Bottom Line: Securicor on track

FANS OF The Bill will have been treated in last night's episode to a demonstration of Securicor Group's Datatrak electronic system for monitoring and recapturing stolen vehicles - mostly their own armoured vans, but applicable generally.

Datatrak made losses of more than pounds 4.5m last year, but Securicor's struggle to haul it into profit is typical of the efforts it has been making to improve the previously dire performance of its managed, non-Cellnet business.

In the year to 30 September these managed businesses, mainly security and parcels, managed to lift profits by 85 per cent to pounds 17.1m while the contribution from Cellnet hardly budged at pounds 46.3m.

In the medium term there is still scope for significant recovery on the non-managed side, particularly in parcels where there is a target for margins of 10 per cent against 2.4 per cent currently.

Cellnet too, where promotional spending of perhaps pounds 20m has generated a 50 per cent jump in customers but held down profits, will bounce back in 1994, suggesting another year of strong dividend growth at Securicor after a 13 per cent rise last year.

A 27 per cent rise to more than pounds 80m pre-tax seems secure and at 916p a p/e of 25 is fair value. It is fully supported by the value of the Cellnet windfall and gives little worth to the fast recovering managed businesses.