Guarding companies sliding into debt
By Brian Sims
Following an avalanche of comments to its June study on the security guarding marketplace, Plimsoll has produced an updated set of figures to incorporate the latest statistics. Plimsoll's original analysis (see the web link on the right hand panel of this page) found that a record number of security guarding companies are on the Danger List. 6,049 jobs are in jeopardy, while a fifth of guarding firms are at risk of failure under a prolonged slowdown in the UK economy. The feedback Plimsoll received from its June report was that, in general, companies were not experiencing too much difficulty in retaining sales. This is borne out in the updated analysis that puts current market growth at a respectable 7%. Note, however, that this is down from the previous year's 9%. 226 of the 320 companies analysed are holding or increasing sales on last year.
That said, this headline hides some worrying trends:
* 23% of companies are currently selling at a loss
* 41% of the 320 firms surveyed are making less profit than last year
* despite the alleged slowdown in lending, 34% of companies are in more debt now than they were 12 months ago
* 55 of the guarding companies surveyed are currently rated as being at a high risk of failure in this updated analysis
Clearly, while sales in the market continue to grow, albeit at a slower pace than last year, this buoyancy is distracting some directors from other areas of the business which require urgent attention.
The economic trends for guarding
David Pattison, senior analyst on the project, has commented on economic trends in the UK's guarding sector. He said: "The reality is that sales teams are very rarely privy to the full picture. All-too-often, they are unaware of the costs of overheads, the levels of debt and how their sales add up in profitability. The latest figures do seem to suggest that the focus has switched from profit to sales, as companies grab business almost at any cost. That old adage 'Sales for Vanity, Profit is Sanity' has never been more apt."
Pattison continued: "The Plimsoll Analysis is a tool for measuring the current economic risks, as it allows companies to understand their market and their competitors better. In such stretched economic conditions, companies need to assess and understand who is a long-term threat in the market and which companies are following an unsustainable strategy. This sort of background knowledge could be the difference between spotting a potential acquisition at a bargain price and becoming one."
The full updated Plimsoll analysis allows readers to determine how the UK's Top 320 security guarding companies will cope with this unkind market.
Survival of the fittest
This special edition of the 'Manned Security' report exposes all the names, details and financial performances of the UK's leading guarding firms. It also includes a future snapshot on each company demonstrating how each might survive this period of consolidation. It names those companies that are placed to gain the most and those that need to retreat or sell up.
Contact: Gary Smith, GMB National Secretary on 07710 618909 or GMB Press Office: Steve Pryle on 07921 289880 or Rose Conroy on 07974 251823.