G4S shares slide on Florida gunman link

June 13, 2016 12:51 pm Published by

G4S shares slide on Florida gunman link

  • 13 June 2016
  • From the section Business

G4S logoImage copyright

G4S shares fell 6% on Monday after it emerged the company had employed Orlando gunman Omar Mateen who killed 50 people in a Florida nightclub.

G4S said Mateen was employed at a residential community in south Florida.

The fall appears to be prompted by worries the incident could damage G4S’s ability to win future US contracts.

The company describes itself as “the largest security solutions provider in the world”. About 20% of its 610,000 global workforce are in the US.

It is one of the world’s biggest private sector employers.

Mateen underwent detailed screening when recruited in 2007 and was re-screened in 2013 with “no adverse findings”.

The company said: “G4S is deeply shocked by the tragic events in Orlando this weekend and the thoughts of everyone at G4S are with the victims and their families.

“G4S is providing its full support to all law enforcement authorities in the USA as they conduct their investigations.”

Jasper Lawler, analyst at CMC Markets, said there were “definitely some question marks over their hiring practices and maybe their wider business practices”.

“If [G4S is] in the spotlight, then that risks future contracts for them in the US,” he added.

The 11.1p decline to 176.4p brings the slide in G4S shares this year to more than 21%.

Shares fell by more than a fifth in March after the company reported a sharp fall in annual profits after taking a £65m charge to cover the cost of “onerous” UK government contracts.

G4S attracted widespread criticism in 2012 after failing to recruit and train enough security staff ahead of the London 2012 Olympics. Soldiers had to be drafted in as a result.

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The following year it was found to have overcharged the UK Ministry of Justice for the electronic tagging of offenders.

The company warned investors in March that it could suffer a further £57m of losses if its contract to run asylum centres in the UK was extended to 2019.

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This post was written by FSB News