REG - London Security PLC - Half Yearly Report <Origin Href="QuoteRef">LSC.L</Origin>

London SecurityAnnouncement

30/09/2014 07:00

RNS Number : 8721S
London Security PLC
30 September 2014
London Security PLC
Half Yearly Report
Unaudited Interim Statement for the six months ended 30 June 2014 
Chairman's statement
Financial highlights:
Revenue
51.3 million
2013: 47.8 million
Operating profit
9.4 million
2013: 9.0 million
TRADING
The financial highlights illustrate that the Group's revenue increased by 3.5 million (7.3%) to 51.3 million and operating profit increased by 0.4 million (4.4%) to 9.4 million. This growth is despite the movement in the Sterling to Euro average exchange rate (1.18 to 1.22) which has reduced like for like revenue by 1.3 million and operating profit by 0.3 million. 
These increases reflect the contribution from two new subsidiaries within the Group:
- Noris Feuerschitzgerate G.m.b.H. acquired in May 2013 achieved sales of 2.3 million in the 6 months to June 2014 and contributed an operating profit of 0.2 million.
- GC Fire Protection Ltd commenced operations in July 2013 and this year has recorded sales of 0.9 million and operating profit of 0.1 million.
The operating profit margin of these two new subsidiaries is below that achieved in the Group's other more established businesses. As these companies are integrated into the Group's operations your Directors are confident of improving returns.
ACQUISITIONS
In the six months to the end of June the Group has acquired a total of five well established businesses at a cost of 0.6 million (2013: five businesses at a cost of 3.3 million). The integration of these businesses into the Group has, so far, been successful and results are in line with expectations. In July a further acquisition was made in the UK at a cost of 0.5 million. 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.
PENSION SCHEME SURPLUS
As at 30 June 2013 the Nu-Swift pension scheme valuation calculated in accordance with IAS 19 resulted in a surplus of 1.8 million. This asset was not recognised in the prior year's Interim Statement as it was considered that there was no unconditional right for the Group to recover the surplus. Following further consultation of the trust deeds and external advice sought in the year to 31 December 2013, the Directors have reconsidered the guidance in IAS19 and IFRIC 14 and concluded that because of the rights upon wind-up it was now appropriate to recognise this asset in the financial statements. The surplus in this scheme as at 31 December 2013 calculated in accordance with IAS 19 was 2.4 million. This has been recognised as a non-current asset in this Interim Statement.
PROSPECTS
Economic growth in the Group's market has been depressed but our business remains strong, cash generative and well developed, with positive net funds. As a leading provider in this market with a well-diversified and loyal customer base, the Board is optimistic for further success in 2014.
DIVIDENDS
A final dividend in respect of 2013 of 0.31 per ordinary share was paid to shareholders on 8 July 2014.
J.G. Murray
Chairman
30 September 2014


Consolidated income statement
for the six months ended 30 June 2014



Unaudited
Unaudited
Audited




six months
six months
year




ended
ended
ended




30 June
30 June
31 December




2014
2013
2013



Note
'000
'000
'000

Revenue
51,279
47,782
101,362
Cost of sales
(9,840)
(9,280)
(19,785)
Gross profit
41,439
38,502
81,577
Distribution costs
(19,585)
(18,196)
(37,894)
Administrative expenses
(12,430)
(11,346)
(23,729)
Operating profit
9,424
8,960
19,954
EBITDA*
11,544
10,842
24,059
Depreciation and amortisation
(2,120)
(1,882)
(4,105)
Operating profit
9,424
8,960
19,954
Finance income
93
73
377
Finance costs
(435)
(242)
(475)
Finance costs - net
(342)
(169)
(98)
Profit before income tax
9,082
8,791
19,856
Income tax expense
(2,907)
(2,842)
(6,148)
Profit for the period attributable to equity shareholders of the Company
6,175
5,949
13,708
Earnings per share
Basic and diluted
3
50.4p
48.5p
111.8p
Dividends
Dividends paid per share
Nil
Nil
76.0p
* 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 2014

Unaudited
Unaudited
Audited

six months
six months
year

ended
ended
ended

30 June
30 June
31 December

2014
2013
2013

'000
'000
'000
Profit for the financial period
6,175
5,949
13,708
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
(1,108)
1,001
331
- actuarial loss recognised in the Nu-Swift pension scheme
-
-
(72)
- movement on deferred tax relating to Nu-Swift pension scheme surplus
-
-
(485)
- Nu-Swift pension surplus recognised
-
-
1,794
- actuarial loss recognised in the Ansul pension scheme
-
-
(381)
- movement on deferred tax relating to the Ansul pension scheme
-
-
166
Other comprehensive income/(expense) for the period, net of tax
(1,108)
1,001
1,353
Total comprehensive income for the period
5,067
6,950
15,061


Consolidated statement of changes in equity
for the six months ended 30 June 2014






Profit


Share
Share
Capital
Merger
Other
and loss


capital
premium
redemption
reserve
reserve
account
Total

'000
'000
'000
'000
'000
'000
'000
At 1 January 2013
123
344
1
2,033
5,382
69,136
77,019
Comprehensive income for the period
Profit for the period
-
-
-
-
-
5,949
5,949
Exchange adjustments
-
-
-
-
1,001
-
1,001
Total comprehensive income for the period
-
-
-
-
1,001
5,949
6,950
At 30 June 2013
123
344
1
2,033
6,383
75,085
83,969
Comprehensive income for the period
Profit for the period
-
-
-
-
-
7,759
7,759
Exchange adjustments
-
-
-
-
(670)
-
(670)
Actuarial loss on pension schemes
-
-
-
-
-
(453)
(453)
Movement on deferred tax relating to pension schemes
-
-
-
-
-
(319)
(319)
Net pension surplus recognised
-
-
-
-
-
1,794
1,794
Total comprehensive income for the period
-
-
-
-
(670)
8,781
8,111
Contributions by and distributions to owners of the Company:
-
-
-
-
-
Dividends
(9,319)
(9,319)
Release of provision for unclaimed dividends
--
-
-
-
-
50
50
Total contributions by and distributions to owners of the Company
-
-
-
-
-
(9,269)
(9,269)
At 31 December 2013
123
344
1
2,033
5,713
74,597
82,811
Comprehensive income for the period
Profit for the period
-
-
-
-
-
6,175
6,175
Exchange adjustments
-
-
-
-
(1,108)
-
(1,108)
Total comprehensive income for the period
-
-
-
-
(1,108)
6,175
5,067
At 30 June 2014
123
344
1
2,033
 4,605
80,772
87,878


Consolidated statement of financial position
for the six months ended 30 June 2014


Unaudited
Unaudited
Audited


as at
as at
as at


30 June
30 June
31 December


2014
2013
2013


'000
'000
'000
Assets
Non-current assets
Property, plant and equipment
9,751
9,947
9,973
Intangible assets
57,468
57,539
58,325
Deferred tax asset
604
509
632
Retirement benefit surplus
2,469
-
2,424
Derivative financial instruments
-
-
92
70,292
67,995
71,446
Current assets
Inventories
9,221
9,637
8,826
Trade and other receivables
20,117
21,497
21,153
Cash and cash equivalents
26,203
24,645
20,565
55,541
55,779
50,544
Total assets
125,833
123,774
121,990
Liabilities
Current liabilities
Trade and other payables
(17,617)
(17,606)
(16,992)
Income tax liabilities
(383)
(631)
(866)
Borrowings
(1,823)
(1,968)
(1,878)
Provision for liabilities and charges
(4)
(4)
(4)
(19,827)
(20,209)
(19,740)
Non-current liabilities
Trade and other payables
(535)
(494)
(509)
Borrowings
(14,890)
(17,373)
(16,261)
Derivative financial instruments
(86)
(99)
-
Deferred income tax liabilities
(987)
(394)
(991)
Retirement benefit obligations
(1,630)
(1,236)
(1,678)
(18,128)
(19,596)
(19,439)
Total liabilities
(37,955)
(39,805)
(39,179)
Net assets
87,878
83,969
82,811
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
4,605
6,383
5,713
Retained earnings
80,772
75,085
74,597
Total shareholders' equity
87,878
83,969
82,811


Consolidated statement of cash flow
for the six months ended 30 June 2014


Unaudited
Unaudited
Audited


six months
six months
year


ended
ended
ended


30 June
30 June
31 December


2014
2013
2013


'000
'000
'000
Cash flows from operating activities
Cash generated from operations
11,764
10,455
22,913
Interest paid
(239)
(212)
(418)
Income tax paid
(2,676)
(3,195)
(5,625)
Net cash generated from operating activities
8,849
7,048
16,870
Cash flows from investing activities
Acquisition of subsidiary undertakings
-
(3,095)
(3,002)
Purchases of property, plant and equipment
(1,126)
(1,212)
(2,537)
Proceeds from sale of intangible assets
39
-
33
Proceeds from sale of property, plant and equipment
133
156
275
Purchases of intangible assets
(667)
(482)
(2,575)
Interest received
48
43
96
Net cash used in investing activities
(1,573)
(4,590)
(7,710)
Cash flows from financing activities
Repayments of borrowings
(914)
(13,718)
(16,610)
New borrowings
-
17,373
19,187
Dividends paid to Company's shareholders
-
-
(9,319)
Net cash generated from/(used in) financing activities
(914)
3,655
(6,742)
Effects of exchange rates on cash and cash equivalents
(724)
671
286
Net increase in cash in the period
5,638
6,784
2,704
Cash and cash equivalents at beginning of the period
20,565
17,861
17,861
Cash and cash equivalents at end of the period
26,203
24,645
20,565
Notes to the financial statements
for the six months ended 30 June 2014
1 Nature of information
The financial information contained in this Interim Statement has been neither audited nor reviewed by the auditor 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 2014 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 2013. The principle 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 2013 have been extracted from the statutory accounts for the year ended 31 December 2013 which have been delivered to the Registrar of Companies. The Independent Auditor's 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 Basis of preparation 
The preparation of interim financial statements requires management to make judgements, estimates andassumptions that affect the application of accounting policies and the reported amounts of assets andliabilities, 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 of6,175,000 (2013: 5,949,000) and on 12,261,477 (2013: 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


2014
2013
2013


'000
'000
'000
Profit on ordinary activities after taxation
6,175
5,949
13,708
Basic earnings per ordinary share
50.4p
48.5p
111.8p
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 2014. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2014.
For further information, please contact:
London Security plc

Richard Pollard

Company Secretary
Tel : 01422 372852


WH Ireland

Andrew Kitchingman
Tel : 0113 394 6619
James Bavister
Tel : 0207 220 1677

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