REG - London Security PLC - Interim Results for Six Months Ended 30 June 2021

London SecurityAnnouncement

27/09/2021 10:25

RNS Number : 0585N
  
London Security PLC
  
27 September 2021
  
 

 
London Security PLC
 
(the "Group" or "Company")
 
Interim Results for the Six Months Ended 30 June 2021
 
Chairman's Statement
J.G. Murray, Chairman
 
Financial Highlights
 
•     Revenue £82.7m (2020: £67.2m)
•     Operating profit £12.3m (2020: £7.6m)
•     Earnings per share 75.6p (2020: 39.9p)
 
TRADING
The financial highlights illustrate that the Group's revenue increased by £15.5 million (23.1%) to £82.7 million.
Operating profit increased by £4.7 million (61.8%) to £12.3 million. 
Earnings per share increased by 35.7p (89.5%) to 75.6p.
The period under review reflects the impact from the coronavirus outbreak, which significantly impacted all the countries in which we operate in quarter 1 and quarter 2 of 2020. In 2021 there has largely been a return to normality in our business although some customers remain closed and there are still some restrictions on our operations to help reduce transmission. We must be prepared for further disruption should further waves materialise in any of the countries in which we operate.
 
ACQUISITIONS
In the six months to the end of June, the Group made four acquisitions. It remains a principal aim of the Group to grow through acquisition.  Acquisitions are being sought throughout Europe and the Group will invest where an adequate return is envisaged by the Board.
 
CASH AND FINANCING
The Group's cash balance as at 30 June 2021 was £43.7 million. This is an increase of £6.2 million on the 31 December 2020 balance of £37.5 million.
In May 2018 the Group entered into a 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. The Board therefore considers that with its strong balance sheet and material net cash position the Group is well placed to prosper from the rebound in the economy as the vaccine programmes gain momentum in 2021.
 
DIVIDENDS
A final dividend in respect of 2020 of £0.40 per ordinary share was paid to shareholders on 9 July 2021.
 
 
J.G. Murray
Chairman
27 September 2021
 
 
Consolidated income statement
for the six months ended 30 June 2021
 




 


 


 


Unaudited


Unaudited


Audited




 


 


 


six months


six months


year




 


 


 


ended


ended


ended




 


 


 


30 June


30 June


31 December




 


 


 


2021


2020


2020





 




 




Note




£'000




£'000




£'000





 


Revenue


 


82,739


67,164


152,723




 



Cost of sales




 




(21,601)




(16,452)




(37,387)





 


Gross profit


 


61,138


50,712


115,336




 


Distribution costs


 


(30,188)


(26,310)


(56,281)




 



Administrative expenses




 




(18,670)




(16,768)




(34,355)






 




Operating profit




 




12,280




7,634




24,700





 


EBITDA[*]


 


16,799


11,951


33,547





 




Depreciation and amortisation




 




(4,519)




(4,317)




(8,847)






 




Operating profit




 




12,280




7,634




24,700





 


Finance income


 


21


21


78




 



Finance costs




 




(99)




(96)




(201)





 



Finance costs - net




 




(78)




(75)




(123)





 


Profit before income tax


 


12,202


7,559


24,577




 



Income tax expense




 




(2,862)




(2,602)




(6,536)





 



Profit for the period




 




9,340




4,957




18,041





 


Profit is attributable to


 


 


 


 




 


Equity shareholders of the Company


 


9,267


4,895


17,853




 



Non-controlling interest




 




73




62




188





 



 




 




9,340




4,957




18,041





 


Earnings per share


 


 


 


 




 


Basic and diluted


3


75.6p


39.9p


145.6p




 


Dividends 


 


 


 


 




 



Dividends paid per share




 




Nil




Nil




60p





 
* 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 2021
 




 


Unaudited


Unaudited


Audited




 


six months


six months


year




 


ended


ended


ended




 


30 June


30 June


31 December




 


2021


2020


2020





 




£'000




£'000




£'000






Profit for the financial period




9,340




4,957




18,041





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


(2,679)


3,196


2,396




- actuarial gain recognised in the Nu-Swift pension scheme


-


-


(4,554)




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


-


-


1,594




- actuarial loss recognised in the Ansul pension scheme


-


-


(17)





- movement on deferred tax relating to the Ansul pension scheme




-




-




5






Other comprehensive income for the period, net of tax




(2,679)




3,196




(576)






Total comprehensive income for the period




6,661




8,153




17,653





 
 
Consolidated statement of changes in equity
for the six months ended 30 June 2021
 




 


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 2020




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





Comprehensive income for the period:


 


 


 


 


 


 


 


 




- profit for the period


-


-


-


-


-


12,958


126


13,084




- exchange adjustments


-


-


-


-


(800)


-


-


(800)




- actuarial loss on pension schemes


-


-


-


-


-


(4,571)


-


(4,571)





- movement on deferred tax relating to pension schemes




-




-




-




-




-




1,599




-




1,599






Total comprehensive income for the period




-




-




-




-




(800)




9,986




126




9,312





Contributions by and distributions to owners of the Company:


 


 


 


 


 


 


 


 





- dividends




-




-




-




-




-




(7,356)




-




(7,356)






Distribution to non-controlling interest




-




-




-




-




-




-




(1)




(1)






At 31 December 2020




123




344




1




2,033




8,838




114,407




377




126,123





Comprehensive income for the period:


 


 


 


 


 


 


 


 




- profit for the period


-


-


-


-


-


9,267


73


9,340





- exchange adjustments




-




-




-




-




(2,679)




-




-




(2,679)






Total comprehensive income for the period




-




-




-




-




(2,679)




9,267




73




6,661






Distribution to non-controlling interest




-




-




-




-




-




-




(28)




(28)






Reduction in non-controlling interest




--




-




-




-




-




(123)




(103)




(226)






At 30 June 2021




123




344




1




2,033




6,159




123,551




319




132,530





 
 
Consolidated statement of financial position
as at 30 June 2021
 




 


Unaudited


Unaudited


Audited




 


as at


as at


as at




 


30 June


30 June


31 December




 


2021


2020


2020





 




£'000




£'000




£'000





Assets


 


 


 




Non-current assets


 


 


 




Property, plant and equipment


13,634


13,308


13,046




Right-of-use assets


3,223


2,382


3,254




Intangible assets


66,009


67,502


66,311




Deferred tax asset


799


779


790





Retirement benefit surplus




445




4,959




445






 




84,110




88,930




83,846





Current assets


 


 


 




Inventories


15,861


15,182


14,953




Trade and other receivables


30,415


32,499


33,174





Cash and cash equivalents




43,678




34,422




37,456






 




89,954




82,103




85,583






Total assets




174,064




171,033




169,429





Liabilities


 


 


 




Current liabilities


 


 


 




Trade and other payables


(27,110)


(29,119)


(27,582)




Income tax liabilities


(2,300)


(2,311)


(2,074)




Borrowings


(2,397)


(2,139)


(2,518)




Lease liabilities


(1,376)


(1,169)


(1,451)





Provision for liabilities and charges




-




-




(16)






 




(33,183)




(34,738)




(33,641)





Non-current liabilities


 


 


 




Trade and other payables


(923)


(1,275)


(941)




Borrowings


(2,051)


(4,270)


(3,170)




Lease liabilities


(1,851)


(1,209)


(1,851)




Derivative financial instruments


(28)


(43)


(36)




Deferred income tax liabilities


(1,081)


(2,873)


(1,146)




Retirement benefit obligations


(2,249)


(2,282)


(2,349)





Provision for liabilities and charges




(168)




(175)




(172)






 




(8,351)




(12,127)




(9,665)






Total liabilities




(41,534)




(46,865)




(43,306)






Net assets




132,530




124,168




126,123





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


6,159


9,638


8,838





Retained earnings




123,551




111,777




114,407





Equity attributable to owners of the Parent Company


132,211


123,916


125,746





Non-controlling interest




319




252




377






Total equity




132,530




124,168




126,123





 
 
Consolidated statement of cash flow
for the six months ended 30 June 2021
 




 


Unaudited


Unaudited


Audited




 


six months


six months


year




 


ended


ended


ended




 


30 June


30 June


31 December




 


2021


2020


2020





 




£'000




£'000




£'000





Cash flows from operating activities


 


 


 




Cash generated from operations


20,342


12,319


32,862




Interest paid


(61)


(66)


(118)





Income tax paid




(4,687)




(2,323)




(5,524)






Net cash generated from operating activities




15,594




9,930




27,220





Cash flows from investing activities


 


 


 




Acquisition of subsidiary undertakings


(1,496)


-


(516)




Purchases of property, plant and equipment


(2,977)


(2,344)


(5,063)




Proceeds from sale of property, plant and equipment


384


137


462




Purchases of intangible assets


(1,644)


(969)


(1,244)





Interest received




13




17




27






Net cash used in investing activities




(5,720)




(3,159)




(6,334)





Cash flows from financing activities


 


 


 




Repayments of borrowings


(1,071)


(1,015)


(2,121)




Payment of lease liabilities


(1,097)


(987)


(2,036)




Dividends paid to Company's shareholders


-


-


(7,356)





Distribution to non-controlling interest




(28)




(159)




(160)






Net cash used in financing activities




(2,196)




(2,161)




(11,673)





Net increase in cash in the period


7,678


4,610


9,213





Cash and cash equivalents at the beginning of the period




37,456




27,143




27,143






Effects of exchange rates on cash and cash equivalents




(1,456)  




           2,669




 1,100






Cash and cash equivalents at the end of the period




43,678




34,422




37,456





 
 
 
Notes to the financial statements
for the six months ended 30 June 2021
 
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 2021 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 2020. 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 2020 have been extracted from the statutory accounts for the year ended 31 December 2020, 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 £9,267,000 (2020: £4,895,000) and on 12,261,477 (2020: 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




 


2021


2020


2020





 




£'000




£'000




£'000






Profit on ordinary activities after taxation




9,267




4,895




17,853






Basic earnings per ordinary share




75.6p




39.9p




145.6p





 
 
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 2021. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2021.
 
The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No. 596/2014, and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.
 
For further information, please contact:
 
London Security plc
Richard Pollard
Company Secretary                                                                             Tel : 01422 372852
 
WH Ireland Limited
Chris Fielding                                                                                       Tel : 0207 220 1666
Ben Good
 

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