Acquisition activity is likely to increase in the UK security industry in 2005, according to industry analysts Plimsoll Publishing.
A new study highlights what the analysts call 305 cash rich companies that are ideally placed to enhance their earnings by acquiring a competitor.
Some 127 companies have been identified as their acquisition prospects. Ranging from some of the smallest to some of the largest in the industry, each one is displaying symptoms of financial stress, with low pre-tax margins and high levels of debt, according to the analysis. The average level of debt for these companies is 19 per cent of turnover. However, the analysis also suggests that each of these businesses could be turned around in a short period of time.
What they say
David Pattison, Senior Analyst at Plimsoll, says: “These under pressure companies are running out of options. As the average industry profit margin is only 2.7 per cent, and over half of companies are failing to increase sales, trading their way out of their current position will be almost impossible. With so many cash rich companies operating in the market, selling up might be the only sensible option left. By acquiring and clearing the debts of any one of these struggling companies, a cash rich company could become the proud owner of a profitable business.”
The Plimsoll Portfolio Analysis – Security is a financial analysis of the top 1000 companies in the industry. The current edition includes a FREE Acquisition Pack highlighting the ‘under pressure’ companies that each display the characteristics of an acquisition prospect. The 1280 page analysis plus acqusition pack is available in paper format (£305) or electronic format (£499 plus VAT). Order by calling 01642 626400. Readers of this publication will receive a 5 per cent discount.
