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Securitas Q3 profit jumps but says outlook uncertain

FILE PHOTO: Securitas CEO Ahlqvist poses for a picture in Stockholm

By Anna Ringstrom and Marie Mannes

STOCKHOLM (Reuters) -Sweden's Securitas, which recently bought Stanley Black & Decker's electronic security division, reported a jump in third-quarter profit on Tuesday on the back of strong sales growth and price increases.

Chief Executive Magnus Ahlqvist said demand remained robust in the quarter but warned of global uncertainty, without elaborating further.

"We are facing a global environment with increasing uncertainty and we are, as always, continuously working to ensure preparedness and strength also in more challenging times," he said in a statement.

Operating profit at the world's biggest listed security services provider grew 26% from a year earlier to 1.76 billion crowns ($162 million) on turnover growth before acquisitions of 7%.

Securitas, whose services range from manned guarding and electronic surveillance to airport security, said all its divisions grew, helped by high price increases and good momentum for technology based services. The previously struggling North America division returned to growth.

The group in July bought Stanley Security for $3.2 billion in its biggest acquisition to date, bringing back activities it had floated as a standalone business in 2006 and that Stanley Black & Decker later took over.

It on Tuesday estimated that the repurchased business had mid-single-digit organic sales growth in the quarter.

Securitas, which employs around 345,000 people, has for years been pushing to grow electronic security services as a share of sales, reducing its dependence on lower-margin staff-intensive guarding.

Pareto analyst Stefan Ward said quarterly results beat his forecasts and Securitas would probably weather the economic downturn relatively well, partly because demand for security is not cyclical.

"And so far they've been able to offset salary increases with price increases, and in a tougher environment I expect it will be even easier for them to protect margins," he added.

Shares in the group, whose biggest competitor is privately held U.S. group Allied Universal after it bought G4S last year, were up 2% at 1316 GMT, taking a year-to-date drop to 8%.

($1 = 10.8464 Swedish crowns)

(Reporting by Anna Ringstrom, editing by Terje Solsvik and Bernadette Baum)