TIDMLSC
RNS Number : 5445T
London Security PLC
30 September 2010
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LONDON SECURITY PLC
30 September 2010
INTERIM ANNOUNCEMENT
FINANCIAL HIGHLIGHTS
Financial highlights of the unaudited results for the six months ended 30 June
2010 compared with the six months ended 30 June 2009 are as follows:
revenue of GBP43.1 million (2009: GBP42.5 million);
operating profit of GBP8.9 million (2009: GBP8.4 million); and
profit before income tax of GBP9.1 million (2009: GBP7.4 million).
TRADING AND PROSPECTS
The financial highlights illustrate that The Group's revenue increased by GBP0.6
million (1.4%) to GBP43.1 million and operating profit increased by GBP0.5
million (6.0%) to GBP8.9 million. These results partially reflect the movement
in the Sterling to Euro average exchange rate which has risen from 1.12 to 1.15.
If the 2010 results from the European subsidiaries had been translated at 2009
rates, revenue would have been GBP44.0 million instead of GBP43.1 million, an
increase of 3.5%.
On the same basis operating profit would have been GBP9.1 million instead of
GBP8.9 million, an increase of 8.3% compared to 2009, reflecting strong growth
in continental Europe. In the UK there has been greater investment in customer
retention which has been reflected in lower revenue and operating profit.
In addition to the improved operating profit performance, the Group has
benefited from the low level of interest rates and has repaid a further GBP4.5
million of borrowings. These two factors have resulted in a reduction in finance
costs of GBP0.5 million. Finance income has also benefited from a further GBP0.5
million gain on the holding of foreign currency.
The Group continues its evolution from being solely an extinguisher supplier to
the customers' safety partner through our multi-service strategy offering. This
was achieved through a series of training and employee development programmes,
which has resulted in improved customer retention and greater motivation of the
workforce.
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.
Trading prospects for the second half of 2010 will continue to be challenging
but, with the effect of past and potential acquisitions and our multi-service
offering, we are in a strong position to face the challenges that will
invariably present. Therefore we expect to continue to deliver strong results in
the future.
SHARE BUYBACK PROGRAMME
As previously announced, the Board continues to believe that shareholder value
will be optimized by the purchase by the company, when appropriate, of its own
shares.
During the period under review a total of 11,100 ordinary shares were purchased
for cancellation for a total consideration of GBP88,800. Following 30 June 2010
and up until the date of this announcement a further 10,150 ordinary shares, for
a total consideration of GBP91,275, have been purchased for cancellation
The Directors confirm that they intend to actively continue to pursue this
policy and any shareholder who is considering taking advantage of the share
buyback programme is invited to contact their stockbroker, bank manager,
solicitor, accountant or other independent financial adviser authorised under
the Financial Services and Markets Act 2000, in order to contact Brewin Dolphin
Limited who are operating the buyback programme on behalf of the company.
J.G. Murray
Chairman
30 September 2010
Consolidated income statement
for the six months ended 30 June 2010
+----------------------------------------+--------+-----------+-----------+----------+
| | | Unaudited | Unaudited | Audited |
+----------------------------------------+--------+-----------+-----------+----------+
| | | six | six | year |
| | | months | months | |
+----------------------------------------+--------+-----------+-----------+----------+
| | | ended | ended | ended |
+----------------------------------------+--------+-----------+-----------+----------+
| | | 30 June | 30 June | 31 |
| | | | | December |
+----------------------------------------+--------+-----------+-----------+----------+
| | | 2010 | 2009 | 2009 |
+----------------------------------------+--------+-----------+-----------+----------+
| | Note | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+--------+-----------+-----------+----------+
| | | | | |
+----------------------------------------+--------+-----------+-----------+----------+
| Revenue | | 43,066 | 42,478 | 85,968 |
+----------------------------------------+--------+-----------+-----------+----------+
| Cost of sales | | (7,642) | (7,277) | (14,507) |
+----------------------------------------+--------+-----------+-----------+----------+
| Gross profit | | 35,424 | 35,201 | 71,461 |
+----------------------------------------+--------+-----------+-----------+----------+
| Distribution costs | | (16,726) | (16,476) | (32,520) |
+----------------------------------------+--------+-----------+-----------+----------+
| Administrative expenses | | (9,804) | (10,288) | (19,177) |
+----------------------------------------+--------+-----------+-----------+----------+
| Operating profit | | 8,894 | 8,437 | 19,764 |
+----------------------------------------+--------+-----------+-----------+----------+
| EBITDA* | | 10,473 | 10,094 | 23,171 |
+----------------------------------------+--------+-----------+-----------+----------+
| Depreciation and amortisation | | (1,579) | (1,657) | (3,407) |
+----------------------------------------+--------+-----------+-----------+----------+
| Operating profit | | 8,894 | 8,437 | 19,764 |
+----------------------------------------+--------+-----------+-----------+----------+
| Finance income | | 775 | 333 | 560 |
+----------------------------------------+--------+-----------+-----------+----------+
| Finance costs | | (694) | (1,158) | (1,937) |
+----------------------------------------+--------+-----------+-----------+----------+
| Fair value of derivative financial | | 119 | (176) | (84) |
| instruments | | | | |
+----------------------------------------+--------+-----------+-----------+----------+
| Finance costs - net | | 200 | (1,001) | (1,461) |
+----------------------------------------+--------+-----------+-----------+----------+
| Profit before income tax | | 9,094 | 7,436 | 18,303 |
+----------------------------------------+--------+-----------+-----------+----------+
| Income tax expense | | (2,613) | (2,462) | (3,772) |
+----------------------------------------+--------+-----------+-----------+----------+
| Profit for the period attributable to | | 6,481 | 4,974 | 14,531 |
| equity shareholders of the Company | | | | |
+----------------------------------------+--------+-----------+-----------+----------+
| Earnings per share | | | | |
+----------------------------------------+--------+-----------+-----------+----------+
| Basic and diluted | 2 | 52.7p | 40.5p | 118.2p |
+----------------------------------------+--------+-----------+-----------+----------+
| Dividends | | | | |
+----------------------------------------+--------+-----------+-----------+----------+
| Dividends paid per share | | - | - | - |
+----------------------------------------+--------+-----------+-----------+----------+
* 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 2010
+------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
+------------------------------------------+-----------+-----------+----------+
| | six | six | year |
| | months | months | |
+------------------------------------------+-----------+-----------+----------+
| | ended | ended | ended |
+------------------------------------------+-----------+-----------+----------+
| | 30 June | 30 June | 31 |
| | | | December |
+------------------------------------------+-----------+-----------+----------+
| | 2010 | 2009 | 2009 |
+------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+-----------+-----------+----------+
| Profit for the financial period | 6,481 | 4,974 | 14,531 |
+------------------------------------------+-----------+-----------+----------+
| Other comprehensive income: | | | |
+------------------------------------------+-----------+-----------+----------+
| - currency translation differences on | (363) | (1,996) | (1,366) |
| foreign currency net investments, net of | | | |
| tax | | | |
+------------------------------------------+-----------+-----------+----------+
| - foreign currency loan hedges, net of | 465 | 3,560 | 2,552 |
| tax | | | |
+------------------------------------------+-----------+-----------+----------+
| - actuarial loss recognised in pension | - | - | (397) |
| scheme | | | |
+------------------------------------------+-----------+-----------+----------+
| - movement on deferred tax relating to | (57) | (59) | (177) |
| pension scheme | | | |
+------------------------------------------+-----------+-----------+----------+
| - purchase of own shares | (89) | - | - |
+------------------------------------------+-----------+-----------+----------+
| Other comprehensive (expense) / income | (44) | 1,505 | 612 |
| for the period, net of tax | | | |
+------------------------------------------+-----------+-----------+----------+
| Total comprehensive income for the | 6,437 | 6,479 | 15,143 |
| period | | | |
+------------------------------------------+-----------+-----------+----------+
Consolidated statement of changes in equity
for the six months ended 30 June 2010
+------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
+------------------------------------------+-----------+-----------+----------+
| | six | six | year |
| | months | months | |
+------------------------------------------+-----------+-----------+----------+
| | ended | ended | ended |
+------------------------------------------+-----------+-----------+----------+
| | 30 June | 30 June | 31 |
| | | | December |
+------------------------------------------+-----------+-----------+----------+
| | 2010 | 2009 | 2009 |
+------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+-----------+-----------+----------+
| Profit for the financial period | 6,481 | 4,974 | 14,531 |
+------------------------------------------+-----------+-----------+----------+
| - other comprehensive income: | | | |
+------------------------------------------+-----------+-----------+----------+
| - currency translation differences on | (363) | (1,996) | (1,366) |
| foreign currency net investments, net of | | | |
| tax | | | |
+------------------------------------------+-----------+-----------+----------+
| - foreign currency loan hedges net of | 465 | 3,560 | 2,552 |
| tax | | | |
+------------------------------------------+-----------+-----------+----------+
| - actuarial loss recognised in pension | - | - | (397) |
| scheme | | | |
+------------------------------------------+-----------+-----------+----------+
| - movement on deferred tax relating to | (57) | (59) | (177) |
| pension scheme | | | |
+------------------------------------------+-----------+-----------+----------+
| - purchase of own shares | (89) | - | - |
+------------------------------------------+-----------+-----------+----------+
| Net increase in shareholders' funds | 6,437 | 6,479 | 15,143 |
+------------------------------------------+-----------+-----------+----------+
| Shareholders' funds at beginning of the | 45,657 | 30,514 | 30,514 |
| period | | | |
+------------------------------------------+-----------+-----------+----------+
| Shareholders' funds at end of the period | 52,094 | 36,993 | 45,657 |
+------------------------------------------+-----------+-----------+----------+
Consolidated statement of financial position
as at 30 June 2010
+------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
+------------------------------------------+-----------+-----------+----------+
| | as at | as at | as at |
+------------------------------------------+-----------+-----------+----------+
| | 30 June | 30 June | 31 |
| | | | December |
+------------------------------------------+-----------+-----------+----------+
| | 2010 | 2009 | 2009 |
+------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+-----------+-----------+----------+
| Assets | | | |
+------------------------------------------+-----------+-----------+----------+
| Non-current assets | | | |
+------------------------------------------+-----------+-----------+----------+
| Property, plant and equipment | 7,840 | 8,810 | 8,552 |
+------------------------------------------+-----------+-----------+----------+
| Intangible assets | 51,787 | 52,762 | 52,427 |
+------------------------------------------+-----------+-----------+----------+
| Deferred income tax asset | 611 | 779 | 604 |
+------------------------------------------+-----------+-----------+----------+
| | 60,238 | 62,351 | 61,583 |
+------------------------------------------+-----------+-----------+----------+
| Current assets | | | |
+------------------------------------------+-----------+-----------+----------+
| Inventories | 7,501 | 8,243 | 7,804 |
+------------------------------------------+-----------+-----------+----------+
| Trade and other receivables | 17,985 | 18,756 | 17,849 |
+------------------------------------------+-----------+-----------+----------+
| Cash and cash equivalents | 20,036 | 14,382 | 19,070 |
+------------------------------------------+-----------+-----------+----------+
| | 45,522 | 41,381 | 44,723 |
+------------------------------------------+-----------+-----------+----------+
| Total assets | 105,760 | 103,732 | 106,306 |
+------------------------------------------+-----------+-----------+----------+
| Liabilities | | | |
+------------------------------------------+-----------+-----------+----------+
| Current liabilities | | | |
+------------------------------------------+-----------+-----------+----------+
| Trade and other payables | (16,029) | (17,229) | (15,534) |
+------------------------------------------+-----------+-----------+----------+
| Income tax liabilities | (652) | (2,540) | (902) |
+------------------------------------------+-----------+-----------+----------+
| Borrowings | (6,695) | (7,730) | (7,597) |
+------------------------------------------+-----------+-----------+----------+
| Provision for liabilities and charges | (14) | (21) | (18) |
+------------------------------------------+-----------+-----------+----------+
| | (23,390) | (27,520) | (24,051) |
+------------------------------------------+-----------+-----------+----------+
| Non-current liabilities | | | |
+------------------------------------------+-----------+-----------+----------+
| Trade and other payables | - | (34) | (18) |
+------------------------------------------+-----------+-----------+----------+
| Borrowings | (29,615) | (38,223) | (35,596) |
+------------------------------------------+-----------+-----------+----------+
| Derivative financial instruments | (177) | (388) | (296) |
+------------------------------------------+-----------+-----------+----------+
| Deferred income tax liabilities | (197) | (91) | (83) |
+------------------------------------------+-----------+-----------+----------+
| Retirement benefit obligations | (266) | (483) | (605) |
+------------------------------------------+-----------+-----------+----------+
| Provision for liabilities and charges | (21) | - | - |
+------------------------------------------+-----------+-----------+----------+
| | (30,276) | (39,219) | (36,598) |
+------------------------------------------+-----------+-----------+----------+
| Total liabilities | (53,666) | (66,739) | (60,649) |
+------------------------------------------+-----------+-----------+----------+
| Net assets | 52,094 | 36,993 | 45,657 |
+------------------------------------------+-----------+-----------+----------+
| Shareholders' equity | | | |
+------------------------------------------+-----------+-----------+----------+
| Ordinary shares | 123 | 123 | 123 |
+------------------------------------------+-----------+-----------+----------+
| Merger reserve | 2,033 | 2,033 | 2,033 |
+------------------------------------------+-----------+-----------+----------+
| Other reserves | 6,412 | 6,688 | 6,310 |
+------------------------------------------+-----------+-----------+----------+
| Retained earnings | 43,526 | 28,149 | 37,191 |
+------------------------------------------+-----------+-----------+----------+
| Total shareholders' equity | 52,094 | 36,993 | 45,657 |
+------------------------------------------+-----------+-----------+----------+
Consolidated statement of cash flow
for the six months ended 30 June 2010
+------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
+------------------------------------------+-----------+-----------+----------+
| | six | six | year |
| | months | months | |
+------------------------------------------+-----------+-----------+----------+
| | ended | ended | ended |
+------------------------------------------+-----------+-----------+----------+
| | 30 June | 30 June | 31 |
| | | | December |
+------------------------------------------+-----------+-----------+----------+
| | 2010 | 2009 | 2009 |
+------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+-----------+-----------+----------+
| Cash flows from operating activities | | | |
+------------------------------------------+-----------+-----------+----------+
| Cash generated from operations | 10,548 | 11,472 | 24,355 |
+------------------------------------------+-----------+-----------+----------+
| Interest paid | (560) | (878) | (1,422) |
+------------------------------------------+-----------+-----------+----------+
| Income tax paid | (3,526) | (1,986) | (4,386) |
+------------------------------------------+-----------+-----------+----------+
| Net cash generated from operating | 6,462 | 8,608 | 18,547 |
| activities | | | |
+------------------------------------------+-----------+-----------+----------+
| Cash flows from investing activities | | | |
+------------------------------------------+-----------+-----------+----------+
| Acquisition of subsidiary undertaking | - | - | (375) |
+------------------------------------------+-----------+-----------+----------+
| Purchases of property, plant and | (885) | (992) | (1,777) |
| equipment | | | |
+------------------------------------------+-----------+-----------+----------+
| Proceeds from sale of property, plant | 128 | 142 | 271 |
| and equipment | | | |
+------------------------------------------+-----------+-----------+----------+
| Purchases of intangible assets | (385) | (757) | (607) |
+------------------------------------------+-----------+-----------+----------+
| Interest received | 201 | 93 | 120 |
+------------------------------------------+-----------+-----------+----------+
| Net cash used in investing activities | (941) | (1,514) | (2,368) |
+------------------------------------------+-----------+-----------+----------+
| Cash flows from financing activities | | | |
+------------------------------------------+-----------+-----------+----------+
| Purchase of own shares | (89) | - | - |
+------------------------------------------+-----------+-----------+----------+
| Repayments of borrowings | (4,466) | (3,587) | (7,984) |
+------------------------------------------+-----------+-----------+----------+
| Net cash used in financing activities | (4,555) | (3,587) | (7,984) |
+------------------------------------------+-----------+-----------+----------+
| Net increase in cash in the period | 966 | 3,507 | 8,195 |
+------------------------------------------+-----------+-----------+----------+
| Cash and cash equivalents at beginning | 19,070 | 10,875 | 10,875 |
| of the period | | | |
+------------------------------------------+-----------+-----------+----------+
| Cash and cash equivalents at end of the | 20,036 | 14,382 | 19,070 |
| period | | | |
+------------------------------------------+-----------+-----------+----------+
Notes to the financial statements
for the six months ended 30 June 2010
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 2010 is unaudited and has been
prepared on the basis of the accounting policies set out in the Group's Annual
Report and Accounts 2009. Comparative figures for the year ended 31 December
2009 have been extracted from the statutory accounts for the year ended 31
December 2009 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 and did not contain any statement under
Section 498 of the Companies Act 2006.
2 Earnings per share
The calculation of basic earnings per ordinary share is based on the profit on
ordinary activities after taxation of GBP6,481,000 (2009: GBP4,974,000) and on
12,293,938 (2009: 12,294,798) 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. The revised weighted average number of shares is 12,293,938 (2009:
12,294,798). After taking into account the effect of dilutive securities, the
basic earnings per ordinary share and adjusted earnings per ordinary share
figures are unaltered.
+------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
+------------------------------------------+-----------+-----------+----------+
| | six | six | year |
| | months | months | |
+------------------------------------------+-----------+-----------+----------+
| | ended | ended | ended |
+------------------------------------------+-----------+-----------+----------+
| | 30 June | 30 June | 31 |
| | | | December |
+------------------------------------------+-----------+-----------+----------+
| | 2010 | 2009 | 2009 |
+------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+-----------+-----------+----------+
| Profit on ordinary activities after | 6,481 | 4,974 | 14,531 |
| taxation | | | |
+------------------------------------------+-----------+-----------+----------+
| Basic earnings per ordinary share | 52.7p | 40.5p | 118.2p |
+------------------------------------------+-----------+-----------+----------+
3 Actuarial valuation of pension scheme
As permitted under IAS 19, the Group has not prepared an actuarial valuation of
pension scheme assets and liabilities for the Interim Statement 2010. In
accordance with IAS 19 such a valuation will be prepared for the purposes of the
Group's Annual Report and Accounts 2010.
For further information, please contact:
London Security plc
Richard Pollard
Company Secretary
01422 372852
Brewin Dolphin
Sandy Fraser / Iain Marlow 0845
2134730
This information is provided by RNS
The company news service from the London Stock Exchange
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