The latest study by financial analyst Plimsoll Publishing has revealed that as many as 90 of the ‘top 250 major players’ in the UK security sector are facing the strategic dilemma of increasing costs combined with falling profits – with company mergers being the only way out.
The study suggests that 124 of the top 250 companies made less profit in 2000 than they had done in 1999, with average margins falling from 2.4% to 1.7%. According to Plimsoll, costs in the same period increased by 14.6%. Only 16 of the major players successfully improved profits while reducing costs.
So what’s the answer? Reducing costs and sales is a short-term measure, but alliances and/or mergers are Plimsoll’s preferred option – it has the greatest potential for the smallest cost.
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