REG - London Security PLC - Final Results for the Year Ended 31 December 2022
19/05/2023 09:45
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RNS Number : 0293A London Security PLC 19 May 2023
19/05/2023
London Security plc
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7
OF THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH IS PART OF UK LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Final Results for the Year Ended 31 December 2022
Chairman's statement
J.G. Murray, Chairman
Financial highlights
Financial highlights of the audited results for the year ended 31 December
2022 compared with the year ended 31 December 2021 are as follows:
• revenue of £188.9 million (2021: £166.6 million);
• operating profit of £27.2 million (2021: £27.2 million);
• profit for the year of £20.2 million (2021: £20.0 million);
• cash of £34.0 million (2021: £35.7 million);
• earnings per share for the year of £1.65 (2021: £1.62); and
• a dividend per share of £0.84 (2021: £0.80).
Trading review
The financial highlights illustrate that the Group's revenue increased by
£22.3 million (13.4%) to £188.9 million and operating profit remained at
£27.2 million. These results reflect:
• the effect of input inflation which our companies initially
absorbed, but as it became clear that it was a longer term trend we passed on
appropriate price increases to our customers;
• the positive impact of acquisitions in 2022 and the full year's
trading of acquisitions in 2021;
• improved performance from our service business in continental
Europe;
• continued improvement from newer service offerings (e.g. emergency
lights and passive fire protection); and
• the movement in the Euro to Sterling average exchange rate, which
had an adverse effect of £1.3 million on reported revenue and £0.2 million
on operating profit.
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 acquired seven security businesses and has grown its presence
in Austria, the United Kingdom, Belgium, Germany and Luxembourg. The Group has
also continued with the acquisition of service contracts from smaller
well-established businesses for integration into the Group's existing
subsidiaries.
Management and staff
2022 was a year in which the staff performed well and, on behalf of the
shareholders, 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 2021 of £0.42 per ordinary share was paid to
shareholders on 8 July 2022. An interim dividend in respect of 2022 of £0.42
per ordinary share was paid to shareholders on 28 November 2022. The Board is
recommending the payment of a final dividend in respect of 2022 of £0.42 per
ordinary share to be paid on 7 July 2023 to shareholders on the register on 9
June 2023. The shares will be marked ex-dividend on 8 June 2023.
Covid-19 impact assessment
In 2022 there was largely a return to normality in our business. The high
level of business failures predicted by some commentators did not occur.
Future prospects
The markets in which we operate are entering what is likely to be a period of
low growth with continued high inflation. The London Security Group however
has a healthy balance sheet, strong cash reserves and a track record for good
cash generation. The Board therefore considers that the Group is well placed
to weather any downturn. We will also continue to invest in our future and the
Group plans to continue to grow through acquisitions.
Annual General Meeting
The Annual General Meeting ("AGM") will be held at 2 Jubilee Way, Elland, West
Yorkshire HX5 9DY, on 29 June 2023 at 11.30 am. The Company confirms that
shareholders are able to attend in person should they wish to do so. However,
we strongly encourage shareholders to vote on all resolutions by completing
the enclosed form of proxy for use at that Meeting, which you are requested to
return in accordance with the instructions on the form.
J.G. Murray
Chairman
19 May 2023
Consolidated income statement
for the year ended 31 December 2022
2022 2021
Note £'000 £'000
Revenue 188,898 166,634
Cost of sales (49,748) (43,096)
Gross profit 139,150 123,538
Distribution costs (70,565) (59,974)
Administrative expenses (41,420) (36,390)
Operating profit 27,165 27,174
EBITDA(*) 37,269 36,273
Depreciation and amortisation (10,104) (9,099)
Operating profit 27,165 27,174
Finance income 31 28
Finance costs (242) (204)
Finance costs - net (211) (176)
Profit before income tax 26,954 26,998
Income tax expense (6,742) (6,990)
Profit for the year 20,212 20,008
Profit is attributable to:
Equity shareholders of the Company 20,203 19,907
Non-controlling interest 9 101
20,212 20,008
Earnings per share
Basic and diluted 1 164.8p 162.4p
* 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 2022
2022 2021
£'000 £'000
Profit for the financial year 20,203 19,907
Other comprehensive (expense)/income:
Items that may be reclassified subsequently to profit or loss:
- currency translation differences on foreign currency net investments 3,602 (3,782)
Items that will not be reclassified subsequently to profit or loss:
- actuarial loss recognised in the Nu-Swift Pension Scheme (111) (70)
- movement on deferred tax relating to the Nu-Swift Pension Scheme surplus 38 25
- actuarial gain recognised in the Ansul Pension Scheme 1,249 104
- movement on deferred tax relating to the Ansul Pension Scheme deficit (285) (26)
Other comprehensive expense for the year, net of tax 4,493 (3,749)
Equity shareholders of the Company 24,696 16,158
Non-controlling interest 9 101
Total comprehensive income for the year 24,705 16,259
Consolidated statement of changes in equity
for the year ended 31 December 2022
Ordinary Share Capital redemption Merger Other Retained Non-controlling Total
shares premium reserve reserve reserves earnings interest equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2021 123 344 1 2,033 8,838 114,407 377 126,123
Total comprehensive income for the year
Profit for the financial year - - - - - 19,907 101 20,083
Other comprehensive income/(expense):
- exchange adjustments - - - - (3,782) - - (3,782)
- actuarial gain on pension schemes - - - - - 34 - 34
- net movement on deferred tax relating to pension deficit - - - - - (1) - (1)
Total comprehensive income/(expense) for the year - - - - (3,782) 19,940 101 16,259
Contributions by and distributions to owners of the Company:
- dividends - - - - - (9,807) - (9,807)
Distribution to non-controlling interest - - - - - - (150) (150)
Reduction in non-controlling interest - - - - - (468) (210) (678)
At 31 December 2021 and 1 January 2022 123 344 1 2,033 5,056 124,072 118 131,747
Total comprehensive income for the year
Profit for the financial year - - - - - 20,203 9 20,212
Other comprehensive income/(expense):
- exchange adjustments - - - - 3,602 - - 3,602
- actuarial gain on pension schemes - - - - - 1,138 - 1,138
- net movement on deferred tax relating to pension deficit - - - - - (247) - (247)
Total comprehensive income/(expense) for the year - - - - 3,602 21,094 9 24,705
Contributions by and distributions to owners of the Company:
- purchase of own shares - - - - - (13) - (13)
- dividends - - - - - (10,298) - (10,298)
- - - - - (10,311) - (10,311)
Reduction in non-controlling interest - - - - - (158) (127) (285)
At 31 December 2022 123 344 1 2,033 8,658 134,697 - 145,856
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 2022
2022 2021
£'000 £'000
Assets
Non-current assets
Property, plant and equipment 14,940 13,990
Right of use assets 5,975 4,297
Intangible assets 77,076 70,074
Deferred tax asset 694 778
Retirement benefit surplus 276 380
98,961 89,519
Current assets
Inventories 22,260 16,423
Trade and other receivables 40,699 33,021
Cash and cash equivalents 33,962 35,681
96,921 85,125
Total assets 195,882 174,644
Liabilities
Current liabilities
Trade and other payables (36,431) (28,061)
Income tax liabilities (1,440) (1,607)
Borrowings (1,598) (2,430)
Lease liabilities (2,040) (1,603)
Provision (10) (13)
(41,519) (33,714)
Non-current liabilities
Trade and other payables (936) (1,058)
Borrowings (236) (1,340)
Lease liabilities (4,033) (2,740)
Derivative financial instruments - (20)
Deferred tax liabilities (2,211) (1,731)
Retirement benefit obligations (953) (2,144)
Provision (138) (150)
(8,507) (9,183)
Total liabilities (50,026) (42,897)
Net assets 145,856 131,747
Shareholders' equity
Ordinary shares 123 123
Share premium 344 344
Capital redemption reserve 1 1
Merger reserve 2,033 2,033
Other reserves 8,658 5,056
Retained earnings 134,697 124,072
Equity attributable to owners of the Parent Company 145,856 131,629
Non-controlling interest - 118
Total equity 145,856 131,747
Consolidated statement of cash flows
for the year ended 31 December 2022
2022 2021
£'000 £'000
Cash flows from operating activities
Cash generated from operations 30,489 33,909
Interest paid (111) (106)
Income tax paid (7,055) (7,122)
Net cash generated from operating activities 23,323 26,681
Cash flows from investing activities
Acquisition of subsidiary undertakings (net of cash acquired) (4,078) (4,871)
Purchases of property, plant and equipment (4,626) (4,880)
Proceeds from the sale of property, plant and equipment 730 682
Purchases of intangible assets (3,193) (2,693)
Interest received 4 7
Net cash used in investing activities (11,163) (11,755)
Cash flows from financing activities
Repayments of borrowings (2,312) (2,119)
Payment of lease liabilities (2,356) (2,072)
Dividends paid to the Company's shareholders (10,298) (9,807)
Purchase of own shares (13) -
Distribution to non-controlling interest - (150)
Reduction in non-controlling interest (285) (678)
Net cash used in financing activities (15,264) (14,826)
Net increase in cash in the year (3,104) 100
Cash and cash equivalents at the beginning of the year 35,681 37,456
Effects of exchange rates on cash and cash equivalents 1,385 (1,875)
Cash and cash equivalents at the end of the year 33,962 35,681
Notes to the financial statements
for the year ended 31 December 2022
1 Earnings per share
The calculation of basic earnings per ordinary share ("EPS") is based on the
profit on ordinary activities after taxation of £20,212,000 (2021:
£19,907,000) and on 12,261,477 (2021: 12,261,477) ordinary shares, being the
weighted average number of ordinary shares in issue 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 and diluted earnings per share as there are no potentially dilutive
shares outstanding.
2022 2021
£'000 Pence £'000 Pence
Profit on ordinary activities after taxation 20,212 164.8 19,907 162.4
2 This financial information within this 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 2022
have been extracted from the full accounts of the Group for that year which
received an unmodified auditor's report, and which have not yet been delivered
to the Registrar of Companies. The financial information for the year ended
31 December 2021 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 unmodified and does not include a statement under
section 498(2) or (3) of the Companies Act 2006.
This preliminary announcement has been prepared in accordance with the
recognition and measurement principles of UK adopted international accounting
standards in conformity with the requirements of the Companies Act 2006 and in
accordance with the AIM rules. The financial information included in this
preliminary announcement does not include all the disclosures required in
accounts prepared in accordance with UK adopted international accounting
standards in conformity with the requirements of the Companies Act 2006 and
accordingly it does not itself comply with UK adopted international accounting
standards in conformity with the requirements of the Companies Act 2006. The
accounting policies used in the preparation of this preliminary announcement
have remained unchanged from those set out in the statutory accounts for the
year ended 31 December 2021. They are also consistent with those in the full
accounts for the year ended 31 December 2022, which have yet to be published.
The Group will post its annual report and accounts to shareholders on 25 May
2023, a copy of the annual report and accounts will be available on the
company's website (www.londonsecurity.org (http://www.londonsecurity.org/) ).
The person responsible for arranging the release of this announcement on
behalf of the Company is Richard Pollard, Company Secretary.
Enquiries
London Security plc
Richard Pollard Tel: 01422 372 852
Company Secretary
WH Ireland Limited
Chris Fielding Tel: 0207 220 1666
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