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Originally posted by supafly
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Coverage from Argonaunt on this one as per below. Looks a no brainer with more acquisition announcements to come.Quick Read View | Positive Security system monitoring a growing segment: The $6.3b security industry in Australia is mature, competitive, highly fragmented, and underpinned by an increasingly security conscious society. However, within the industry we expect an escalating trend away from labour intensive industry segments (guards and patrols) toward technology intensive segments like security system monitoring.Significant operating leverage: Threat Protect, with its existing A1-graded control room, is poised to take advantage of the technology trend and industry consolidation via a targeted acquisitive growth strategy. After completion of two pending acquisitions which are under option, Threat Protect will have ~20,000 monitored lines, still well below the control room’s ~100,000 line capacity. As new clients add little to costs, our modelling indicates significant potential margin and earnings expansion beyond the breakeven level of ~10,000 lines.Mobile App a differentiator: Threat Protect has developed a Personal Duress App for mobile devices that will allow the user to activate a GPS-tracked duress alarm from anywhere in the world on any mobile network. A mobile security option integrated with the control room, and which could potentially be bundled with other security or home technology products, may prove an attractive differentiator in a competitive industry.Experience: The founders of the business have considerable industry knowledge and expertise. In our view, their energy and drive to execute the acquisition strategy is critical to Threat Protect’s future success. They have the incentive to do so having retained a meaningful stake post the capital raise.Recommendation
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