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Press Release: UK Manned Security Market Development Report

Released: September 2010

After researching the UK manned security market development and taking into account various other factors the following conclusions can be drawn from MBD's report:

Market Review 2006-2010:

In 2010, the UK market for manned security is expected to increase by a moderate 1% in nominal terms to £3296 million, partly offsetting the 3% decline recorded in 2009. Prior to that, slightly stronger annual growth of between 3% and 5% was reported in the years 2006 to 2008. The decline in 2009 is largely a reflection of the current economic downturn, which resulted in reduced demand for manned guarding services as well as for CIT services, reflecting lower retail sales and shop and bank branches closures. In 2010, the market is believed to return to growth, albeit at a moderate level, as the UK has officially moved out of recession. However, the economic recovery is expected to remain fragile for the foreseeable future, thus projections for the UK manned security market also carry a degree of uncertainty.

Prior to the recession, the value of the manned security market increased by a cumulative 9% between 2006 and 2008, reaching a peak of £3335 million in the latter year. Growth has mainly been driven by the expanding CIT and the custodial services sectors, as well as by manned security companies increasingly offering more integrated security solutions. However a stronger market development has been restricted as the UK manned security market continues to be highly competitive and margins continue to be squeezed, which has also been exacerbated by the rising costs related to licensing.

Market Forecast 2011-2015:

The value of the manned security market is anticipated to increase throughout the five year forecast period up to 2015, with annual growth levels expected to fluctuate between 2% and 4% in real terms. In 2015, the value of the market is forecast to reach £3745 million (at 2010 prices), equivalent to overall growth of 14% in real terms. However a return to stronger growth in the manned security sector is expected to be somewhat dependent on a stronger economic recovery which to-date remains fragile. Thus any forecast made under the current circumstances carry a greater level of uncertainty than would normally be the case.

The overall market development over the next five years is expected to be largely driven by the custodial/public security sectors. Indeed plans for prison reform by the coalition government are likely to result in an increased involvement of the private sector. In contrast, the manned guarding sector has reaching a level of maturity, partly reflecting increased substitution by electronic security systems. Growth in the market is also expected to be generated by the broadening and diversifying of their service offering amongst major providers, with an increasing number of larger companies offering fully integrated, seamless security solutions and with some diversifying to become fully fledged facilities management companies. Providers are also expected to continue to benefit from the trend towards outsourcing of non-core activities.

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