UK fire sector report outlines four drivers of organic growth

Fire sector growth drivers outlined in new report

DC Advisory and Fairgrove have published a report on how operators in the UK fire and security sector are pursuing organic growth in a competitive market.

Titled Igniting Growth: Organic Levers for UK Fire & Security Services, the report is based on interviews with CEOs of private equity-backed businesses and sets out the strategies being used to improve performance, scale operations and strengthen margins.

It says the UK fire and security sector remains highly fragmented, with more than 3,000 businesses working across active fire, passive fire and security services.

The report links continued investor interest in the sector to regulatory requirements, recurring inspection cycles and long-term service contracts that support stable revenue streams.

Recent growth is tied to regulatory change following the Grenfell Tower fire, including the Fire Safety Act 2021, Fire Safety (England) Regulations 2022 and the Building Safety Act 2022.

Those measures have increased compliance requirements and led to higher levels of inspection, remediation and maintenance activity across the built environment.

The sector is expected to grow at around 6% to 7% annually through to 2030.

Organic growth moves higher on the agenda

The report states that investors are placing greater emphasis on organic growth and operational performance, even as buy-and-build strategies remain common.

DC Advisory and Fairgrove identify four pillars behind that shift: commercial engine, commercial discipline, people model and operational leverage and productivity.

It describes increasing contract penetration and recurring revenue as central parts of current growth strategies.

Operators are focusing on cross-selling services across fire and security portfolios where appropriate.

They are also prioritising up-sell work such as remedial works and lifecycle upgrades.

The report says up-sell activity can generate between £1 and £3 of additional work for every £1 of planned maintenance activity, depending on the asset base and contract structure.

It adds that winning new business remains difficult because of high customer retention and procurement barriers, particularly in the private sector.

Service quality and long-term client relationships are presented as the main drivers of sustained growth.

Technology and workforce pressures shape performance

The report says technology is becoming a larger factor in improving operational performance without major capital investment.

Field service management platforms are being used to improve scheduling, engineer utilisation and job reporting.

Digital tools are also being used to improve response times and customer experience.

The report says some providers are starting to use more automated and self-testing systems in higher-spec installations.

That change may reduce routine maintenance workloads and increase margins through higher-value service activity.

Recruitment and retention of engineers are identified as a constraint on growth across the sector.

Companies are expanding apprenticeship programmes, recruiting from adjacent industries and investing in in-house training academies to increase workforce capacity.

Retention measures such as improved benefits and referral incentives are also being used to reduce churn and protect productivity.

The report adds that better parts management, route optimisation and technician scheduling can improve first-time fix rates, reduce unproductive time and raise jobs per engineer per day.

DC Advisory and Fairgrove say firms that pair operational discipline with technology use, workforce development and customer retention are expected to perform more strongly as the market matures.