Cellnet helps Securicor rocket to pounds 37m

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The Independent Online
SECURICOR Group lifted half-year pre-tax profits 28 per cent to pounds 37m, fired by renewed growth in profits at Cellnet and continued recovery in its traditional security guarding, parcels and hotels businesses.

Boosted by a 55 per cent jump in subscribers to 1.02 million, Securicor's share of Cellnet's half-year pre-tax profits grew 26 per cent to pounds 26.9m, accounting for most of an pounds 8m rise in overall operating profits to pounds 37.2m.

Securicor and Security Services, its 50.75 per cent- owned subsidiary, together hold 40 per cent of Cellnet, which is 60 per cent-owned by BT. Security Services reported a 33 per cent rise in pre-tax profits to pounds 26.8m.

Interim dividends at Securicor and Security Services are up 10 per cent to 0.805p and 1.686p respectively.

Bob Warner, managing director of Cellnet, said the company would launch its new digital phone product on 14 July to take on Vodafone. Cellnet would not be out to fight Vodafone on the basis of price but quality of service.

Profit growth at Cellnet last year was erased by marketing costs. In this half, new incentive payments of pounds 300 to business users of the analogue service depressed profits by pounds 5m- pounds 8m, analysts said.

Profits from Securicor's traditional business rose 31.4 per cent to pounds 10.2m. Reflecting past cuts in staff costs, returns from security activities improved from pounds 3.8m to pounds 5.02m.

Start-up costs associated with Securicor's pounds 96m contract for escorting prisoners to and from court in London, and expansion in Africa, were pounds 1m.

The acquisition of Scottish Express last autumn accounted for a third of a 37 per cent rise in profits on parcel deliveries to pounds 4.9m. Returns were helped by a 3.6 per cent rise in parcel volumes and a trend back towards more expensive one-day as opposed to two or three-day deliveries.

Excluding Cellnet, Securicor's communications activities recorded a loss, albeit reduced from pounds 2.4m to pounds 1.5m, on sales of pounds 61.5m, while there was a pounds 729,000 exceptional loss on the sale of Proficom, its loss-making German mobile phone service provider.

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