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Organic sales growth in the security contractor Securitas is down according to the company’s interim report for January to June 2017. The group-wide sales growth of 3pc for the first half of 2017 compares with 7pc for the year 2016.
The operating margin was 4.9 per cent, slightly lower than the 5.1 per cent of the same half of the previous year. Like another global contractor, G4S, Securitas in older markets such as Europe has been growing less fast than in newer markets, such as South America. The same was true for the first half of 2017; organic sales growth for Securitas in Europe was zero, compared with the overall group’s growth of 3pc (and 14pc in South America). Operating margin in Europe however at 5.1pc was above the overall group’s figure of 4.8pc.
In Europe, the company reports that it has 780 branch managers and 117,000 employees (which compares with 112,000 employes in North America and Mexico). The company said that in Europe it expected ‘a gradual recovery of the portfolio business towards the end of 2017’. Germany, Netherlands and Turkey were named as ‘key contributors’ to growth while in the UK the firm lost a retail contract in November 2016. Europe-wide the client retention rate has fallen to 89pc from 93pc, and staff turnover has risen slightly to 29pc from 28pc.
Alf Göransson, pictured, President and Chief Executive Officer, said that the company was continuing to deliver on its strategy. Briefly as an aside, that’s to move away from (lower-margin) human guards in gatehouses and behind desks, and more towards (higher margin) use of electronic security and officers doing response to alarms and activations. While use of data about clients would allow more efficient use of resources, and even allow prediction about what sort of crime and threats a client is facing, it does raise the question of who owns the data; the client, or the security provider.
Göransson said: “Security solutions and electronic security continue to grow at a high pace and is becoming a larger part of total Group sales. As an important part of our strategy, Vision 2020, we are gradually increasing investments in digitising our customers’ historical and real-time data to produce more predictive security. In combination with our security solutions and electronic security strategy, intelligent security will create further customer value, enhanced security, and strengthen our leadership in the global security market.”
Securitas meanwhile has entered the Australian market by signing an agreement to acquire the Melbourne-based security company PSGA. According to the multi-national, the Australian private security market, which includes on-site and mobile guarding, monitoring, cash In transit (CIT) and private investigations, has an expected annual growth rate of 2pc over the next five years. It is estimated that the industry has more than 54,000 security officers and 6,000 active security companies. The market has seen a trend of consolidation over the past decades. Geographically, the security services market is concentrated in the main cities of Sydney, Melbourne and Brisbane.