RNS Number : 0585N
London Security PLC
27 September 2021
London Security PLC
(the "Group" or "Company")
Interim Results for the Six Months Ended 30 June 2021
Chairman's Statement
J.G. Murray, Chairman
Financial Highlights
• Revenue £82.7m (2020: £67.2m)
• Operating profit £12.3m (2020: £7.6m)
• Earnings per share 75.6p (2020: 39.9p)
TRADING
The financial highlights illustrate that the Group's revenue increased by £15.5 million (23.1%) to £82.7 million.
Operating profit increased by £4.7 million (61.8%) to £12.3 million.
Earnings per share increased by 35.7p (89.5%) to 75.6p.
The period under review reflects the impact from the coronavirus outbreak, which significantly impacted all the countries in which we operate in quarter 1 and quarter 2 of 2020. In 2021 there has largely been a return to normality in our business although some customers remain closed and there are still some restrictions on our operations to help reduce transmission. We must be prepared for further disruption should further waves materialise in any of the countries in which we operate.
ACQUISITIONS
In the six months to the end of June, the Group made four acquisitions. It remains a principal aim of the Group to grow through acquisition. Acquisitions are being sought throughout Europe and the Group will invest where an adequate return is envisaged by the Board.
CASH AND FINANCING
The Group's cash balance as at 30 June 2021 was £43.7 million. This is an increase of £6.2 million on the 31 December 2020 balance of £37.5 million.
In May 2018 the Group entered into a five year multi-currency facility until 2023 comprising £3.15 million and €8.40 million. To limit our exposure to increasing interest rates these loans are subject to interest rate caps of 1.5% LIBOR on the Sterling loan and 0.25% EURIBOR on the Euro loan.
PROSPECTS
As the situation continues, cash management will be a key consideration; the London Security Group has a healthy balance sheet, strong cash reserves and a track record for good cash generation. The Board therefore considers that with its strong balance sheet and material net cash position the Group is well placed to prosper from the rebound in the economy as the vaccine programmes gain momentum in 2021.
DIVIDENDS
A final dividend in respect of 2020 of £0.40 per ordinary share was paid to shareholders on 9 July 2021.
J.G. Murray
Chairman
27 September 2021
Consolidated income statement
for the six months ended 30 June 2021
Unaudited
Unaudited
Audited
six months
six months
year
ended
ended
ended
30 June
30 June
31 December
2021
2020
2020
Note
£'000
£'000
£'000
Revenue
82,739
67,164
152,723
Cost of sales
(21,601)
(16,452)
(37,387)
Gross profit
61,138
50,712
115,336
Distribution costs
(30,188)
(26,310)
(56,281)
Administrative expenses
(18,670)
(16,768)
(34,355)
Operating profit
12,280
7,634
24,700
EBITDA[*]
16,799
11,951
33,547
Depreciation and amortisation
(4,519)
(4,317)
(8,847)
Operating profit
12,280
7,634
24,700
Finance income
21
21
78
Finance costs
(99)
(96)
(201)
Finance costs - net
(78)
(75)
(123)
Profit before income tax
12,202
7,559
24,577
Income tax expense
(2,862)
(2,602)
(6,536)
Profit for the period
9,340
4,957
18,041
Profit is attributable to
Equity shareholders of the Company
9,267
4,895
17,853
Non-controlling interest
73
62
188
9,340
4,957
18,041
Earnings per share
Basic and diluted
3
75.6p
39.9p
145.6p
Dividends
Dividends paid per share
Nil
Nil
60p
* Earnings before interest, taxation, depreciation, amortisation and impairment charges.
The above are all as a result of continuing operations.
Consolidated statement of comprehensive income
for the six months ended 30 June 2021
Unaudited
Unaudited
Audited
six months
six months
year
ended
ended
ended
30 June
30 June
31 December
2021
2020
2020
£'000
£'000
£'000
Profit for the financial period
9,340
4,957
18,041
Other comprehensive income/(expense):
Items that will not be reclassified subsequently to profit or loss:
- currency translation differences on foreign operation consolidation, net of tax
(2,679)
3,196
2,396
- actuarial gain recognised in the Nu-Swift pension scheme
-
-
(4,554)
- movement on deferred tax relating to the Nu-Swift pension scheme
-
-
1,594
- actuarial loss recognised in the Ansul pension scheme
-
-
(17)
- movement on deferred tax relating to the Ansul pension scheme
-
-
5
Other comprehensive income for the period, net of tax
(2,679)
3,196
(576)
Total comprehensive income for the period
6,661
8,153
17,653
Consolidated statement of changes in equity
for the six months ended 30 June 2021
Share
Share
Capital
Merger
Other
Retained
Non-controlling
capital
premium
redemption
reserve
reserve
earnings
interest
Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
At 1 January 2020
123
344
1
2,033
6,442
106,882
349
116,174
Comprehensive income for the period:
- profit for the period
-
-
-
-
-
4,895
62
4,957
- exchange adjustments
-
-
-
-
3,196
-
-
3,196
Total comprehensive income for the period
-
-
-
-
3,196
4,895
62
8,153
Distribution to non-controlling interest
-
-
-
-
-
-
(159)
(159)
At 30 June 2020
123
344
1
2,033
9,638
111,777
252
124,168
Comprehensive income for the period:
- profit for the period
-
-
-
-
-
12,958
126
13,084
- exchange adjustments
-
-
-
-
(800)
-
-
(800)
- actuarial loss on pension schemes
-
-
-
-
-
(4,571)
-
(4,571)
- movement on deferred tax relating to pension schemes
-
-
-
-
-
1,599
-
1,599
Total comprehensive income for the period
-
-
-
-
(800)
9,986
126
9,312
Contributions by and distributions to owners of the Company:
- dividends
-
-
-
-
-
(7,356)
-
(7,356)
Distribution to non-controlling interest
-
-
-
-
-
-
(1)
(1)
At 31 December 2020
123
344
1
2,033
8,838
114,407
377
126,123
Comprehensive income for the period:
- profit for the period
-
-
-
-
-
9,267
73
9,340
- exchange adjustments
-
-
-
-
(2,679)
-
-
(2,679)
Total comprehensive income for the period
-
-
-
-
(2,679)
9,267
73
6,661
Distribution to non-controlling interest
-
-
-
-
-
-
(28)
(28)
Reduction in non-controlling interest
--
-
-
-
-
(123)
(103)
(226)
At 30 June 2021
123
344
1
2,033
6,159
123,551
319
132,530
Consolidated statement of financial position
as at 30 June 2021
Unaudited
Unaudited
Audited
as at
as at
as at
30 June
30 June
31 December
2021
2020
2020
£'000
£'000
£'000
Assets
Non-current assets
Property, plant and equipment
13,634
13,308
13,046
Right-of-use assets
3,223
2,382
3,254
Intangible assets
66,009
67,502
66,311
Deferred tax asset
799
779
790
Retirement benefit surplus
445
4,959
445
84,110
88,930
83,846
Current assets
Inventories
15,861
15,182
14,953
Trade and other receivables
30,415
32,499
33,174
Cash and cash equivalents
43,678
34,422
37,456
89,954
82,103
85,583
Total assets
174,064
171,033
169,429
Liabilities
Current liabilities
Trade and other payables
(27,110)
(29,119)
(27,582)
Income tax liabilities
(2,300)
(2,311)
(2,074)
Borrowings
(2,397)
(2,139)
(2,518)
Lease liabilities
(1,376)
(1,169)
(1,451)
Provision for liabilities and charges
-
-
(16)
(33,183)
(34,738)
(33,641)
Non-current liabilities
Trade and other payables
(923)
(1,275)
(941)
Borrowings
(2,051)
(4,270)
(3,170)
Lease liabilities
(1,851)
(1,209)
(1,851)
Derivative financial instruments
(28)
(43)
(36)
Deferred income tax liabilities
(1,081)
(2,873)
(1,146)
Retirement benefit obligations
(2,249)
(2,282)
(2,349)
Provision for liabilities and charges
(168)
(175)
(172)
(8,351)
(12,127)
(9,665)
Total liabilities
(41,534)
(46,865)
(43,306)
Net assets
132,530
124,168
126,123
Shareholders' equity
Ordinary shares
123
123
123
Share premium
344
344
344
Capital redemption reserve
1
1
1
Merger reserve
2,033
2,033
2,033
Other reserves
6,159
9,638
8,838
Retained earnings
123,551
111,777
114,407
Equity attributable to owners of the Parent Company
132,211
123,916
125,746
Non-controlling interest
319
252
377
Total equity
132,530
124,168
126,123
Consolidated statement of cash flow
for the six months ended 30 June 2021
Unaudited
Unaudited
Audited
six months
six months
year
ended
ended
ended
30 June
30 June
31 December
2021
2020
2020
£'000
£'000
£'000
Cash flows from operating activities
Cash generated from operations
20,342
12,319
32,862
Interest paid
(61)
(66)
(118)
Income tax paid
(4,687)
(2,323)
(5,524)
Net cash generated from operating activities
15,594
9,930
27,220
Cash flows from investing activities
Acquisition of subsidiary undertakings
(1,496)
-
(516)
Purchases of property, plant and equipment
(2,977)
(2,344)
(5,063)
Proceeds from sale of property, plant and equipment
384
137
462
Purchases of intangible assets
(1,644)
(969)
(1,244)
Interest received
13
17
27
Net cash used in investing activities
(5,720)
(3,159)
(6,334)
Cash flows from financing activities
Repayments of borrowings
(1,071)
(1,015)
(2,121)
Payment of lease liabilities
(1,097)
(987)
(2,036)
Dividends paid to Company's shareholders
-
-
(7,356)
Distribution to non-controlling interest
(28)
(159)
(160)
Net cash used in financing activities
(2,196)
(2,161)
(11,673)
Net increase in cash in the period
7,678
4,610
9,213
Cash and cash equivalents at the beginning of the period
37,456
27,143
27,143
Effects of exchange rates on cash and cash equivalents
(1,456)
2,669
1,100
Cash and cash equivalents at the end of the period
43,678
34,422
37,456
Notes to the financial statements
for the six months ended 30 June 2021
1 Nature of information
The financial information contained in this Interim Statement has been neither audited nor reviewed by the auditors and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial information for the six months ended 30 June 2021 has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 December 2020. The principal risks and uncertainties as disclosed in the year end accounts are considered to be consistent with those that are still applicable now.
Comparative figures for the year ended 31 December 2020 have been extracted from the statutory accounts for the year ended 31 December 2020, which have been delivered to the Registrar of Companies. The Independent Auditors' Report on those accounts was unqualified and did not contain an emphasis of matter paragraph or any statement under Section 498 of the Companies Act 2006.
2 Basis of preparation
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and income and expense. Actual results may differ from these estimates.
3 Earnings per share
The calculation of basic earnings per ordinary share is based on the profit on ordinary activities after taxation of £9,267,000 (2020: £4,895,000) and on 12,261,477 (2020: 12,261,477) ordinary shares, being the weighted average number of ordinary shares in issue during the period.
For diluted earnings per ordinary share, the weighted average number of shares in issue is adjusted to assume conversion of all potentially dilutive ordinary shares. There was no difference in the weighted average number of shares used for the calculation of basic and diluted earnings per share as there are no potentially dilutive shares outstanding.
Unaudited
Unaudited
Audited
six months
six months
year
ended
ended
ended
30 June
30 June
31 December
2021
2020
2020
£'000
£'000
£'000
Profit on ordinary activities after taxation
9,267
4,895
17,853
Basic earnings per ordinary share
75.6p
39.9p
145.6p
4 Actuarial valuation of the pension scheme
As permitted under IAS 19 the Group has not prepared an actuarial valuation of the pension scheme assets and liabilities for the Interim Statement 2021. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2021.
The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No. 596/2014, and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.
For further information, please contact:
London Security plc
Richard Pollard
Company Secretary Tel : 01422 372852
WH Ireland Limited
Chris Fielding Tel : 0207 220 1666
Ben Good
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