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Table of Contents

Executive Summary

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TABLE OF CONTENTS

1. INTRODUCTION 6

2. SUMMARY 8

3. ECONOMIC ENVIRONMENT 11

3.1 GDP 11

3.2 INFLATION & INTEREST RATES 11

3.3 INVESTMENT 12

3.4 UNEMPLOYMENT & CONSUMER SPENDING 12

4. MARKET STRUCTURE 14

4.1 MARKET BACKGROUND 14

4.2 MARKET SIZE 16

4.3 PRODUCT MIX 28

4.4 DOMESTIC/NON-DOMESTIC INSTALLATIONS 30

4.5 CCTV 39

4.6 ACCESS CONTROL 47

5. FIRE PROTECTION SYSTEMS 55

5.1 MARKET SIZE 55

5.2 HOUSEHOLD OWNERSHIP LEVELS 58

5.3 PRODUCT RANGE 60

5.4 IMPORTS & EXPORTS 66

6. SPECIFICATION AND BUYING PROCESS 69

7. DISTRIBUTION 75

7.1 CHANNELS OF DISTRIBUTION 75

7.2 MAJOR SUPPLIERS 85

8. KEY MARKET INFLUENCES 92

8.1 THE HOUSING MARKET 92

8.2 HOUSE MOVING 94

8.3 CONTRACTORS OUTPUT - INDUSTRIAL AND COMMERCIAL 95

8.4 HOUSEHOLDS 100

8.5 POPULATION AGE PROFILE 102

8.6 PERSONAL DISPOSABLE INCOME & SAVINGS RATIO 104

8.7 CRIME RATES 106

9. FUTURE PROSPECTS 109

9.1 MARKET GROWTH PROSPECTS 109

9.2 PRODUCT TRENDS 111

9.3 MARKET STRUCTURE 111

LIST OF TABLES AND CHARTS

CHART 1: SECURITY & FIRE PROTECTION MARKET 1990-2002

TABLE 2: UK SECURITY & FIRE PROTECTION SYSTEMS MARKET 1990-2002 (£M MSP)

CHART 3: VOLUME OF INSTALLATIONS OF INTRUDER ALARMS 1980-1997

TABLE 4: UK SECURITY ALARM MARKET 1990-2000 (£M RSP)

TABLE 5: UK HOUSEHOLD OWNERSHIP LEVELS OF INTRUDER ALARMS (1970-1999)

CHART 6: PRODUCT MIX BY SIGNAL TYPE 1997 (BY VOLUME)

CHART 7: UK INTRUDER ALARM MARKET - DOMESTIC/NON-DOMESTIC INSTALLATIONS 1997 BY VOLUME

CHART 8: PROFESSIONALLY & DIY FITTED INTRUDER ALARMS 1997 BY VOLUME

CHART 9: DIY FITTED ALARM MARKET - DOMESTIC APPLICATIONS 1987-1997 BY VOLUME

TABLE 10: NON-DOMESTIC INSTALLATIONS OF INTRUDER ALARM SYSTEMS 1987-1997 BY VOLUME

CHART 11: NON-DOMESTIC ALARM INSTALLATIONS BY END-USE APPLICATION AREA - 1997

TABLE 12: UK CCTV MARKET - 1990-2002 (£M AT INSTALLED PRICES)

CHART 13: COST STRUCTURE OF A TYPICAL CCTV SYSTEM 1997

CHART 14: MIX OF CCTV INSTALLATIONS BY END-USE APPLICATION AREA

TABLE 15: UK ACCESS CONTROL MARKET 1990-2002 (£M AT INSTALLED PRICES)

CHART 16: MIX OF ACCESS CONTROL SYSTEMS BY VALUE - 1997

CHART 17: MIX OF ACCESS CONTROL INSTALLATIONS BY END USE APPLICATION AREA

CHART 18: UK FIRE PROTECTION MARKET 1997 BY MAJOR PRODUCT - VALUE £M MSP

TABLE 19: HOUSEHOLD OWNERSHIP OF FIRE PROTECTION/DETECTION EQUIPMENT 1997

CHART 20: UK MARKET FOR FIRE ALARM SYSTEMS 1990-1997 (£M MSP)

TABLE 21: UK MARKET FOR FIRE EXTINGUISHING EQUIPMENT 1990-2002 (£M MSP)

TABLE 22: EXPORTS & IMPORTS OF FIRE & BURGLAR ALARMS - 1991-1996 (£M MSP)

TABLE 23: EXPORTS & IMPORTS OF FIRE EXTINGUISHERS 1992-1996 (£M MSP)

TABLE 24 RANGE OF SECURITY EQUIPMENT INSTALLED BY CONTRACTORS

TABLE 25 RANGE OF FIRE EQUIPMENT INSTALLED BY CONTRACTORS

TABLE 26 AVERAGE NUMBER OF EMPLOYEES

CHART 27: PURCHASING RESPONSIBILITY FOR FIRE AND SECURITY EQUIPMENT

CHART 28: SECURITY & FIRE DETECTION SYSTEMS MARKET STRUCTURE

TABLE 29: SOURCE OF SUPPLY FOR SECURITY AND FIRE ALARM SYSTEMS

TABLE 30: FREQUENCY OF USAGE OF ALTERNATIVE SOURCES OF SUPPLY - INTRUDER ALARM SYSTEMS

TABLE 31: FREQUENCY OF USAGE OF ALTERNATIVE SOURCES OF SUPPLY - CCTV EQUIPMENT

TABLE 32: HOUSING COMPLETIONS - GREAT BRITAIN 1988-1996

TABLE 33: NUMBER OF PROPERTY TRANSACTIONS IN ENGLAND AND WALES

TABLE 34: CONTRACTORS OUTPUT: NEW WORK AND RMI, NON HOUSING CURRENT PRICES (£M)

TABLE 35: CONTRACTORS OUTPUT NEW WORK COMMERCIAL SECTOR - CURRENT PRICES (£M)

TABLE 36: NEW ORDERS OBTAINED BY CONTRACTORS - CURRENT PRICES

TABLE 37: STOCK OF DWELLINGS UK - 1985-1995

TABLE 38: AGE DISTRIBUTION OF RESIDENT POPULATION - JUNE 1995

CHART 39: PDI & SAVINGS RATIO

TABLE 40: NOTFIABLE OFFENCES RECORDED BY THE POLICE IN ENGLAND & WALES - 1986-1996 (000'S)

TABLE 41: FEAR OF CRIME - 1996 ENGLAND AND WALES

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EXECUTIVE SUMMARY

The UK Security, CCTV and Fire Protection Systems market has seen good growth through the 1990's to a value of around £1.2 billion at manufacturers prices.

Growth during the 1990's has been mainly due to the security market which has benefited from rising crime levels in the UK, with growing public concerns over safety and security issues. In addition, the market has been boosted over the last few years by the ACPO policy regarding false alarms which has driven a significant level of replacements. However, the effects of this policy are now diminishing and growth in the intruder alarm sector is slowing down due to market maturity, with reducing potential for first time installations into the existing building stock.

Despite the implications of the ACPO policy introduction, sales of DIY alarms into the domestic sector have increased over the last few years. This has resulted from technological advances which have provided easy to install, wire-free systems at relatively low cost in comparison to professional installations.

Much of the growth in the overall security market over the last few years has been driven by the success of the CCTV and Access Control System sectors. Many of the initial concerns over CCTV usage have been allayed and its proved success in preventing crime has led to increasing usage in public places, particularly within town centres which have benefited from a degree of Government funding over the last two years.

The Access Control Systems sector has also exhibited growth due to concerns over employee safety and the need to reduce the level of opportunist theft, particularly within commercial premises. A reduction in unit prices has also widened the number of potential end use application areas. In addition, technological advances have increased the amount of information available from access control systems relating to employee movements, further enhancing the benefits.

The fire protection systems market is heavily reliant upon new construction activity due to its mature state and therefore suffered to a greater extent than the security industry from the downturn in construction during the recession. While the market has shown a return to growth, benefiting from an upturn in commercial and industrial new build, this has been limited by a relatively low level of replacements in many sectors.

Sales of smoke detectors into the domestic sector showed rapid growth during the early 1990's due to high levels of media attention. However, with penetration approaching saturation point this sector is expected to gradually decline over the next few years.

The Extinguisher and Sprinkler sector has benefited from the upturn in non-domestic construction, with sprinkler systems usually installed at the time of construction of a new building. While volume sales of extinguishers have increased over the last few years due to the requirement to replace halon based systems, the market has suffered from aggressive pricing strategies by manufacturers, particularly in the commercial sector.

The last few years have seen a major change in the structure of the Security and Fire protection systems market due to a number of significant take-overs and mergers. This has produced considerable polarisation within the market which is now dominated by a small number of large conglomerates, with smaller companies increasingly concentrated in niche product areas.

The key suppliers include ADT Fire & Security which now represents a dominate influence within the overall market following the recent merger of ADT Modern and Thorn Security. In addition, other leading companies include Williams Holdings, Menvier Swain and Shorrocks.

These companies typically compete within several market sectors and have activities ranging from manufacturing through to installation, monitoring and maintenance. Specialist distributors continue to represent the most significant route to market and have gained share at the expense of other outlets such as the Electrical Wholesalers, due to their specialist knowledge.

The professional installation of electronic alarms is undertaken by specialist contractors or electrical contractors. Many specialist contractors are members of the voluntary regulating body, NACOSS, which is increasingly specified by insurers as a condition of providing cover.

The outlook for the industry is optimistic with growth in domestic and non domestic construction likely to benefit all sectors. The security market is expected to perform well supported by good levels of growth in the CCTV and Access Control sector. In addition, technological advances should benefit both the fire and security markets, widening potential end use application areas and enabling manufacturers to add value to their products.

This comprehensive report represents a detailed assessment of the market, reviewing major trends, key factors influencing developments and future prospects for the sector. Analysis is both quantitative and qualitative, based on our substantial experience of the building and home improvement markets.

Text © 1998 AMA Research

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Last updated by Duncan Nottage 1st February 1999