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

London SecurityAnnouncement

15/09/2020 07:01

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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