The company has also announced the sale of its Internet security business to Baltimore Technologies, the Irish security software group.
Chubb Information Security, which protects data transferred over computer networks and the Internet, will continue to be marketed using the Chubb brand under a licence agreement.
Chubb's recently-appointed chief executive, Robert Gasparini, attributes the fall in profits to problems in the company's UK business, combined with a downturn in the Australian market.
"So far the company as a whole has failed to live up to expectations," said Gasparini. "Trading at the top of the year began well, but we needed to deliver two or three results with no negative surprises. Clearly, we haven't managed to do that." Gasparini is confident that organic growth is in the pipeline for 2001. "There's anything between £400-£500 million available over the next three years for strategic acquisitions to add to any organic growth," added Gasparini. That said, Chubb's rate of organic expansion is still some way below that of main rivals Group 4 Falck and Securitas.
Chubb's preliminary results, announced in The Financial Times (FT), also show overall sales up by 11% at £1.4 billion. Over £180 million has been invested in buy-outs – Nord Alarm in Germany and Netherlands-based electronic security concern Van den Enden among them – with strong organic growth experienced in continental Europe and the Americas. However, sales in the UK and Ireland rose by a meagre 2%.
As for the prospects of Chubb being taken over, Gasparini told SMT that he had not received any approaches as yet. "If we were to receive an approach from another security group," said Gasparini, "and it could generate cost savings, the board would have to take it seriously." Financial experts at the FT feel that Chubb is currently suffering from a credibility problem. The company has disappointed in 2000, they say – at a time when it needed to show resilience in 'breaking away' and becoming a stand-alone business.
Source
SMT
