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Sector
Technology
Size
Small Cap
Market Cap £294.3m
Enterprise Value £268.9m
Revenue £142.3m
Position in Universe 731st / 1820

London Security PLC - Interim results for six months ended 30 June 2020

Tue 15th September, 2020 7:00am
RNS Number : 9415Y
London Security PLC
15 September 2020
 

London Security PLC

 

(the "Group" or "Company")

 

Interim results for the six months ended 30 June 2020

 

 

Chairman's statement

J.G. Murray, Chairman

Financial highlights

 

•     Revenue £67.2m (2019: £71.7m)

•     Operating profit £7.6m (2019: £10.5m)

•     Earnings per share 39.9p (2019: 57.9p)

 

TRADING

The financial highlights illustrate that the Group's revenue decreased by £4.5 million (6.3%) to £67.2 million

Operating profit decreased by £2.9 million (27.6%) to £7.6 million.

The period under review reflects the impact from the coronavirus outbreak, which has significantly impacted all the countries in which we operate. Although there has been some return to normality in our business some customers remain closed and there are still restrictions on our operations. We must be prepared for further disruption should a second wave materialise in any of the countries in which we operate.

 

ACQUISITIONS

In the six months to the end of June, the Group has made no 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 the upper end of the price spectrum where an adequate return is envisaged by the Board.

 

CASH AND FINANCING

The Group's cash balance as at 30 June 2020 was £34.4 million. This is an increase of £7.3 million on the 31 December 2019 balance of £27.1 million

In May 2018 the Group entered into a new five year multi-currency facility until 2023 comprising £3.15 million and €8.40 million. To limit our exposure to increasing interest rates these loans are subject to interest rate caps of 1.5% LIBOR on the Sterling loan and 0.25% EURIBOR on the Euro loan.

 

PROSPECTS

As the situation continues, cash management will be a key consideration; the London Security Group has a healthy balance sheet, strong cash reserves and a track record for good cash generation. Debt recovery remains consistent with previous years and staff costs will be controlled using the furlough process where applicable. The Board therefore considers that its strong balance sheet and material net cash position means that it is well placed to navigate through the impact of the coronavirus outbreak.

 

DIVIDENDS

A final dividend in respect of 2019 of £0.20 per ordinary share was paid to shareholders on 10 July 2020.

 

 

 

J.G. Murray

Chairman

 15 September 2020



 

Consolidated income statement

for the six months ended 30 June 2020

 

 

 

 

Unaudited

Unaudited

Audited

 

 

 

six months

six months

year

 

 

 

ended

ended

ended

 

 

 

30 June

30 June

31 December

 

 

 

2020

2019

2019

 

 

Note

£'000

£'000

£'000


Revenue

 

67,164

71,737

146,920

 

Cost of sales

 

(16,452)

(17,932)

(36,293)


Gross profit

 

50,712

53,805

110,627

 

Distribution costs

 

(26,310)

(26,253)

(54,140)

 

Administrative expenses

 

(16,768)

(17,025)

(32,333)

 

Operating profit

 

7,634

10,527

24,154

 

EBITDA*

 

11,951

14,474

32,503

 

Depreciation and amortisation

 

(4,317)

(3,947)

(8,349)

 

Operating profit

 

7,634

10,527

24,154

 

Finance income

 

21

23

142

 

Finance costs

 

(96)

(121)

(254)

 

Finance costs - net

 

(75)

(98)

(112)


Profit before income tax

 

7,559

10,429

24,042

 

Income tax expense

 

(2,602)

(3,237)

(7,229)


Profit for the period

 

4,957

7,192

16,813


Profit is attributable to

 

 

 

 


Equity shareholders of the Company

 

4,895

7,103

16,653


Non-controlling interest

 

62

89

160

 

 

 

4,957

7,192

16,813


Earnings per share

 


 

 


Basic and diluted

3

39.9p

57.9p

135.8p


Dividends

 


 

 

 

Dividends paid per share

 

Nil

Nil

80.0p

 

* 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 2020

 

 

Unaudited

Unaudited

Audited

 

six months

six months

year

 

ended

ended

ended

 

30 June

30 June

31 December

 

2020

2019

2019

 

£'000

£'000

£'000

Profit for the financial period

4,957

7,192

16,813

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

3,196

47

(2,389)

- actuarial gain recognised in the Nu-Swift pension scheme

-

-

414

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

-

-

(145)

- actuarial loss recognised in the Ansul pension scheme

-

-

(412)

- movement on deferred tax relating to the Ansul pension scheme

-

-

103

Other comprehensive income for the period, net of tax

3,196

47

(2,429)

Total comprehensive income for the period

8,153

7,239

14,384

 



 

Consolidated statement of changes in equity

for the six months ended 30 June 2020

 

 

Share

Share

Capital

Merger

Other

Retained

Non-controlling

 

 

capital

premium

redemption

reserve

reserve

earnings

interest

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2019

123

344

1

2,033

8,831

100,078

302

111,712

Comprehensive income for the period:

 

 

 

 

 

 

 

 

- profit for the period

-

-

-

-

-

7,103

89

7,192

- exchange adjustments

-

-

-

-

47

-

-

47

Total comprehensive income for the period

-

-

-

-

47

7,103

89

7,239

Distribution to non-controlling interest

-

-

-

-

-

-

(23)

(23)

At 30 June 2019

123

344

1

2,033

8,878

107,181

368

118,928

Comprehensive income for the period:

 

 

 

 

 

 

 

 

- profit for the period

-

-

-

-

-

9,550

71

9,621

- exchange adjustments

-

-

-

-

(2,436)

-

-

(2,436)

- actuarial gain on pension schemes

-

-

-

-

 

2

-

2

- movement on deferred tax relating to pension schemes

-

-

-

-

-

(42)

-

(42)

Total comprehensive income for the period

-

-

-

-

(2,436)

9,510

71

7,145

Contributions by and distributions to owners of the Company:

 

 

 

 

 

 

 

 

- dividends

-

-

-

-

-

(9,809)

-

(9,809)

Distribution to non-controlling interest

-

-

-

-

-

-

(90)

(90)

At 31 December 2019

123

344

1

2,033

6,442

106,882

349

116,174

Comprehensive income for the period:

 

 

 

 

 

 

 

 

- profit for the period

-

-

-

-

-

4,895

62

4,957

- exchange adjustments

-

-

-

-

3,196

-

-

3,196

Total comprehensive income for the period

-

-

-

-

3,196

4,895

62

8,153

Distribution to non-controlling interest

-

-

-

-

-

-

(159)

(159)

At 30 June 2020

123

344

1

2,033

9,638

111,777

252

124,168

 



 

Consolidated statement of financial position

as at 30 June 2020

 

 

Unaudited

Unaudited

Audited

 

as at

as at

as at

 

30 June

30 June

31 December

 

2020

2019

2019

 

£'000

£'000

£'000

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

13,308

12,921

12,164

Right-of-use assets

2,382

2,752

2,360

Intangible assets

67,502

67,548

67,504

Deferred tax asset

779

807

683

Retirement benefit surplus

4,959

4,430

4,959

 

88,930

88,458

87,670

Current assets

 

 

 

Inventories

15,182

14,613

13,434

Trade and other receivables

32,499

29,129

27,822

Cash and cash equivalents

34,422

28,869

27,143

 

82,103

72,611

68,399

Total assets

171,033

161,069

156,069

Liabilities

 

 

 

Current liabilities

 

 

 

Trade and other payables

(29,119)

(23,808)

(23,158)

Income tax liabilities

(2,311)

(1,145)

(987)

Borrowings

(2,139)

(2,125)

(2,048)

Lease liabilities

(1,169)

(1,239)

(1,134)

Provision for liabilities and charges

-

(5)

-

 

(34,738)

(28,322)

(27,327)

Non-current liabilities

 

 

 

Trade and other payables

(1,275)

(1,026)

(850)

Borrowings

(4,270)

(6,379)

(5,122)

Lease liabilities

(1,209)

(1,535)

(1,256)

Derivative financial instruments

(43)

(54)

(47)

Deferred income tax liabilities

(2,873)

(2,756)

(2,909)

Retirement benefit obligations

(2,282)

(1,880)

(2,215)

Provision for liabilities and charges

(175)

(189)

(169)

 

(12,127)

(13,819)

(12,568)

Total liabilities

(46,865)

(42,141)

(39,895)

Net assets

124,168

118,928

116,174

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

9,638

8,878

6,442

Retained earnings

111,777

107,181

106,882

Equity attributable to owners of the Parent Company

123,916

118,560

115,825

Non-controlling interest

252

368

349

Total equity

124,168

118,928

116,174

 



Consolidated statement of cash flow

for the six months ended 30 June 2020

 

Unaudited

Unaudited

Audited

 

six months

six months

year

 

ended

ended

ended

 

30 June

30 June

31 December

 

2020

2019

2019

 

£'000

£'000

£'000

Cash flows from operating activities

 

 

 

Cash generated from operations

12,319

13,953

32,363

Interest paid

(66)

(74)

(160)

Income tax paid

(2,323)

(4,414)

(7,639)

Net cash generated from operating activities

9,930

9,465

24,564

Cash flows from investing activities

 

 

 

Acquisition of subsidiary undertakings

-

(1,007)

(2,264)

Purchases of property, plant and equipment

(2,344)

(2,536)

(3,974)

Proceeds from sale of property, plant and equipment

137

109

329

Purchases of intangible assets

(969)

(2,001)

(2,068)

Interest received

17

23

27

Net cash used in investing activities

(3,159)

(5,412)

(7,950)

Cash flows from financing activities

 

 

 

Repayments of borrowings

(1,015)

(1,040)

(2,091)

Payment of lease liabilities

(987)

(831)

(1,750)

Dividends paid to Company's shareholders

-

-

(9,809)

Distribution to non-controlling interest

(159)

(23)

(113)

Net cash used in financing activities

(2,161)

(1,894)

(13,763)

Effects of exchange rates on cash and cash equivalents

2,669

600

(1,818)

Net increase in cash in the period

7,279

2,759

1,033

Cash and cash equivalents at the beginning of the period

27,143

26,110

26,110

Cash and cash equivalents at the end of the period

34,422

28,869

27,143

 

 

 

 



 

Notes to the financial statements

for the six months ended 30 June 2020

 

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 2020 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 2019. The principal 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 2019 have been extracted from the statutory accounts for the year ended 31 December 2019, 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 or 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 and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and 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 of £4,895,000 (2019: £7,103,000) and on 12,261,477 (2019: 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

 

2020

2019

2019

 

£'000

£'000

£'000

Profit on ordinary activities after taxation

4,895

7,103

16,653

Basic earnings per ordinary share

39.9p

57.9p

135.8p

 

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 2020. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2020.

 

For further information, please contact:

 

London Security plc

Richard Pollard

Company Secretary                                                                            Tel : 01422 372852

 

WH Ireland Limited

Chris Fielding                                                                                       Tel : 0207 220 1666

 

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