REG - London Security PLC - Final Results for the Year Ended 31 December 2017

London SecurityAnnouncement

04/05/2018 07:05

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RNS Number : 0834N
London Security PLC
04 May 2018
 

London Security plc
 
Final Results for the Year Ended 31 December 2017
 
Chairman's statement
 
Financial highlights
Financial highlights of the audited results for the year ended 31 December 2017 compared with the year ended 31 December 2016 are as follows:
·     revenue of £125.9 million (2016: £114.8 million);
·     EBITDA of £27.9 million (2016: £26.3 million);
·     operating profit of £21.7 million (2016: £20.9 million);
·     profit for the year of £14.3 million (2016: £13.8 million); and
·     a dividend per share of £0.80 (2016: £0.80).
Trading review
The financial highlights illustrate that the Group's revenue increased by £11.1 million (9.7%) to £125.9 million. However, these results are impacted by the movement in the Euro to Sterling average exchange rate, which has decreased from 1.23 to 1.14. This movement in exchange rate had a favourable effect of £7.3 million on reported revenue. If the 2017 results had been translated at 2016 rates, revenue would have been £118.6 million instead of £125.9 million (increase of 3.3% on the prior year).
Operating profit increased by £0.8 million (3.8%) to £21.7 million. Adjusting for the change in the exchange rate on the same basis as above, operating profit would have been £20.2 million instead of £21.7 million (decrease of 3.3%). A more detailed review of this year's performance is given in the Financial Review and the Strategic Report.
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 prices where an adequate return is envisaged by the Board. In the year under review the Group has consolidated its presence in the Netherlands, Germany and the UK with the acquisitions of service contracts from nine smaller well-established businesses for integration into the Group's existing subsidiaries. In addition, the Group has taken a 75% interest in a further business in the United Kingdom which will allow us to bring in house a partner with which we have previously subcontracted.
Management and staff
2017 was a year in which the staff performed well and, on behalf of the shareholders, I would like to express thanks and appreciation for their contribution. The Group recognises that we can only achieve our aims with talented and dedicated colleagues who provide outstanding customer service in every area of the business.
Michael Gailer
Following a short illness Michael Gailer sadly passed away on 5 March 2018. Michael had provided wise counsel to the Company for over 19 years. Michael will be deeply missed by his fellow Directors and our thoughts and condolences are with his family at this difficult time.
 
Dividends
A final dividend in respect of 2016 of £0.40 per ordinary share was paid to shareholders on 5 July 2017. An interim dividend in respect of 2017 of £0.40 per ordinary share was paid to shareholders on 7 December 2017. The Board is recommending the payment of a final dividend in respect of 2017 of £0.40 per ordinary share to be paid on 5 July 2018 to shareholders on the register on 8 June 2018. The shares will be marked ex-dividend on 7 June 2018.
Future prospects
The Group will continue to grow and consolidate the fire protection industry with the finest customer care.
Annual General Meeting
The Annual General Meeting will be held at 2 Eaton Gate, London SW1W 9BJ, on 20 June 2018 at 2 pm. You will find enclosed a form of proxy for use at that Meeting, which you are requested to complete and return in accordance with the instructions on the form. Your Directors look forward to meeting you at that time.
 
J.G. Murray
Chairman
3 May 2018


 
Consolidated income statement
for the year ended 31 December 2017
 




 


 


2017


2016




 


Note


£'000


£'000




Revenue


 


125,873


114,845




Cost of sales


 


(26,626)


(23,638)




Gross profit


 


99,247


91,207




Distribution costs


 


(47,751)


(42,191)




Administrative expenses


 


(29,757)


(28,154)




Operating profit


 


21,739


20,862




EBITDA*


 


27,934


26,321




Depreciation and amortisation


 


(6,195)


(5,459)




Operating profit


 


21,739


20,862




Finance income


 


237


176




Finance costs


 


(392)


(433)




Finance costs - net


 


(155)


(257)




Profit before income tax


 


21,584


20,605




Income tax expense


 


(7,239)


(6,822)




Profit for the year


 


14,345


13,783




Profit is attributable to:


 


 


 




Equity shareholders of the Company


 


14,310


13,783




Non-controlling interest


 


35


-




 


 


14,345


13,783




Earnings per share


 


 


 




Basic and diluted


1


116.7p


112.4p




 
*     Earnings before interest, tax, depreciation and amortisation.
 
The above results are all as a result of continuing operations.
 
 
Consolidated statement of comprehensive income
for the year ended 31 December 2017
 




 


 


2017


2016




 


 


£'000


£'000




Profit for the financial year


 


14,345


13,783




Other comprehensive income/(expense):


 


 


 




Items that may be reclassified subsequently to profit or loss:


 


 


 




- currency translation differences on foreign currency net investments


 


1,439


4,441




Items that will not be reclassified subsequently to profit or loss:


 


 


 




- actuarial gain recognised in the Nu-Swift pension scheme


 


734


263




- movement on deferred tax relating to Nu-Swift pension scheme surplus


 


(257)


(92)




- actuarial gain/(loss) recognised in the Ansul pension scheme


 


721


(200)




- movement on deferred tax relating to Ansul pension scheme deficit


 


(313)


61




Other comprehensive income for the year, net of tax


 


2,324


4,473




Total comprehensive income for the year


 


16,669


18,256




 
 
 
Consolidated statement of changes in equity
for the year ended 31 December 2017
 




 


 


Share


Capital


 


 


 


 


 




 


Share


premium


redemption


Merger


Other


Retained


Non-controlling


Total




 


capital


account


reserve


reserve


reserve


earnings


interest


equity




 


£'000


£'000


£'000


£'000


£'000


£'000


£'000


£'000




At 1 January 2016


123


344


1


2,033


2,590


82,932


-


88,023




Total comprehensive income for the year


 


 


 


 


 


 


 


 




Profit for the financial year


-


-


-


-


-


13,783


-


13,783




Other comprehensive income/(expense):


 


 


 


 


 


 


 


 




- exchange adjustments


-


-


-


-


4,441


-


-


4,441




- actuarial gain on pension schemes


-


-


-


-


-


63


-


63




- net movement on deferred tax relating to pension asset


-


-


-


-


-


(31)


-


(31)




Total comprehensive income for the year


-


-


-


-


4,441


13,815


-


18,256




Contributions by and distributions to owners of the Company:
- dividends


-


-


-


-


-


(9,808)


-


(9,808)




- release of accrual for unclaimed dividends


-


-


-


-


-


82


-


82




Total contributions by and distributions to owners of the Company


-


-


-


-


-


(9,726)


-


(9,726)




At 31 December 2016 and 1 January 2017


123


344


1


2,033


7,031


87,021


-


96,553




Total comprehensive income for the year


 


 


 


 


 


 


 


 




Profit for the financial year


-


-


-


-


-


14,310


35


14,345




Other comprehensive income/(expense):


 


 


 


 


 


 


 


 




- exchange adjustments


-


-


-


-


1,439


-


-


1,439




- actuarial gain on pension schemes


-


-


-


-


-


1,455


-


1,455




- net movement on deferred tax relating to pension asset


-


-


-


-


-


(570)


-


(570)




Total comprehensive income for the year


-


-


-


-


1,439


15,195


35


16,669




Contributions by and distributions to owners of the Company:
- dividends


-


-


-


-


-


(9,808)


-


(9,808)




Contribution from non-controlling interest on business combination


-


-


-


-


-


-


154


154




At 31 December 2017


123


344


1


2,033


8,470


92,408


189


103,568




 
The merger reserve is not a distributable reserve. The other reserve relates entirely to the effects of changes in foreign currency exchange rates.
 


Consolidated statement of financial position
as at 31 December 2017
 




 


 


2017


2016




 


 


£'000


£'000




Assets


 


 


 




Non-current assets


 


 


 




Property, plant and equipment


 


11,589


10,937




Intangible assets


 


61,724


62,749




Deferred tax asset


 


589


919




Retirement benefit surplus


 


4,397


3,574




 


 


78,299


78,179




Current assets


 


 


 




Inventories


 


11,749


11,095




Trade and other receivables


 


26,063


23,138




Cash and cash equivalents


 


24,652


22,602




 


 


62,464


56,835




Total assets


 


140,763


135,014




Liabilities


 


 


 




Current liabilities


 


 


 




Trade and other payables


 


(19,576)


(19,344)




Income tax liabilities


 


(1,699)


(1,180)




Borrowings


 


(11,125)


(1,870)




Derivative financial instruments


 


(54)


-




Provision for liabilities and charges


 


-


(35)




 


 


(32,454)


(22,429)




Non-current liabilities


 


 


 




Trade and other payables


 


(1,003)


(957)




Borrowings


 


-


(10,789)




Derivative financial instruments


 


-


(172)




Deferred tax liabilities


 


(1,830)


(1,705)




Retirement benefit obligations


 


(1,721)


(2,279)




Provision for liabilities and charges


 


(187)


(130)




 


 


(4,741)


(16,032)




Total liabilities


 


(37,195)


(38,461)




Net assets


 


103,568


96,553




Shareholders' equity


 


 


 




Ordinary shares


 


123


123




Share premium


 


344


344




Capital redemption reserve


 


1


1




Merger reserve


 


2,033


2,033




Other reserves


 


8,470


7,031




Retained earnings


 


92,408


87,021




Equity attributable to owners of the Parent Company


 


103,379


96,553




Non-controlling interest


 


189


-




Total equity


 


103,568


96,553




 


Consolidated statement of cash flow
for the year ended 31 December 2017
 




 


 


2017


2016




 


 


£'000


£'000




Cash flows from operating activities


 


 


 




Cash generated from operations


 


25,182


26,059




Interest paid


 


(368)


(408)




Income tax paid


 


(7,249)


(7,213)




Net cash generated from operating activities


 


17,565


18,438




Cash flows from investing activities


 


 


 




Acquisition of subsidiary undertakings (net of cash acquired)


 


(1,220)


(2,222)




Purchases of property, plant and equipment


 


(3,384)


(2,774)




Proceeds from the sale of property, plant and equipment


 


349


323




Purchases of intangible assets


 


(600)


(1,662)




Interest received


 


30


43




Net cash used in investing activities


 


(4,825)


(6,292)




Cash flows from financing activities


 


 


 




Repayments of borrowings


 


(1,809)


(1,819)




Dividends paid to Company's shareholders


 


(9,808)


(9,726)




Contribution from non-controlling interest


 


154


-




Net cash used in financing activities


 


(11,463)


(11,545)




Effects of exchange rates on cash and cash equivalents


 


773


2,265




Net increase in cash in the year


 


2,050


2,866




Cash and cash equivalents at the beginning of the year


 


22,602


19,736




Cash and cash equivalents at the end of the year


 


24,652


22,602




 
 


Notes to the financial statements
for the year ended 31 December 2017
 
1 Earnings per share
The calculation of basic earnings per ordinary share ("EPS") is based on the profit on ordinary activities after taxation of £14,310,000 (2016: £13,783,000) and on 12,261,477 (2016: 12,261,477) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
For diluted EPS, the weighted average number of shares in issue is adjusted to assume conversion of all dilutive potential 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.




 


2017


 


2016




 


£'000


Pence


 


£'000


Pence




Profit on ordinary activities after taxation


14,310


116.7


 


13,783


112.4




 
2 This preliminary announcement does not constitute the Company's statutory accounts within the meaning of Section 434 of the Companies Act 2006.
The results for the year ended 31 December 2017 have been extracted from the full accounts of the Group for that year which received an unqualified auditor's report and which have not yet been delivered to the Registrar of Companies.  The financial information for the year ended 31 December 2016 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The report of the auditor on those filed accounts was unqualified.  The accounts for the year ended 31 December 2017 and 31 December 2016 did not contain a statement under s498 (1) to (4) of the Companies Act 2006 or under s237(1) to (4) of the Companies Act 1985.
This preliminary announcement has been prepared in accordance with International Financial Reporting Standards. The Group will post its annual report and accounts to shareholders on 16 May 2018. A copy of the annual report and accounts can be found on the company's webpage (www.londonsecurity.org).
 
Enquiries




London Security plc


 




Richard Pollard
Company Secretary


Tel: 01422 372 852




 


 




WH Ireland Limited


 




Chris Fielding


Tel: 0207 220 1666




 


 




 


 




 
 



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