On this week’s agenda: laughter and tears for investors at G4S, Bwin.party, Vedanta and Pinewood Studios
How many G4S security guards does it take to change a lightbulb? Six soldiers and a policeman.
So went the gag on the estimable Popbitch website over the summer, as the gaffe-prone group humiliated itself yet again – this time over its Olympic security contract.
To be scrupulously fair, Popbitch was being rather cruel: writing G4S jokes is quite obviously the company’s domain, so it will now need to reassert its dominance in the field this week when it unveils its half-year results.
All the talk during the presentation will predictably surround how the Olympic debacle impacts the company’s reputation and finances – and while Panmure Gordon analysts reckon the shares are “finely poised”, the same is unlikely to be said of embattled boss Nick Buckles.
Still, as the City waits for his escape, Buckles just keeps on churning the punchlines out, with last week’s farcical reports involving a G4S security guard taking a quick break outside a Poundland before collecting its takings. As he sat in his armed van browsing his newspaper, an impostor dressed in full G4S attire walked into the store, where staff handed over £14,000. They eventually ventured outside to tell the waiting driver how they’d handed the cash to his mate. “What mate?” was the panicked reply.
It seems the house doesn’t always win
In gambling, a martingale is a betting strategy involving the punter doubling his bet after every defeat, the theory being that a win would recover previous losses and deliver a small profit.
In games of roughly even chance such as tossing a coin it sounds vaguely plausible – and no doubt you will have seen it being tried at a roulette table, where advocates argue they are on to a sure thing by betting on either red or black. Inevitably, however, these people are buffoons and the mathematics of the system means the growth of the wagers will bankrupt the gambler (unless he possesses infinite wealth).
Even in the City there are not many quite so rich, and a few mortals are starting to learn the lessons of doubling up on gambling shares following the 2010 merger of PartyGaming and Bwin. At the time, each firm was valued at around £1.1bn, but you can now get the pair for £770m and falling.
The company reports results on Friday in a busy week for the sector (Paddy Power, 888, and Playtech get an outing too), but nobody’s wagering on a change in fortune for Bwin’s investors. Regulatory uncertainties, a weak poker market and higher taxes are stacking the odds against them. No more bets.
The Vedanta meeting will come to order
One wonders if Anil Agarwal, chairman of the mining group Vedanta Resources, has considered hiring the Olympic stadium for his company’s annual meeting this week, rather than squeezing his board, investors and an army of protesters and placards into less spacious facilities in town.
In what promises to be the FTSE 100 miner’s latest sell-out, campaign groups such as Amnesty, Survival and Foil Vedanta (to name just a few) will be highlighting a range of grievances including alleged pollution, poor safety and persistent efforts to mine bauxite in India’s Niyamgiri hills, which are considered sacred by an ancient tribe.
The pinstripe suits of the City, of course, have been heard to sniff at such worthy concerns, but they do tend to take note of words emanating from former Financial Times editors. One of them, Richard Lambert, also has views on the miner, including: “It never occurred to those of us who helped to launch the FTSE 100 that one day it would be providing a cloak of respectability… for companies that challenge the canons of corporate governance, such as Vedanta.” Or, as a company spokesman puts it: “The AGM will be more of the same. The meeting starts. NGOs ask questions for two-and-a-half hours. The company refutes the allegations. Then we all go home.” Simples.
Listen carefully, Bond: this plan B
It was in the 1999 Bond film The World Is Not Enough that 007 admitted to M: “Construction’s not exactly my speciality.” “Quite,” she replied. “The opposite, in fact.”
That all seems rather apt now, as part of that film (just like the new effort, Skyfall, pictured) was shot at Pinewood Studios, the “media village” which happens to be having construction problems of its own. In January it scrapped a £200m plan to build 1,400 homes and a 100-acre set on green belt land at its Buckinghamshire base, after planning permission was refused. Still, Pinewood loves an expensive sequel and the company now hopes to return with a new scheme in the autumn, understood to include eight sound stages, offices and workshops.
That one’s just as likely to rile local campaigners, so expect them to quiz Pinewood chairman Lord Grade at the group’s annual meeting this week, in a nice tale of Joe Public against City grandee. Someone might even make a film about that.
Chief inspector criticises privately run HMP Wolds as under-fire security firm bids to renew its contract
The chief inspector of prisons has criticised a G4s-run privatised prison for high levels of illegal drug use and significant inmate idleness as its contract is put out to competition.
Inspectors’ spot-checks found that up to 30% of prisoners at the Wolds category-C “training” prison, in east Yorkshire, were on the wings doing nothing during the working day and that few of the education, training and workplaces that did exist were of sufficient quality to engage and develop the skills of inmates.
HMP Wolds became the first privately managed prison in Europe when it opened in April 1992. The current 10-year contract to run the prison is expiring and it is one of nine put out to tender for bids from private security firms and the prison service.
G4S is one of the firms bidding to run the prison. The loss of the contract would be a further blow following G4S’s private security company’s failure to provide enough security staff at the London Olympics.
Ken Clarke, justice secretary, said he wanted this round of prison privatisations to produce not only savings but also to focus on developing his “working prisons” concept and drug treatment regimes.
The report by Nick Hardwick, the chief inspector of prisons, said there had been some improvements at the G4S-run prison since the last inspection in 2010 but serious concerns remained about drugs, lack of staff confidence in tackling poor behaviour, and limited work and training provision.
The inspector said a third of the single cells at the prison, which holds 356 prisoners, had been “doubled up” to hold two prisoners and were too cramped, lacked sufficient furniture and had poorly screened toilets.
But the inspectors reserved their strongest criticism for the lack of meaningful employment opportunities, which they described as one of the principal purposes of a training prison. They say: “In this regard, too little had either changed or improved … training and learning had too low a profile, characterised by frequent interruptions and inactivity.”
The report, published on Wednesday, said it was “very poor” that 14% of inmates were either unallocated to activity or unemployed: “In our spot-checks we found that up to 30% of prisoners were on the wings doing nothing during the working day. Few education, training and work places were of sufficient quality to engage prisoners and develop their skills.”
The inspectors, however, said they were impressed by some of the work that was done at the Wolds, including that of a group of 25 inmates who carried out detailed marketing-related research for high-profile companies using closely monitored internet and telephone access.
They also praised an expanding business set up by the education department, which had trained eight prisoners to create computer-based products such as websites, animated programmes and video productions for business customers.
Michael Spurr, chief executive of the National Offender Management Service, said in response to the report: “The competition process that the Wolds is undergoing can create uncertainty but the director and her staff will continue to work to address the issues highlighted in the report to move the prison forward.”
Cathy James, the prison’s G4S director, said it was encouraging that the report recognised the prison had many strengths as well as challenges. “Few prisoners report feeling unsafe, the levels of violence are low and incidents of self-harm are lower than in similar establishments,” she said.
James added that since the inspection a technology suite had been opened to train prisoners and provide additional purposeful activity.
“In every prison managed by G4S, the care and welfare of those people in our custody is our top priority.
“We will be examining this report closely to see how we can best take forward its recommendations, where appropriate, and continue to build on the improvements already in progress,” she said.
Olympic Security Group concerned there was ‘no one who could press the panic button’
Senior police officers responsible for ensuring security at the Olympics have written to the Home Office urging ministers to learn lessons from the G4S debacle that led to the army being drafted in to help protect the Games.
The Observer understands that the Olympic Security Group (OSG), the elite body with overall responsibility for the policing of the Games, wrote to the Home Office last week outlining a series of “learning points” that needed to be addressed before the UK stages another major sporting event. The group expressed concern that there was no independent regulator of G4S, which meant its progress in meeting targets leading up to the Games had gone largely unmonitored until it was almost too late to take action. “It meant there was nobody who could press a panic button,” explained a source familiar with the group’s thinking.
The OSG also said the fact that there