Control Risks hit by Iraq problems

By THIS IS MONEY
Updated:

 

General David Petraeus may have taken a surprisingly upbeat view of the improving situation in Iraq, but Western businesses have all but cleared out of the violence ridden country.

That has been bad news for the private security companies that made huge profits in the first period after the US-led invasion.

Control Risks, one of the big British players in that market, has seen a massive fall in profits from its work guarding diplomats and other British Government employees in the war-torn country.

The company won a huge contract to provide security personnel to look after all the Government's employees. It also had lucrative jobs guarding private sector workers involved in the reconstruction effort, many of whom were running projects funded by the US.

However, with the increasingly dangerous conditions, the corporate work has all but dried up, along with the US funding. Revenues last year from Iraq fell £14.9m or 24%, leading to a £3.3m collapse in profit.

Chief executive Richard Fenning said: 'It sounds counter-intuitive, but Iraq has got too dangerous for security companies to boom there.' The fact that Control Risks is still running the British government contract acts a cushion against the collapse of the private sector work, he added.

Control Risks' overall operating profits fell to £5.9m in the year to 31 March from £11.7m a year earlier. Fenning said the company was still growing rapidly in other parts of the world.

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