REG - London Security PLC - Final Results <Origin Href="QuoteRef">LSC.L</Origin>

London SecurityAnnouncement

27/04/2017 07:06

RNS Number : 4637D
London Security PLC
27 April 2017
London Security plc
Final Results for the Year Ended 31 December 2016
CHAIRMAN'S STATEMENT
FINANCIAL HIGHLIGHTS
Financial highlights of the audited results for the year ended 31 December 2016 compared with the year ended 31 December 2015 are as follows:
 revenue of 114.8 million (2015: 101.2 million);
 operating profit before depreciation and amortisation of 26.3 million (2015: 23.2 million);
 operating profit of 20.9 million (2015: 18.5 million);
 profit after income tax of 13.8 million (2015: 12.3 million); and
 a dividend per share of 0.80 (2015: 0.68).
TRADING REVIEW
The financial highlights illustrate that the Group's revenue increased by 13.6 million (13.4%) to 114.8 million. However, these results are impacted by the movement in the Euro to Sterling average exchange rate, which has decreased from 1.38 to 1.23. This movement in exchange rate had a favourable effect of 9.8 million on reported revenue. If the 2016 results had been translated at 2015 rates, revenue would have been 105.0 million instead of 114.8 million (increase of 3.8% on prior year).
Operating profit increased by 2.4 million (13.0%) to 20.9 million. Adjusting for the change in the exchange rate on the same basis as above, operating profit would have been 18.7 million instead of 20.9 million (increase of 1.1%). 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 Belgium, the Netherlands and the UK with the acquisitions of service contracts from 15 smaller well established businesses for integration into the Group's existing subsidiaries. In addition, with the acquisition of One Protect in France and Ludwig in Germany the Group has expanded its business into two new countries.
MANAGEMENT AND STAFF
2016 was a year in which the staff performed well and, on your behalf, 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.
DIVIDENDS
A final dividend in respect of 2015 of 0.40 per ordinary share was paid to shareholders on 8 July 2016. An interim dividend in respect of 2016 of 0.40 per ordinary share was paid to shareholders on 8 December 2016. The Board is recommending the payment of a final dividend in respect of 2016 of 0.40 per ordinary share to be paid on 5 July 2017 to shareholders on the register on 9 June 2017. The shares will be marked ex-dividend on 8 June 2017.
FUTURE PROSPECTS
We are experiencing increased competition in our core market and customer care is becoming increasingly important. To retain our valued customers we need to strive to serve them at the highest possible level. We do not expect the economic environment to get any easier in 2017. Nonetheless your Group remains in a strong position and will continue to focus on meeting the needs of our customers and our shareholders.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held at 2 Eaton Gate, London SW1W 9BJ on 21 June 2017 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
27 April 2017
Consolidated income statement
for the year ended 31 December 2016
2016
2015
Note
'000
'000
Revenue

114,845
101,165
Cost of sales

(23,638)
(20,373)
Gross profit

91,207
80,792
Distribution costs

(42,191)
(37,304)
Administrative expenses

(28,154)
(25,010)
Operating profit

20,862
18,478
EBITDA*

26,321
23,191
Depreciation and amortisation

(5,459)
(4,713)
Operating profit

20,862
18,478
Finance income

176
179
Finance costs

(433)
(446)
Finance costs - net
(257)
(267)
Profit before income tax
20,605
18,211
Income tax expense
(6,822)
(5,942)
Profit for the year attributable to equity shareholders of the Company

13,783
12,269
Earnings per share



Basic and diluted
1
112.4p
100.1p
* 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 2016
2016
2015
'000
'000
Profit for the financial year

13,783
12,269
Other comprehensive income/(expense):



Items that may be reclassified subsequently to profit or loss:



- currency translation differences on foreign currency net investments

4,441
(1,168)
Items that will not be reclassified subsequently to profit or loss:



- actuarial gain/(loss) recognised in the Nu-Swift pension scheme
263
(406)
- movement on deferred tax relating to Nu-Swift pension scheme surplus
(92)
142
- actuarial (loss)/gain recognised in the Ansul pension scheme
(200)
163
- movement on deferred tax relating to Ansul pension scheme deficit
61
(56)
Other comprehensive income/(expense) for the year, net of tax

4,473
(1,325)
Total comprehensive income for the year

18,256
10,944


Consolidated statement of changes in equity
for the year ended 31 December 2016
Share
Capital
Share
premium
redemption
Merger
Other
Retained
Total
capital
account
reserve
reserve
reserve
earnings
equity
'000
'000
'000
'000
'000
'000
'000
At 1 January 2015
123
344
1
2,033
3,758
79,157
85,416
Total comprehensive income for the year







Profit for the financial year
-
-
-
-
-
12,269
12,269
Other comprehensive (expense)/income:







- exchange adjustments
-
-
-
-
(1,168)
-
(1,168)
- actuarial loss on pension schemes
-
-
-
-
-
(243)
(243)
- net movement on deferred tax relating to pension asset
-
-
-
-
-
86
86
Total comprehensive income for the year
-
-
-
-
(1,168)
12,112
10,944
Contributions by and distributions to owners oftheCompany:
- dividends
-
-
-
-
-
(8,337)
(8,337)
Total contributions by and distributions toowners oftheCompany
-
-
-
-
-
(8,337)
(8,337)
At 31 December 2015 and 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 oftheCompany:
- dividends
-
-
-
-
-
(9,808)
(9,808)
- release of accrual for unclaimed dividends
-
-
-
-
-
82
82
Total contributions by and distributions toowners oftheCompany
-
-
-
-
-
(9,726)
(9,726)
At 31 December 2016
123
344
1
2,033
7,031
87,021
96,553
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 2016
2016
2015
'000
'000
Assets
Non-current assets
Property, plant and equipment
10,937
9,789
Intangible assets
62,749
60,594
Deferred tax asset
919
690
Retirement benefit surplus
3,574
3,196
78,179
74,269
Current assets
Inventories
11,095
9,689
Trade and other receivables
23,138
19,901
Cash and cash equivalents
22,602
19,736
56,835
49,326
Total assets
135,014
123,595
Liabilities
Current liabilities
Trade and other payables
(19,344)
(16,666)
Income tax liabilities
(1,180)
(1,335)
Borrowings
(1,870)
(1,679)
Provision for liabilities and charges
(35)
(35)
(22,429)
(19,715)
Non-current liabilities
Trade and other payables
(957)
(669)
Borrowings
(10,789)
(11,417)
Derivative financial instruments
(172)
(190)
Deferred tax liabilities
(1,705)
(1,696)
Retirement benefit obligations
(2,279)
(1,684)
Provision for liabilities and charges
(130)
(201)
(16,032)
(15,857)
Total liabilities
(38,461)
(35,572)
Net assets
96,553
88,023
Shareholders' equity
Ordinary shares
123
123
Share premium
344
344
Capital redemption reserve
1
1
Merger reserve
2,033
2,033
Other reserves
7,031
2,590
Retained earnings
87,021
82,932
Total shareholders' equity
96,553
88,023


Consolidated statement of cash flow
for the year ended 31 December 2016
2016
2015
'000
'000
Cash flows from operating activities



Cash generated from operations

26,059
20,215
Interest paid

(408)
(425)
Income tax paid

(7,213)
(5,889)
Net cash generated from operating activities

18,438
13,901
Cash flows from investing activities



Acquisition of subsidiary undertakings (net of cash acquired)

(2,222)
(1,301)
Purchases of property, plant and equipment

(2,774)
(2,363)
Proceeds from sale of property, plant and equipment

323
236
Purchases of intangible assets

(1,662)
(974)
Interest received

43
27
Net cash used in investing activities

(6,292)
(4,375)
Cash flows from financing activities



Repayments of borrowings

(1,819)
(1,663)
Dividends paid to Company's shareholders

(9,726)
(8,337)
Net cash used in financing activities

(11,545)
(10,000)
Effects of exchange rates on cash and cash equivalents

2,265
(768)
Net increase/(decrease) in cash in the year

2,866
(1,242)
Cash and cash equivalents at the beginning of the year

19,736
20,978
Cash and cash equivalents at end of the year

22,602
19,736


Notes to the financial statements
for the year ended 31 December 2016
1 Earnings per share
The calculation of basic earnings per ordinary share ("EPS") is based on the profit on ordinary activities after taxation of13,783,000 (2015: 12,269,000) and on 12,261,477 (2015: 12,261,477) ordinary shares, being the weighted average number of ordinary shares inissue 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 anddiluted earnings pershare as there are no potentially dilutive shares outstanding.
2016
2015
'000
Pence
'000
Pence
Profit on ordinary activities after taxation
13,783
112.4

12,269
100.1
2This 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 2016 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 2015 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 2016 and 31 December 2015 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 11 May 2016. 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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