‘Whatever you do or dream you can, begin it. Boldness has genius, power and magic in it.’ Goethe’s famous words seem to have been heeded by the security industry. Last year, almost half of all security companies increased their levels of debt, displaying a confidence the industry has not seen before, says market research specialist Plimsoll. Plimsoll has published its annual analysis of the top 1,000 security companies, of which 90% show some form of debt. Indeed, 49% of the industry’s member companies increased their formal lending during the year 2000.
David Pattison, general manager of Plimsoll, believes the reasons for this are two-fold – companies are financing losses to keep afloat, while others are investing to become more competitive.
The Plimsoll report states that 53% of those companies adding extra debts actually increased their profits last year. Only 76 of those companies surveyed showed no debt at all.
The research also suggests that a typical security company finances (on average) 22% of its assets. However, this statistic hides the realism that nearly 25% display twice this average debt level.
Pattison warns that keeping too much cash can also be a dangerous policy. He advises the 156 cash- rich security companies to "seek out exposed competitors and snap them up".
