Sectorguard are a small AIM listed company who are aggressively taking on new security buisness. Strategy looks promising. Worth a look. If anybody has a view would welcome comments?

Since my last post the shares have moved forward from 1.95p to 2.5p. Any move is a big one at these levels, up or down, but I think this one is on the way up. IMHO

Interim results out today confirm continued progress. Share price likely to rise further?

Talikng to myself I know but the price did go up a further 0.25p to 3p today.

Looks like chart is moving out of a 'double bottom', should be up from here on in.

the security industry is thriving at the moment but there is a potential problem on the way regarding the 48hr week if the eu push this through and britain has to sign up,it could de-stabalise the industry ie most guards work 60 hour week,so more guards would have to be found and that will not be easy,and of course tenants will have increased costs,which could mean less pay for guards,as a supervisor i work in the city and i already have a big turnover with guards and blow outs for that matter,however i would prefer a 48 hour week

Well the price continues to head north.

Chart looks very promising on this one - I bought a few today and expect to see large gains in the short/medium term.

This share is up 78% since I posted in April. I think there is a lot more to come as international terrorism will continue to worry companies in the economic upturn. Still lots of growth potential over the next few years. DYOR

Well SGD continues to deliver. Over 100% since April and the results due out shortly should make for very good reading indeed.

8th Jan 04

From "watshot" this morning

In case you're not a subscriber




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)

Results definitely out on monday, so you have 2 hours to get in.

Well the good news continues. Up 140% and still climbing!! Loads more to come.

plenty of volume will hopefully keep it moving north in yesterday based on
shares magazine article

Nice little tick up. Sectorguard is going to rise through this year as investors pick up on the story to date.

Question - does anyone know the debt situation at the firm currently?
Read an article a while back and that struck me as the main concern...

See the following article (debt isn't of concern):

http://www.hemscott.co.uk/hstoday/focus_2004/SectorGuard_12_1_2004.htm

Up another 2.5% today.

I reckon SGD are going to tick up steadily throughout the year with surges coinciding with further acquisitions.

The possibility of a tie in with David Marks' private company is likely to become more prominent as SGD grows.

In digging out the debt details I didn't properly read the hemscott article - typical financial journalese - In one breath quoting the excellent bottom line results "Pre-tax profits jumped 48% to 742,000 on sales 73% higher at 12.8m." and in the next breath saying that the current price looks high enough. Talk about hedging your bets!

tend to agree with previous post but newflow might be a problem

agree with previous posters newflow will be the issue need more exposure