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

London Security PLC - Interim Results

Fri 26th September, 2008 10:33am
RNS Number : 3991E
London Security PLC
26 September 2008


LONDON SECURITY PLC
Interim Statement FOR THE SIX MONTHS ENDED 30 JUNE 2008


CHAIRMAN'S STATEMENT


Financial highlights
Financial highlights of the unaudited results for the six months ended 30 June 2008 compared with the first half of 2007 are as follows:

* Revenue of 35.6 million (2007: 32.8 million)
* Operating profit of 8.8 million (2007: 8.1 million)
* Profit on ordinary activities before taxation of 6.4 million (2007: 7.3 million)
* Earnings per share of 35.9p (2007: 41.0p)

Trading and prospects
The Group's revenue has increased by 2.8 million (8.5%). This improvement is due to the full year effect of various initiatives implemented in 2007 and a favourable exchange rate. There is also an adverse effect following the sale of the Swissbusinesses, as results from these companies were included in the 2007 accounts.

For the same reasons, the Group's operating profit has increased by 0.7 million (8.6%).

Within finance costs the Group has suffered an additional charge of 1.8 million (2007: charge of 0.1 million) in respect of the exchange rate movement on its loans denominated in Euros. This is offset by a positive effect of using income streamsfrom Europe to repay the Group's Euro borrowings.

In mainland Europe, the Group has grown through our multi-service strategy, offering customers a complete range of services. This strategy has enabled the Group's evolution from solely an extinguisher supplier to our customers' safety partner.

In the UK, there has been strong positive customer response to new contracts and sales initiatives. Investment in training our field service team and a changed payment package continues to maintain market penetration.

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.

I am pleased to inform you that, in August 2008, we purchased the fire extinguisher division of Somati in Belgium. This business, now incorporated as Somati FIE NV, has revenue of 8.5 million Euros (6.5 million) and will contribute positively to theGroup in the second half of 2008.



Dividends and financing
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 was paid on 22 May 2008. Dividends paid totalled 16 million.

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.

J.G. Murray
Chairman
26 September 2008



CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS TO 30 JUNE 2008



Six months Six months Year to
to 30 June to 30 June 31 December
2008 2007 2007
*000 *000 *000
Revenue 35,627 32,815 66,605
Cost of sales (6,094) (5,308) (11,351)
Gross profit 29,533 27,507 55,254
Distribution costs (12,820) (11,294) (22,453)
Administrative expenses (7,924) (8,134) (16,008)
Operating profit 8,789 8,079 16,793
EBITDA* 9,987 8,983 18,785
Depreciation (1,198) (904) (1,992)
Operating profit 8,789 8,079 16,793
Profit on disposal of subsidiary * * 4,216
undertakings
Finance income 587 478 952
Finance costs (1,154) (1,139) (2,652)
Exchange loss on foreign (1,791) (149) (2,097)
currency loans
Finance costs * net (2,358) (810) (3,797)
Profit before income tax 6,431 7,269 17,212
Income tax expense (2,021) (2,215) (4,017)
Profit for the period 4,410 5,054 13,195
attributable to equity
shareholders of the company
Earnings per shareBasic and Note 2 35.9p 41.0p 107.3p
diluted
DividendsDividends paid per 130.0p * 50.0p
share

* Earnings before interest, taxation, depreciation, amortisation and impairment charges.

CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE


Six months Six months Year ended
to 30 June to 30 June 31 December
2008 2007 2007
'000 '000 '000
Profit for the financial period 4,410 5,054 13,195
Currency translation differences on foreign currency
net investments 1,123 (9) 1,328
Actuarial gain recognised in pension scheme - - 1,473
Movement on deferred tax relating to pension scheme (224) - (988)
Net gains/(losses) not recognised in the income statement 899 (9) 1,813
Total recognised income for the year attributable to equity 5,309 5,045 15,008
shareholders



CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2008



As at As at As at
30 June 30 June 31 December
2008 2007 2007
*000 *000 *000
Assets
Non current assets
Property, plant and equipment 8,457 7,246 7,863
Intangible assets 47,704 47,090 47,236
Deferred tax asset 508 1,258 743
Derivative financial instruments 299 132 *
56,968 55,726 55,842
Current assets
Inventories 6,239 4,990 5,687
Trade and other receivables 15,524 15,605 14,358
Cash and cash equivalents 11,439 10,249 11,807
33,202 30,844 31,852
Total assets 90,170 86,570 87,694
Liabilities
Current liabilities
Trade and other payables (15,123) (12,932) (14,475)
Income tax liabilities (1,527) (2,295) (1,891)
Borrowings (6,015) (5,071) (5,388)
Provision for liabilities and charges (107) (166) (49)
(22,772) (20,464) (21,803)
Non current liabilities
Trade and other payables (48) * (43)
Borrowings (40,209) (27,964) (27,022)
Derivative financial instruments * * (19)
Deferred tax liabilities * (34) (100)
Retirement benefit obligations (165) (4,167) (949)
Provision for liabilities and charges (19) (130) (130)
(40,441) (32,295) (28,263)
Total liabilities (63,213) (52,759) (50,066)
Net assets 26,957 33,811 37,628
Shareholders* equity
Ordinary shares 123 123 123
Merger reserve 2,033 2,033 2,033
Other reserves 2,194 (266) 1,071
Retained earnings 22,607 31,921 34,401
Total shareholders* equity 26,957 33,811 37,628



CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS TO 30 JUNE 2008




Six months Six months Year ended
to 30 June to 30 June 31 December
2008 2007 2007
*000 *000 *000
Cash flows from operating activities
Cash generated from operations 9,223 8,361 19,328
Interest paid (1,110) (1,017) (2,033)
Income tax paid (2,970) (2,150) (4,556)
Net cash generated from operating 5,143 5,194 12,739
activities
Cash flows from investing activities
Acquisition of subsidiary undertaking * * (231)
Net proceeds from sale of subsidiary * * 4,587
undertakings
Purchases of property, plant and (1,446) (1,289) (2,707)
equipment
Proceeds from sale of property, plant 209 238 401
and equipment
Purchases of intangible assets (564) (272) (578)
Proceeds from sale of intangible 22 * 18
assets
Interest received 222 113 278
Net cash used in investing activities (1,557) (1,210) 1,768
Cash flows from financing activities
Purchase of own shares * * (97)
New long term loans 15,000 * *
Repayments of borrowings (2,974) (2,366) (5,133)
Capital repayment of finance leases * (45) *
Equity dividends paid (15,980) * (6,146)
Net cash used in financing activities (3,954) (2,411) (11,376)
Net (decrease)/increase in cash in (368) 1,573 3,131
the period
Cash and cash equivalents at 11,807 8,676 8,676
beginning of the period
Cash and cash equivalents at the end 11,439 10,249 11,807
of the period


NOTES


1 NATURE OF Information
The financial information contained in this interim statement has been neither audited or reviewed by the auditors and does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The financial information forthe six months ended 30 June 2008 is unaudited and has been prepared on the basis of the accounting policies set out in the Group's 2007 Report and Accounts. Comparative figures for the year ended 31 December 2007 have been extracted from the statutoryaccounts for the year ended 31 December 2007 which have been delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain a statement under sections 237(2) or 237(3) of the Companies Act1985.
2 Earnings per share
The calculation of basic earnings per ordinary share is based on the profit on ordinary activities after taxation of 4,410,000 (2007: 5,054,000) and on 12,294,798 (2007: 12,294,798) ordinary shares, being the weighted average number of ordinaryshares 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 12,294,798 (2007: 12,294,798). After taking into account the effect of dilutive securities, the basic EPS and adjusted EPS figures are unaltered.
Six months Six months Year ended
to 30 June to 30 June 31 December
2008 2007 2007
'000 '000 '000
Profit on ordinary activities after taxation 4,410 5,054 13,195
Basic earnings per ordinary share 35.9p 41.0p 107.3p


3 Actuarial valuation of pension scheme
In common with many other companies, the Group has not prepared an actuarial valuation of pension scheme assets and liabilities for the 2008 interim statement. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's 2008 Report and Accounts.

4 Consolidated statement of changes in equity
Six months Six months Year ended
to 30 June to 30 June 31 December
2008 2007 2007
'000 '000 '000
Profit for the financial period 4,410 5,054 13,195
Dividends (15,980) - (6,146)
Currency translation differences on foreign
currency
net investments 1,123 (9) 1,328
Purchase of own shares - (97) (97)
Actuarial gain recognised in pension scheme - - 1,473
Movement on deferred tax relating to pension scheme (224) - (988)
Net increase in shareholders' funds (10,671) 4,948 8,765
Shareholders' funds at the beginning of the period 37,628 28,863 28,863
Shareholders' funds at the end of the period 26,957 33,811 37,628




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

END

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