Some of its core businesses now:
1. Security printing- printing of valuable items such as cheques and parking coupons.
2. Security guarding
3. Homeland security
Moving forward, Secura will be looking at several sources of growth:
1.Build market share in guarding business
2.Expanding homeland security
3.Expanding cyber security segments
Here's what I think about this company:
Profitable segments:
1. Security guarding:
Right now, I only know of CISCO providing trained security guards. It seems that there is growing demand in this area especially when there are so many new condos/commercial properties/industrial properties popping up in Singapore. Looking at the revenue growth of Secura, its security guarding business is doing very well and sees a jump of 68% from FY2013 to FY2014.
My 'concerned' segments:
1.Security printing services:
This was their core business when they started out in 1976. However, the printing industry in general seems to be declining in profitability. Much of printing has been replaced through the advance technology of computerization, internet and digitalization.
It is no wonder why companies like Interplex sees its Imaging and Printing product sector declining by 24% against 1Q2015 due to changing consumer preference for digital media.
Even Fuji Xerox, the world's largest printer company, seeks to earn more by encouraging less printing.
2.Cyber Security solutions:
It is a big industry with a lot of business opportunities out there.
However, IT business in Singapore is VERY competitive. Just take a look at Street Directory. A search of 'IT Companies in Singapore' will give you 259 companies.
Majority of these companies are able to provide some form of cyber security solutions.
I have not even talk about the big boys like IBM/HP/Microsoft, which provides more comprehensive cyber security solutions to bigger companies.
I think that a good business is sustainable when entry of competitors to the same business is difficult/capital intensive, or you have a very distinct competitive advantage.
Therefore, I do not think that Secura can yield very good results in its Cyber Security segment, at least not in the next few years.
Conclusion:
At this moment, I will not invest in Secura as I am skeptical of its Security Printing and Cyber Security segments for future growth.
I will wait till it release its first financial result and study how well it manages its Security guarding business first.
