“The recession has hit the sector hard, with more than half of the companies analysed in our new report making less profit than they were a year before,” said David Pattison, senior analyst and author of the Plimsoll Industry Analysis: Manned Security. “The bill in lost profits stands at GB pound 761 million.”
When pressed for a reason as to why this collapse has occurred in the bottom line of companies throughout the market, Pattison suggested: “With demand so subdued and the resultant competition for work, many companies are unable to charge the price they need to make healthy profit margins. In the absence of pricing power many companies will have to make painful but necessary cutbacks in the next 12 months.”
However, the burden of lost profit is not being shared equally. Pattison explained: “152 companies have had to bear the brunt of the downturn. These companies have seen their profit margins decimated and, in the absence of a big upturn in demand, will have to cut their cloth accordingly.”
Pattison then fired a warning shot. “Watch out for further job losses and closures at these companies as they look to claw themselves back to profit next year. If they fail to act quickly they could well find themselves running out of cash.”
Achievement in troubled times
On the other hand, there are still companies ‘getting it right’ in spite of all the perceived doom and gloom. “Amazingly,” continued Pattison, “there are 68 companies that have maintained or increased their profit margins in the last year. All things considered, that’s a pretty good achievement.”
While some of these companies made cutbacks to match their lower sales expectations, others have managed the Holy Grail – they’ve grown their business and increased their profit margins in a recession. Those companies prove that an efficient business selling the right product to the right market can still succeed in the UK’s security guarding sector.”
The new Plimsoll Industry Analysis: Manned Security gives an instant performance rating on the top 298 companies in the market. Each company has been rated as Strong, Good, Mediocre, Caution or Danger according to their latest performance.
A graphical and written analysis informs the reader which companies are in trouble and who is ‘getting it right’.
Readers of Security Management Today (SMT) Online are entitled to a GB pound 50 discount on this new special edition of the Plimsoll Industry Analysis: Manned Security. Call 01642 626400 for further details and quote reference PR/SV51
