Those interested in value rather than gambling might consider RSG. Regulation of the security market should mean better margins going forward for the quality players in the core manned guarding business, which has had lots of cowboy competition over recent years. This forced RSG to look elsewhere for growth and it has come from facilities management, business process outsourcing and support services. Year to 4/04 saw security services t/o 209M (previous year 196M) and profit 9.1M (8.8M), with facilities management etc t/o 83M (72M) and profit 4.3M (4.3M) as investment in this side grew.

Recent trading statement suggested figures to end April 2005 should be slightly ahead of market expectations. These are due out end of June. RSG had net cash 10M as at 4/04, increased to 15M at interim stage and may well approach 25M as at 4/05. Cash boosted by sale of Safe Estates vacant premises protection business for 7.3M end of 2004 (which will also give exceptional profit over 4M in year to 4/05).

Shares took a knock last year when it was announced that they had lost an electronic tagging contract with the Government. With annual sales 18M, this ran off April 2005 and lack of renewal will impact 2005/6 results, but having followed the company for almost 20 years I am inclined to believe this was a one-off. Whilst the coming year will therefore be more difficult, other new business should go a long way to replacing it. Cash position suggests dividend over 3% will be safe and may increase.

Added spice in the fact that chairman Brian Kingham owns around 70%. Audited accounts do not give his age, but his photograph suggests succession may be on his mind. Recently appointed a new Group M/D with recent history of selling a business and Goldman Sachs appear as holder of over 3% end of May.

With market cap only 110M and business holding perhaps 25M of cash this looks an excellent value investment in growth markets with possible takeover prospects in for nothing. I bought on the bad news at end of 2004 and included these as one of my four in Erics second ASOS Challenge. Yet to really perform, but the patient should be rewarded. As always, DYOR.

Jump today - possible offer from Chairman at min 915p. With the trading strong, it would not bother me unduly if bid did not materialise, although I believe it will. Bit disappointed with the level, as I think they are worth 10 on balance sheet strength, cash generation and prospects (not least with the Olympics hovering into view). Feeling smug about post 9, nice to get a call right sometime! Hope some of the patient with appetite for quality are also benefitting from this one.

Bid right on cue at 916p. A long term quality investment, a multi bagger on original capital and good dividends along the way.Only complaint is that following their switch from main market to AIM two years ago, had to remove from PEP and now have large CGT liability to calculate. Hope some of you were in.