Sectorguard is a rapidly expanding company (huge increases in turnover, profits and net assets) and despite this the share price has stayed around the 2.75p level. The shares are bound to rise (in my opinion) but when? Does anyone have any opinions?

Will do - cheers ramraid.

Now rising steadily but surely (the best way) - plenty more to come folks.

Prelims on 12th Jan - not long to go.

We should see a very healthy rise from SGD in the next week, given the previous SP buy note.

Posted by Cockneyron on ADVFN from watshot.

SectorGuard - a little 'penny stock' with big potential

Next Tuesday David Marks, boss of SectorGuard (SGD) *, the AIM listed specialist manned security providers, will be announcing his group's final results for the year to end September 2003. We already know that they will be good because Marks informed his shareholders just that in a Trading Update issued on 1st October last year.

Since then his Group's shares have risen in price from 30% to 4.125p. On the face of it you might think that we have missed the boat - however I say think again. Operating as it does in the highly rated support services sector this group's shares should be trading on between 15 to 18 times historic earnings, giving it a 5.5p to 6.5p price range. Ahead of next week's results and accompanying statement I reckon that the shares look undervalued and are worth buying.

David Marks founded SectorGuard in 1998 to satisfy the growing market demand for a security service provider that placed equal emphasis on security and service. As a Chartered Accountant with a successful track record in the facilities management sector, David sought to bring a high level of professionalism to all aspects of the business in this highly fragmented area.

Since 1998 the business has expanded steadily through organic growth and by following a careful acquisition programme. Today it employs in excess of 700 security officers at a number of sites throughout the UK. The Group works on long term contracts for some of the largest companies in the country, as well as many local authorities and educational establishments, often at multiple sites. It prides itself on building long-term relationships mainly through a stable, highly trained and reliable workforce and a very pro-active approach to client liaison.

In March 2002 the Group's shares were floated on AIM, raising 570,000 and valuing the business at 2.7 million. Subsequently it has completed a number of acquisitions which are listed below in chronological order;

June 2002 - the acquisition of the manned guarding, mobile patrol and keyholding contracts of Olympic Security Services

January 2003 - the acquisition of the manned guarding contracts of Gainsborough Events Security Services
March 2003 - the acquisition of the manned guarding contracts of the Southern Division of UK Guarding Services
April 2003 - the acquisition of the manned guarding, mobile patrol and keyholding contracts of London Alliance Contract Services , and in
June 2003 - the acquisition of the manned guarding contracts of First Response Security
SectorGuard has become one of the fastest growing business in its sector, developing strongly through a combination of organic growth complemented by strategic acquisitions. It supplies manned guarding, mobile patrols, key holding, alarm response and electronic security services. Contracts include top names such as Shell International, Canary Wharf Development, Oxford Brookes University, the London Borough of Brent, CGNU and Sun Life.

At the beginning of last October David Marks' group issued a Trading Update relating to the Company's 30th September year-end and highlighting its recent successes and growth strategy.

" The Company has continued its successful strategy of combining organic growth with expansion by acquisition and is enjoying strong trading. The increase in the critical mass of the business as well as the benefits we have derived from economies of scale will be reflected in our year end results, which are expected to be published in January.

SectorGuard has developed particular expertise in the education sector and during the course of the year has added Birkbeck College, Brunel University, Henley College, Henley Management College, The School of Oriental and African Studies and University College London to its client list. Longer-term clients include East Berkshire College, Guildford College and Regents College.

The growth in the education sector is in addition to steady growth, particularly through acquisition, in other industry sectors.

SectorGuard has an extensive client base with a strong presence in London and the Home Counties and has extended its geographical coverage to the Midlands and the South Coast of England. The Company will be looking to build on these operations in the coming year.

Since the beginning of the calendar year, SectorGuard has completed and integrated four acquisitions: the manned guarding contracts of Gainsborough Events & Security Services Limited in January; the London division of UK Guarding Services Ltd in March; the manned guarding business of London Alliance Contract Services Ltd in April; and First Response Security Services Limited in June. It is currently in negotiations with a further three potential acquisition targets.

SectorGuard has extensive cash resources available for both working capital and potentially to finance acquisitions.

In an analysis of the top 50 UK manned guarding businesses, financial analyst Plimsoll Publishing Ltd placed SectorGuard 24th in size and 8th in profitability.

SectorGuard believes its continued success is largely due to the efforts of its staff, which now number in excess of 700, and has continued its investment in staff development and training. The Company believes in the value of all employees being stakeholders in the future of the business, and in March this year made a second distribution of share options to all employees.

The Board looks forward to reporting on its progress in greater detail in this year's financial report."

It is that financial report that I look forward to next week. In an eight- page research note on the Company issued two months ago analyst Alan Matthews at brokers Seymour Pierce initiated his coverage. He concluded that the shares were on an undemanding rating.

"SectorGuard, the manned guarding security services company, has provided a positive trading update regarding its year to 30th September 2003. We see this business as one of the more interesting young support services companies, with an opportunity through a combination of organic and acquisitive growth to develop a meaningful support services business. Economies of scale for the business are very favourable."

Matthews also stated that SectorGuard's market is fragmented with plenty of opportunity to buy businesses, whilst reckoning that the recent acquisitions have provided critical mass and added to the growth profile. His profit estimates, which I table below, help to identify the shares as undervalued and very capable of being swiftly re- rated.

Year to end
September Turnover m Pre-Tax Profit m Earnings Per
Share Estimated PE Ratio
2002 A 7.4 0.6 0.38p 10.85
2003 E 11.5 0.9 0.36p 11.45
2004 E 17.0 1.1 0.40p 10.31

As I stated earlier at 4.125p SectorGuard's shares are undervalued and capable of a significant re-assessment upwards, perhaps next Tuesday's results announcement will attract fresh investor interest and get that process underway. Considering it is still early days in the development of this group it shares really should be valued a lot higher than they are currently.

Taking a one-year view I am confident that SectorGuard shares will outperform the market. Buying today is a cheap way into what should prove to be a real growth story.

Target Price by end 2004 of 7p, Stop Loss at 3p

(FT AIM - market capitalisation 8.5 million - 4 market makers in up to 50,000 shares)

We now seem to have two threads on this one both with the same info!! Lets hope the share price doubles up in the same way.

Sorry janus just went to the first thread in the list.Results out on Monday.

Only had a quick scan but these results look pretty good http://www.uk-wire.com/cgi-bin/articles/200401120700060815U.html

15 Jan'04

SectorGuard (AIM:SGD) 4.5p BUY

Manned guarding is a buzz phrase at the moment, thanks to President Bushs desire to put sky marshals on transatlantic flights, but for SectorGuard, it is business as usual.

Chief executive David Marks remains committed to keeping out of aeroplanes and airports, seeing more sustainable and higher returns elsewhere.

Marks is instead focusing on a three-pronged approach; targeting education, local authorities and residential guarding. In the education sector, his company already lists a string of successes, including contracts with Oxford Brookes University, Birkbeck College, the School of Oriental and African Studies and Henley Management College.

Following three years of negotiation, SectorGuard recently won preferred supplier status to the London Universities Procurement Service, which acts as a buyer for all the colleges within the capital.

SectorGuard now has a standard contract in place for all London colleges, ensuring that the negotiation phase is quicker, and that the company can be in there earning money faster.

Residential guarding, although very much a new idea in this country, has worked well in the US and has transferred to certain parts of the UK with relative ease.

The companys flagship scheme is in Hadley Wood in north London, where residents banded together following a spate of serious attacks. Marks explains that his guards act as on-site protection, working together with local police to ensure residents are safe.

More residents groups are starting to see the benefits of having security guards in the vicinity, and SectorGuard is well-placed to take advantage. Similarly, moves by local authorities to put street wardens on the beat and back up local police are working well in a number of London boroughs, where SectorGuard has existing relationships for building and estate protection.

The company recently released full-year profit figures showing pre-tax profits of 741,621 against half a million last year, together with healthy earnings. Marks made four acquisitions in the year to September, and the companys share capital is now twice the size it was at float. But the market capitalisation has grown from 5 million to 9.5 million.

Further acquisitions are in the pipeline and Marks has mooted the suggestion of a tie-up between SectorGuard and his privately-held SectorAlarm company, of which he and his family own 42%.

SectorAlarm would provide a good fit by providing electronic and CCTV security systems to manned guarding clients and vice versa. Marks has said he will abstain from any such decision, however, given his obvious interest in both companies. Watch this space.

Statistics

BUSINESS: Manned security.

Vital stats:
Market capitalisation: 9.5 million
Historic PE: 13.2
Prospective PE for 2004: 11.88
Prospective PE for 2005: 10.80
No dividend

from share mag

plenty of buyers around check them out and look good value at this level

And the warrants are moving.

bit of profit taking today 5x 100000 selers going thru has any sentiment changed ??? should we be worried ??

No! The accounts speak for themselves (T/O up 73% and retained profit up 53%).

Plus...There's lots more action to come.

Stick with these guys and you'll be well rewarded.

Have you seen the Independent article ?

http://money.independent.co.uk/personal_finance/invest_save/story.jsp?story=481815

'Forget the space-age gadgets. Use human security guards'
17 January 2004
Protecting people and chattels in this increasingly violent, ill-tempered age has, not surprisingly, become a high- profile growth industry. And it is not just obvious terrorist targets, such as airports, where security is required. An army of unofficial PC Plods patrols many sites regarded as vulnerable. Even schools, in my younger days left unoccupied once the elderly part-time caretaker had left for home, now feel the need to embrace this burgeoning branch of the support services business.

In the perennial war against crime and terrorism, the most sophisticated space-age gadgets are available. But security guards, in vehicles or on foot, are still essential and have never been busier.

The stock market already recognises the ability of the big security players such as Rentokil Initial, still best known as the royal rat-catcher, and Securicor. But lurking on the undercard, with a capitalisation of just 6.7m, is a company that is taking full advantage of the security boom. SectorGuard is among the smallest members of the quoted contingent but it is ambitious and achieving the sort of progress which indicates its shares could be worth accumulating.

This week it unlocked year's profits of 742,000 against 502,000 the year before. Further progress, perhaps to near 1m, should be possible this year. SectorGuard is ignoring the hi-tech electronic side of the security industry and sticking with its 670 security guards. With some 2,000 manned security firms, many little more than one man and his dog-type operations, dotted around the country, the SectorGuard chief executive David Marks is convinced there is plenty of opportunities for expansion.

Last year he put through four smallish deals and more are in the pipeline. As the industry, like so many others, is clamped in a growing regulatory environment, the desire of many of the smaller players to remain in what is becoming an increasingly tough game must be evaporating. There are also opportunities for organic growth. Last year the group captured new contracts.

Some were for education centres. SectorGuard now has such establishments as Birkbeck College, London, Brunel University and the Henley Management College on its books. All told, it takes in more than 50 schools and other seats of learning. Residential protection is another growth area.

Many security groups, including SectorGuard, are happy to offer the sort of service so many police forces fail lamentably to provide. Patrolling estates, where the residents are rich enough to pay for the service, and providing various forms of community policing, at, of course, a price, are becoming a major part of the security industry.

It would be foolish to pretend that SectorGuard has been hiding its light under a bushel. Its shares, not too long ago 1.75p, are 4p, down from a 4.75p peak. But, if the group continues to forge ahead, they still look cheap. Dividend payments are unlikely, with available cash earmarked for acquisitions. Mr Marks, a 43-year-old accountant, is not keen to surrender equity for expansion.

He started the operation in 1998 and has 18.3 per cent of the capital. An electronic security company, SectorAlarm, is also under his leadership. The two have a close working relationship and I would not be at all surprised if in the next year or so a merger is arranged.

But SectorGuard itself could be taken over. As an accountant, Mr Marks believes every business has its price. And I believe an offer must be a distinct possibility. With many service companies anxious to add manned guarding to their activities, it is possible his single-minded approach actually adds to SectorGuard's attractions.

its only a matter of time before this secret gets out too lowly rated

After big sells and a fall early in the week, this share has crept back up to the level it started the week at (5p), so hopefully it can carry this through to next week (as long as all the profit takers have sold up). I'm expecting the share to be at the least at the 5.5p level by this time next week.

I don't think the short term movement is anything like as interesting as the underlying fundamentals. Sectorguard are well placed to grow over the next 3+ years. A great example of a growth stock. Below 2.5p it was unnoticed, during the last year is has just started to be picked up on the radar screens. I think the wise money will get in below 10p and the rest is speculation but it could be a real flyer in future. IMHO

I have to agree Prophet, the company (ie. profts growth and cash) and management are looking very strong at the moment and they are in a growth market - what more could a growth investor wish for?. Anyone in at this level stands to make a substantial amount of profit within the 2-3 year timescale.

Wilco, good going to reach 5.5p on the first day eh?

It's very difficult to predict where this one will be in couple of months time, never mind at the end of the year. I have a feeling that we're not far away from some serious money piling in.

Latest from Investtech.com:

"SGD - Positive Candidate (Short term) - Jan 30, 2004

Has risen 78% since the bottom on 21 Oct 2003 at 3.00p. Has broken the rising trend up, which indicates an even stronger rising rate. Positive volume balance strengthens the stock further in the short term. The stock has support at 4.00p."

not going so well today ???