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Securitas grows profit as demand recovers from pandemic slump

Securitas grows profit as demand recovers from pandemic slump
© Reuters. FILE PHOTO: Securitas CEO Magnus Ahlqvist poses for a picture at the company’s headquarters in Stockholm, Sweden August 14, 2017. REUTERS/Anna Ringstrom/File Photo/File Photo

STOCKHOLM (Reuters) -Security services group Securitas reported on Wednesday a rise in first-quarter profit that matched expectations helped by strong sales growth in Europe.

Operating profit rose to 1.25 billion Swedish crowns ($126.7 million) from a year-earlier 1.03 billion. Four analysts polled by Refinitiv had on average forecast a 1.25 billion crown profit.

CEO Magnus Ahlqvist said in a statement the group had passed on higher wage costs to customers in the quarter and expected to be able keep maintaining that balance.

Higher COVID-related sickness costs and spending related to labour shortages weighed on results while a pick-up in demand for airport security on the back of a recovery in travelling from the nadir hit during the pandemic gave a boost.

Sales at the Security Services Europe division grew 8% before acquisitions, while the North America unit experienced a 2% decline due to previously announced contract terminations and reduced COVID-related extra sales.

Securitas said in December it had agreed to buy U.S. rival Stanley Black & Decker (NYSE:SWK)’s electronic security solutions business for $3.2 billion in its biggest acquisition to date.

It said on Wednesday it still had the ambition to close the deal, which requires regulatory approval, towards the end of the second quarter.

Securitas in April pulled back an application for EU approval. A company spokesperson said this week the retraction was due to EU authorities needing more time to review the deal and that Securitas aimed to refile the application as soon as possible.

Shares in the world’s biggest security services group were up 2.5% at 1134 GMT.

($1 = 9.8646 Swedish crowns)

Source: Investing.com

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