A survey by Plimsoll Publishing Ltd suggests that the top 1000 companies in the UK Security industry are in one of four moods based on their current financial strength.
It appears that 42pc seem to be entering 2005 in a cautious mood.
David Pattison, Senior Analyst at Plimsoll Publishing, says:
"There is evidence that these concerns are justified, with 48pc of this year’s entrants suffering a fall in profit since last year’s study. This supports the fact that margins are coming under increasing competitive pressure. With current market growth at 7pc, perhaps a cautious approach is right. So why do others see their fortunes differently?"
The Moods in 2005
Cautious
Some 42pc of companies in the Security industry are uncertain how 2005 will be. Their recent financial performance has been at best satisfactory. Their sales growth is static, with margins averaging 3.9pc. Nevertheless, most of these companies could be described as prudent as they hardly carry any debts. If 2005 proves unfavourable, their balance sheets should offer some protection, but they must keep a close eye on aggressive competitors. What’s keeping them awake at night? A stiff neck from looking over their shoulders.
Upbeat
Some 23pc of companies are upbeat regarding their prospects for 2005. These companies are not having any trouble achieving extra sales growth, with many having increased sales by 21.6pc. They are also not seeing any reduction in margins – typically they reported margins as high as 9.1pc. Their priority for 2005 should be to build on their existing success. This will not be as easy in today’s highly competitive industry. What’s keeping them awake at night? The chance that their blatant success could be exposed to a low cost competitor.
Gung-ho
Some 16pc of companies included seem almost bullish about 2005. They appear determined to press on with their aggressive pursuit of market share. These companies shared most of the growth in the market last year. It is an exciting time to be at one of these companies as employment is up from last year. Most are selling at a loss, a trend currently popular in the industry. Can they maintain this risky strategy? What’s keeping them awake at night? The chance that their bubble might burst.
Under Pressure
Some 18pc of companies surveyed are finding the market more competitive than ever. They all reported falling sales, some by as much as 8pc. Clearly this has affected their profitability as three quarters of these companies are selling at a loss. Their priority in 2005 should be to hang on to current sales, get on top of their costs, and reduce their levels of debt. What’s keeping them awake at night? The bank manager.
The latest edition of the Plimsoll Portfolio Analysis – Security individually assesses the financial performance of the industry’s leading 1000 players. The 1248 paged analysis is available for £305 (Paper) or £499 plus VAT (Electronic). Order by calling 01642 626400. Professional Security readers will receive a 5pc discount.
