Crime really does pay
Crime really does pay. Just ask Ben and Joss White. Early in October the brothers, aged 40 and 39, seized nearly £100m (€125m) but stayed within the law.
The money came from the sale of their MessageLabs online message security, which counters the threat from internet crime.
This problem can only get worse as fraudsters worldwide seek to improve on the old online Nigerian scams and the like. It is also a problem that will worsen in a global downturn.
Fraudsters can operate with greater ease in panic situations with internet systems overwhelmed as customers move money around.
It is a sign of just how seriously the online security market is now regarded that the MessageLabs deal was the fi rst UK company sale this year where entrepreneur founders walked away with £100m, for a company that only turned in a profi t this year after eight years of losses.
CYBER CRIME Britain, with its long history of code breaking (think Bletchley Park and later GCHQ) is in the forefront of efforts to combat online crime.
Mike Lynch, founder of Cambridge-based Autonomy, is one of the leading entrepreneurs in the field. Autonomy shares have largely defied the recent downturn and Lynch has a bulging order book for Autonomy’s compliance-related software.
It discovered inconsistencies in the dealing records of Jérôme Kerviel, the trader at Société Générale allegedly behind the bank’s €4.9bn loss. Lynch’s stake in Autonomy is worth £164m.
Oxford also has its share of anti-virus and computer security boffins. Around 35 million customers in 150 countries rely on Sophos anti-virus software to keep hackers at bay. Sophos was founded in 1985 by Jan Hruska and Peter Lammer, who met at Oxford as graduates. It was tough going at first and by 1987 they were seriously considering moving into importing crockery from Italy or trading coal and soda ash.
But they persevered and Sophos became one of the world leaders in developing anti-virus software. The business had been preparing for a £325m flotation late last year, valuing the two founders’ share stakes at £113m.
The bearish sentiment in the stock market led to the float being pulled. But its time will come again. Physical crime is also expected to rise sharply to the benefit of Kensington-based Banhams Patent Locks.
The family-owned operation was founded in 1926 when W F Banham invented the first automatic door bolt. It now offers a complete burglary prevention service.
Even before the credit crunch, Banhams was doing a roaring trade with record £4.3m profit on £23.5m sales in 2006. Banhams should be worth £40m, in today’s fearful climate.
Recession should hold no worries for Brian Kingham, who founded his Reliance Security operation in the teeth of the 1974 downturn. Shrewdly he took the Uxbridge-based group private in a £197m deal in the summer of 2007 just before the credit crunch broke.
Reliance can expect a surge in work guarding property but also in directly combating crime: it is best known for its £126m Scottish prisoner escort service.
That kind of work is unlikely to disappear in the current climate.
CCTV Helping catch the criminals that Reliance guards is the job of Michael Newton’s Anglo Design operation based in Cheshire. Newton is Britain’s “king of CCTV”.
As the UK is one of the most watched populations in the world with at least 1.5 million cameras in public places, he has a huge potential market. A computer sciences graduate with a penchant for racing sports cars at the Le Mans 24-hour race, Newton has invested in new technology and turned down offers of up to £400m for his business.
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