Secure bright future

Published on Friday 20 November 2009 21:20

Mortice 53.5p unchanged Scotsman says BUY

MORTICE Group is a diversified services company engaged in India, providing security, facilities management, property management, fleet management and the sale of safety equipment and its installation.

Mortice's security business was established in 1995 and is now a leader in the Indian security market. Its facility management side was only launched in 2008 but has performed well, with five million square feet under its own management, a figure increased to seven million square feet following the acquisition of Rotopower. In a trading update at the beginning of last month, Mortice confirmed that it won 38 new contracts across its subsidiaries, including Peregrine Guarding Private Limited and Tenon property services.

The Indian economy is growing rapidly, if from a relatively low base. The potential does appear exciting and Mortice looks ideally placed to participate to the full in this rate of expansion. The facility management services market is a relatively young industry and is quite fragmented but the quality of Mortice's client list is already impressive and represents an endorsement of Mortice's disciplined services.

The challenges facing the Indian economy are well recognised and include very poor logistics, a rigid caste system, a somewhat suspect political structure and a potentially unstable neighbour in Pakistan. Prospective investors must, therefore, acknowledge the risks but Mortice does look interesting. However, prospective investors should appreciate that the market is tight and patience may be required to establish a reasonable stake.

&#149 The value of your investment could fall and you may get back less than you invested. You should take professional advice if you have any doubt about the suitability of this company for your portfolio.