Prison riots hit G4S profits as Government cancels contract

PROFITS at a controversial unit of G4S that runs immigration centres and tags criminals collapsed by almost half last year as the outsourcer took heavy blow from its contract to run a violent, drug-riddled prison in Birmingham.

G4S Care & Justice Services UK made £21m last year, down from £38m in 2017, according to accounts filed with Companies House.

The decline included a £9m charge triggered by trouble at HMP Birmingham, a contract that has since been cancelled by the Government.

With £341m of revenues, the unit makes up the bulk of G4S’S wider Care & Justice division, which has become increasingly sidelined as the FTSE 250 member focuses on more conventional security work.

Earlier this month Ashley Almanza, its South African chief executive, hinted that G4S could look to offload the division in the long-term, saying it was “not a priority for growth capital going forward”.

“Any asset has to earn its place in the portfolio and clearly we would also consider under the right circumstances exiting some of the services we deliver in Care & Justice.”

A spokesman said profits for the entire division, which includes cleaning and maintenance contracts and work in Australia, were up in the year.

G4S’S cash solutions arm, which transports money for retailers and banks, is already on the block.

The company handed back HMP Birmingham to the state-run prison service in April after inspectors found an “institution that was fundamentally unsafe, where many prisoners and staff lived and worked in fear… drug taking was barely concealed [and] delinquency was rife.”

It agreed to hand the Government £9.9m to cover the cost of transferring control – most of which will be covered by a £9m provision recorded in last year’s accounts.

Care & Justice accounts for just 7pc of G4S’S global revenues but has been a repeated source of controversy.

It is still being investigated by the Serious Fraud Office after overcharging the Home Office to tag criminals, some of whom were later found to have been dead or in prison.

In 2017 a BBC investigation accused G4S staff of mocking and mistreating detainees at Brook House immigration centre.

G4S missed out on a shot at retaining its work managing asylum seeker housing in the Midlands and the north-east of England in January.

Mr Almanza’s comments came as the company confirmed plans to separate out its cash handling business following pressure from shareholders.