Securitas Q1 pretax slightly higher on NAmerican ops; below expectations UPDATE

Securitas Q1 pretax slightly higher on NAmerican ops; below expectations UPDATE

	Published : Mon, 14 May 2007 08:09 By : Agencies Print this Story

(Updating with business area breakdown)

STOCKHOLM (Thomson Financial) - Security services group Securitas AB said first-quarter pretax profits rose 6 pct to 694 mln skr, boosted primarily by improving profitability at its North American operations.

Market expectations were for a pretax profit of 722 mln skr, according to SME Direkt. The actual results include 26 mln skr in Loomis re-branding costs while market expectations included 34 mln in re-branding costs.

Sales rose 2 pct to 15.218 bln skr vs market expectations of 15.235 bln skr, with EBITA margins unchanged at 5.4 pct. Organic sales growth amounted to 5 pct, also unchanged from last year.

Organic sales growth at Security Services North America, amounted to 4 pct down from 6 pct growth last year, while operating margins improved 0.3 percentage points to 5.0 pct. Last year's organic growth was boosted by 1-2 percentage points by increased activity in the wake of hurricanes in the USA.

Securitas said operating profits rose 11 pct in real terms at the division.

'The improvement in operating margin and the real change of operating profits is primarily driven by improved gross margin in the US guarding operations,' Securitas said.

At Security Services Europe, sales grew organically by 8 pct, up from 5 pct last year, with operating margins falling 0.1 percentage points to 5.5 pct. Operating profits rose 10 pct in real terms, supported by the airport security business and improvements in markets such as Sweden, France, Spain and the Netherlands, the company said.

In Loomis (formerly Cash Handling Services) organic growth fell to 2 pct from 6 pct, with operating margins falling to 5.3 pct from 6.3 pct.

'The reduced operating margin comes from pressure on wages in the US, losses in the Danish cash handling and higher cost of risk in the UK. Measures are taken and action plans are implemented in order to turn the negative trend in margins,' Securitas said.

The company said that due to troubles at the UK cash handling operations, the listing of Loomis will not take place in 2007. The company previously expected to list the unit in 2007.

It said it will take new actions at the operations with the results expected during the second half.

The new business area Mobile and Monitoring, which provides mobile security services for small and medium-sized businesses, had organic sales growth of 7 pct down from last year's 3 pct, with operating margins slipping to 11.5 pct from 12.2 pct.

'Mobile has a strong focus on building a stronger and larger sales force in order to drive new sales and organic sales growth,' Securitas said.

TF.TFN-EuropeStockholm@thomson.com

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