Cellnet keeps Securicor on a healthy profit line

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The Independent Online
Securicor, the communications, security and parcels company, disclosed a 28 per cent jump in yearly taxable profits to £80.6m, the lion's share again flowing from Cellnet, its 40 per cent-owned mobile phone network.

Turnover was 25 per cent up at £800.3m. However, the robust contribution from the group's managed operations (BT is the 60 per cent shareholder and operator of Cellnet) impressed most company-watchers.

Patrick Hickey, an analyst at Henderson Crosthwaite, the stockbroker, said: "Although Cellnet will remain very important to Securicor,the managed businesses have done well. The managed arm now looks good." Profits this year should reach at least £103m, he predicted.

Securicor's 50.75 per cent-owned subsidiary, Security Services, advanced profits by 35 per cent to £58.4m.

While Cellnet profits rose 21 per cent to £55.9m (£46.3m), profits at the traditional security division moved ahead 32 per cent from £9.1m to £12m. The 60-year-old company began with ex-servicemen patrolling affluent areas of London on bicycles to protect properties.

Securicor now has 53 per cent of the UK cash transit market, moves 200,000 containers of foreign currency a month, and has been picking up overseas work such as advising the Colombian government on airport security. Last June the security division also began running a five-year Metropolitan Court escort and custody contract worth £96m. About 35,000 prisoner movements have been conducted so far.

Roger Wiggs, chief executive, said there was potential for Securicor in the increasing contracting out by the police of non-core services.

Securicor's parcels division made a strong profits advance from £5.7m to £9.9m. Securicor Pony Express opened the first six of 30 planned local franchise operations, while Scottish Express International, acquired at the beginning of the financial year toSeptember, opened two new English branches.

Business services, ranging from hotels to computer services, also boosted profits to £2.9m (£0.7m). An interesting indicator of apparent economic recovery was a 73 per cent leap in turnover at Securicor Recruitment Services.

Mr Wiggs said Securicor's position on its Cellnet stake was unchanged - a sale is not ruled out at the right price. Many observers believe the company will jettison its money-spinning investment to focus on managed businesses. Views differ on the timing,however.

Securicor's total dividend is 3.405p (2.961p) via a 2.6p final. The Security Services dividend is 6.537p (5.684p).