By Magnus Hansson
STOCKHOLM -- Swedish security services provider Securitas /zigman2/quotes/203151739/delayed SE:SECU.B +5.89% AB Friday said it swung to a fourth-quarter net loss due to charges mainly related to its cash-handling business.
Securitas, which recently spun off and listed two units -- Securitas Systems AB and Securitas Direct AB -- said the net loss from continuing operations came in at 550 million Swedish kronor ($78.63 million), after a 556 million kronor profit a year earlier.
Revenue was down 1.7% at 15.18 billion kronor from 15.44 billion kronor. Analysts polled by SME Direkt had expected net profit of 677 million kronor and revenue of 15.35 billion kronor. Revenue from the U.S. operation declined in the fourth quarter as the need for hurricane-related security that occurred in 2005 wasn't repeated in 2006. Securitas Chief Executive Thomas Berglund told a conference call that organic revenue growth in the U.S. was 7%-8%, excluding effects from the hurricanes.
Securitas took a charge of 1.14 billion kronor related to its cash-handling business in the fourth quarter. The charge stems from a company in the United Kingdom that Securitas owns jointly with HSBC Holdings PLC and Barclays /zigman2/quotes/206581728/composite BCS +1.39% PLC. The company, Securitas Cash Management, handles cash for the two banks and is 75% owned by Securitas. Variances have been identified between the banks' accounts and those of the jointly owned company. "We have now established the variance at £61 million ($119.4 million) and have taken a corresponding charge," Mr. Berglund said.
Securitas also booked a 333 million kronor charge in the security-services operation that mainly relates to a company in Spain that it bought in 1992. The Spanish company had gone bankrupt before Securitas bought it and was involved in several litigation cases.
The charges total 1.5 billion kronor and come as Securitas is about to change management in March, with Alf Goeransson from construction company NCC /zigman2/quotes/201771072/delayed SE:NCC.A +2.67% AB taking the CEO post. Securitas also plans to list its cash-handling business Loomis separately on the Stockholm exchange in the second half of 2007. "We have wanted to clean out some outstanding matters from the history of Securitas," said Mr. Berglund, who also forecast that there will be no need for further charges in the near future.
Securitas said its board will propose a dividend of 3.10 kronor a share. After a 0.40 kronor-a-share dividend from former unit Securitas Systems is included, the payout would be unchanged from 2005.
Securitas shares were down 1% to 102.50 kronor in morning trading in Stockholm.
Write to Magnus Hansson at email@example.com