Plimsoll predicts impact of falling sales in UK guarding sector

17 Nov 08

Industry analyst Plimsoll has published a guide to help managers understand the impact of a 30% drop in sales for guarding companies.

The results of the Recession Edition Report show that, rather bizarrely, for many companies a fall in sales would actually be good news. These firms would make more profit, be able to reduce their debts and it would put many on to a solid financial footing – a platform on which to prosper when business conditions normalise.

The latest Recession Edition Report highlights the fact that:

32 companies would make more profit on 30% less sales by implementing major costs reductions.
57 firms will struggle to cope as rising debts hamper their survival options
Several companies could see staff numbers reduce by 40% as costs come in line with sales – up to 1,200 more jobs could be at risk
73 cash rich companies are in a strong position to weather the economic storm, giving them more time to adjust their business models

Survival year strategy

Within the Recession Edition Report, each of the 325 companies targeted has been given a survival year strategy. Included with this is a targeted set of Key Performance Indicators for productivity, debts, profitability and cash flow. A full graphical analysis highlights the changes each company must make to minimise the effect of the falling sales.

Speaking about Plimsoll’s latest research, David Pattison – senior analyst who saw how security guarding companies coped through the last recession – commented: “Companies need to act now if they are going to weather this storm. As unpopular as job losses and cost reductions may be, businesses will have little choice. What we have been able to show in our work is that failure is avoidable, as long as the necessary changes are implemented without delay.”