Big-ticket contracts await IPS Securex as global security jitters mount

Customers are clamouring for tighter security.

This year will be good to IPS Securex, as the company is in a sweet spot to capitalise on the current world climate, according to a report by RHB. IPS is well-positioned to see increased sales for the second half of FY16, as well as secure a tender to supply security solutions to Airports of Thailand (AOT)’s development plans.

RHB notes that the spate of riots around the world and the growing distrust amongst the general populace towards certain governments bolster the need for non-lethal weapons. Further, the spike in terrorist activities in the past few months has sent a wakeup call to governments to tighten security systems, especially checkpoint scanners and cargo/bagger scanners.

As such, IPS will probably enjoy a boost to profits as the company delivers at least US$13m worth of PepperBalls and US$6m worth of Hyperspike-related products in H2. 

AOT has also outlined plans to finish expansion and development works across its six airports within the next two years, and IPS will likely participate in tenders to supply AOT US Transportation Security-certified machines in the baggage and cargo scanners space. Tender results will probably be revealed this month, and RHB expects IPS to nab at least US$150m worth of tenders on this front.

RHB posits that even with an economic downturn, IPS will continue to add to its growing list of large contract sales, thereby securing strong growth for the next few years.