore, has an average rating of ‘hold’ with a consensus price target of 260.29p.
**As of 08:56 UTC, buy G4S shares at 256.60p.**
**As of 08:56 UTC, sell G4S shares at 256.40p.**
Trade these shares now through Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.


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