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Last Trade - 04/05/21

Sector
Technology
Size
Small Cap
Market Cap £294.3m
Enterprise Value £268.9m
Revenue £142.3m
Position in Universe 738th / 1821

London Security PLC - Final Results

Thu 1st May, 2008 7:11am
London Security PLC01 May 2008

2008-05-01 07:10:36
London Security PLC - Final Results
RNS Number:5179T
London Security PLC
01 May 2008


LONDON SECURITY PLC

1 May 2008

PRELIMINARY ANNOUNCEMENT

FINANCIAL HIGHLIGHTS

Financial highlights of the audited results for the year ended 31 December 2007
compared with the year ended 31 December 2006 are as follows:

* Turnover of 66.6million (2006: 64.4million)
* Operating profit before depreciation of 18.8million (2006:
14.7million)
* Operating profit of 16.8million (2006: 12.7million)
* Profit on ordinary activities before taxation of 17.2million (2006:
11.3million)

TRADING REVIEW

The financial highlights illustrate that 2007 has been a period of profit
improvement for the Group. The Group's operating profit increased by 32% to
16,793,000.

In mainland Europe, the Group has gone from strength to strength, building upon
its strong position in servicing fire extinguishers and hose reels and growing
our new activities through our multi-service strategy offering customers a
complete range of services around the first intervention on fires and first-aid.
This strategy has enabled the Group's evolution from solely an extinguisher
supplier to the customers' safety partner.

In the UK, the profit increase reflects a strong customer response to new
contracts and sales initiatives implemented in late 2006. Investment in
training of the field force and a changed payment package has improved market
penetration. In addition, we have carried out a cost review, and identified
cost efficiencies which were successfully implemented into the Group.

DISPOSAL OF SWISS SUBSIDIARIES

In December 2007, the Group completed the disposal of its Swiss subsidiaries
announced in October 2007, approved by shareholders on 1 November 2007, for the
cash consideration of 5,991,000 to a company owned by the Chairman. The
Directors including the Independent Directors were advised by Brewin Dolphin
Limited, the company's Nominated Advisor, that the terms of the disposal were
fair and reasonable insofar as all shareholders were concerned. This disposal
realised a profit of 4,216,000 which was distributed by way of a special
dividend on 30 November 2007.

ACQUISITIONS

It remains a principal aim of the Group to grow through acquisition.
Acquisitions are being sought throughout Europe and the Group will invest at the
upper end of the price spectrum where an adequate return is envisaged by the
Board.

A strategy was implemented in 2006 to replace the cold-calling field sales force
with an acquisition team. This has started to escalate and is proving
successful in growing the business for the future.

In 2007, we have acquired numerous contracts to service fire equipment
throughout the UK from eight separate sources. No fixed overhead was added as a
result of these acquisitions.

MANAGEMENT AND STAFF

2007 was a year in which the staff performed well and, on your behalf, I would
like to express thanks and appreciation for their contribution.

PENSION CURTAILMENT OFFER

During the financial period, an offer was made to all deferred members of our
defined benefits pension scheme in the UK, giving them the opportunity to
transfer their accrued pension rights to an alternative pension scheme provider.
The financial effect of the offer has been to reduce the pension scheme
liability by 3,787,000.

DIVIDENDS

A special dividend in respect of 2007 of 0.50 per ordinary share was paid on 30
November 2007. The Board is not recommending the payment of a final dividend in
respect of 2007.

A first interim dividend in respect of 2008 of 0.57 per ordinary share was paid
to shareholders on 25 April 2008. A second interim dividend of 0.73 per
ordinary share is to be paid on 22 May 2008 to shareholders on the register at
30 April 2008.

Dividend policy continues to be reviewed regularly by the Board.

FINANCING

In order to pay the interim dividends referred to above the Group has arranged
an additional 15 million of bank loans with Lloyds Bank plc.

FUTURE PROSPECTS

The outlook for 2008 is for continued but steady progress consolidating upon the
improvements achieved in 2007.



Consolidated Income Statement
For the year ended 31 December 2007



2007 2006
Notes '000 '000
Revenue 66,605 64,426
Cost of sales (11,351) (11,719)

Gross profit 55,254 52,707

Distribution costs (22,453) (24,490)
Administrative expenses (16,008) (15,481)

Operating profit before depreciation 18,785 14,723
Depreciation (1,992) (1,987)
Operating profit 16,793 12,736

Profit on disposal of subsidiary undertakings 4,216 -

Finance income 952 692
Finance costs (4,749) (2,165)
Finance costs - net (3,797) (1,473)

Profit before income tax 17,212 11,263

Income tax expense (4,017) (3,647)

Profit for the year attributable to equity
shareholders of the company 13,195 7,616
Earnings per share
Basic and diluted 1 107.3p 61.9p
Dividends
Dividends paid per share 50.0p 12.0p



Consolidated Balance Sheet
As at 31 December 2007

2007 2006
'000 '000
Assets
Non Current Assets
Property, plant and equipment 7,863 7,053
Intangible assets 47,236 46,825
Deferred tax asset 743 1,258
55,842 55,136
Current Assets
Inventories 5,687 4,593
Trade and other receivables 14,358 14,746
Cash and cash equivalents 11,807 8,676
31,852 28,015
Total Assets 87,694 83,151
Liabilities
Current Liabilities
Trade and other payables (14,475) (11,788)
Income tax liabilities (1,891) (2,174)
Borrowings (5,388) (5,051)
Provision for liabilities and charges (49) (350)
(21,803) (19,363)
Non Current Liabilities
Trade and other payables (43) (54)
Borrowings (27,022) (30,395)
Derivative financial instruments (19) (140)
Deferred tax liabilities (100) (46)
Retirement benefit obligations (949) (4,133)
Provision for liabilities and charges (130) (157)
(28,263) (34,925)
Total Liabilities (50,066) (54,288)
Net Assets 37,628 28,863
Shareholders' equity
Ordinary shares 123 123
Merger reserve 2,033 2,033
Other reserves 1,071 (257)
Retained earnings 34,401 26,964
Total Shareholders' equity 37,628 28,863



Consolidated Cash Flow Statement
For the year ended 31 December 2007


2007 2006
'000 '000
Cash flows from operating activities
Cash generated from operations 19,328 14,380
Interest paid (2,033) (1,866)
Income tax paid (4,556) (3,307)
Net cash generated from operating activities 12,739 9,207

Cash flows from investing activities
Acquisition of subsidiary undertaking (231) (248)
Net proceeds from sale of subsidiary undertakings 4,587 -
Purchases of property, plant and equipment (2,707) (1,836)
Proceeds from sale of property, plant and equipment 401 650
Purchases of intangible assets (578) (32)
Proceeds from sale of intangible assets 18 -
Interest received 278 147

Net cash generated by/(used in) investing activities 1,768 (1,319)

Cash flows from financing activities
Purchase of own shares (97) -
Repayments of borrowings (5,133) (5,858)
Capital repayment of finance leases - (131)
Dividends paid to company's shareholders (6,146) (1,476)

Net cash used in financing activities (11,376) (7,465)

Net increase in cash in the year 3,131 423
Cash and cash equivalents at beginning of the year 8,676 8,253
Cash and cash equivalents at the end of the year 11,807 8,676



Consolidated statement of recognised income and expense
for the year ended 31 December 2007


2007 2006
Notes '000 '000
Profit for the financial year 13,195 7,616

Currency translation differences on foreign 1,328 (259)
currency net investments
Actuarial gain recognised in pension scheme 1,473 52
Movement on deferred tax relating to pension scheme (988) (16)
Net income/(expenses) recognised directly in equity 1,813 (223)

Total recognised income for the year attributable 15,008 7,393
to equity shareholders of the company




1 Earnings per Share

The calculation of basic earnings per ordinary share ("EPS") is based on the
profit on ordinary activities after taxation of 13,195,000 (2006: 7,616,000)
and on 12,295,811 (2006: 12,303,198) ordinary shares, being the weighted average
number of ordinary shares in issue during the year.

For diluted earnings per ordinary share, the weighted average number of shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. The only potential ordinary shares in the Group are in respect of the
unapproved share option scheme. The revised weighted average number of shares is
12,297,500 (2006: 12,304,394). After taking into account the effect of dilutive
securities, the basic EPS and adjusted EPS figures are unaltered.

2007 2006
'000 Pence '000 Pence
Profit on ordinary activities after taxation 13,195 107.3 7,616 61.9
Eliminate effect of:
- Profit on disposal of subsidiary undertakings (4,216) (34.3) - -
Adjusted profit for the period 8,979 73.0 7,616 61.9


2 This preliminary announcement does not constitute the Company's
statutory accounts within the meaning of Section 240 of the Companies Act 1985.

The results for the year ended 31 December 2007 have been extracted from the
full accounts of the Group for that year which received an unqualified auditors'
report and which have not yet been delivered to the Registrar of Companies. The
financial information for the year ended 31 December 2006 is derived (after
adjustments for International Financial Reporting Standards) from the statutory
accounts for that year, which have been delivered to the Registrar of Companies.
The report of the auditors on those filed accounts was unqualified.. The
accounts for the year ended 31 December 2007 and 31 December 2006 did not
contain a statement under s237(2) or s237(3) of the Companies Act 1985.

This preliminary announcement has been prepared in accordance with International
Financial Reporting Standards.

Enquiries: London Security plc
Richard Pollard
Company Secretary Tel: 01422 372852




This information is provided by RNS
The company news service from the London Stock Exchange
END

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