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When a serious buyer opens the accounts of a fire safety business, they do not start with the profit line and they do not start with turnover. They start by splitting the revenue into two piles. On one side goes contracted recurring income; on the other, one-off project and installation work. The ratio between those two piles is the first number they model, and it shapes everything that follows.

This post explains why that split matters so much, what the ranges look like, and why attrition is the multiplier hiding underneath the mix. It expands on one of the themes in our autumn service season briefing.

Two Piles, Two Very Different Businesses

Recurring income in fire safety means the work that repeats by obligation: alarm servicing, extinguisher servicing, fire door inspection and, where it exists, monitoring. Project income means the installations and larger remedial jobs, which are valuable but which have to be won again every year.

Picture two firms with identical turnover. The first is 70 per cent recurring and 30 per cent project. The second has those proportions reversed. To a buyer these are not variations on a theme; they are different propositions. The first hands the new owner a predictable base that arrives before anyone picks up the phone. The second hands them a sales target they must hit from day one, in a business they have only just bought. The market rewards the first far more generously, even though the top line reads the same.

Two firms can turn over the same amount and be worth very different sums. The recurring mix is why.

What the Ranges Look Like

The market prices this difference plainly, though always as an observation rather than a promise for any individual business. Recurring-revenue-led fire safety firms tend to transact in the region of 3x to 7x adjusted EBITDA, with the contract-rich, well-certificated operators sitting at the upper end. Recurring fee income is often valued separately at around 0.8x to 1.5x. Where a particular business lands inside those ranges is driven far more by the quality of its recurring book than by anything said across the negotiating table.

It is worth adding one piece of context from further afield. In the United States, life-safety operators with strong recurring revenue command materially higher multiples than project-led installers. That is a different market with different conventions, and it is not a UK number, but the direction it points in is the same one the UK market follows: recurring, contracted income is the premium, project income is the discount.

Attrition Is the Multiplier

Here is the part owners most often overlook. A recurring book is only as good as its renewal rate. It is entirely possible to have a large service base that leaks contracts every year, and a buyer will find that out quickly. Expect them to probe two things: how many contracts you keep from one year to the next, and whether any single client accounts for an uncomfortable share of the total.

A book that renews reliably, spread across many commercial clients with no one contract holding the business hostage, is worth appreciably more than a book of the same headline size that churns or leans on a single large customer. Low attrition is what turns recurring revenue from a number on a page into a defensible asset. High client concentration, by contrast, is a risk a buyer prices down, because losing that one account would reshape the business overnight.

The encouraging news is that these are the figures you have the most power to improve in the twelve to twenty-four months before you go to market. Knowing your own recurring-to-project ratio, tightening your renewal rates, and broadening the client base behind the book are the three moves that most reliably lift a fire safety valuation. Best of all, you can start them long before any buyer is at the table.