REG - London Security PLC - Interim results for six months ended 30 June 2022
09/09/2022 07:00
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RNS Number : 7821Y London Security PLC 09 September 2022
London Security PLC
(the "Group" or "Company")
Interim results for the six months ended 30 June 2022
Chairman's statement
J.G. Murray, Chairman
Financial highlights
• Revenue £88.6m (2021: £82.7m)
• Operating profit £10.9m (2021: £12.3m)
• Earnings per share 68.3p (2021: 75.6p)
Trading
The financial highlights illustrate that the Group's revenue increased by
£5.9 million (7.1%) to £88.6 million.
Operating profit decreased by £1.4 million (11.4%) to £10.9 million.
The period under review reflects the impact from upward input price pressures
in all of the countries in which we operate. These increases are being driven
by worldwide supply chain disruption, energy and wage inflation following the
war in Ukraine and the recovery from the coronavirus pandemic. Some of these
supply price increases have been passed on to our customers, but we have
absorbed an element of these which this has reduced our operating profit. The
inflationary spike has had an adverse effect on business confidence which we
are starting to experience as a reduced willingness to invest by our
customers.
Acquisitions
In the six months to the end of June the Group acquired four companies on the
continent. In addition it strengthened its presence in Germany, Austria and
the United Kingdom through the acquisition of service contracts to be
integrated into the Group's existing subsidiaries. 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 2022 was £35.3 million. This is a
decrease of £0.4 million on the 31 December 2021 balance of £35.7 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% SONIA on the Sterling loan and 0.25% EURIBOR on the Euro loan.
Prospects
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 cope with any economic downturn.
Dividends
A final dividend in respect of 2021 of £0.42 per ordinary share was paid to
shareholders on 8 July 2022.
J.G. Murray
Chairman
9 September 2022
Consolidated income statement
for the six months ended 30 June 2022
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
Note £'000 £'000 £'000
Revenue 88,613 82,739 166,634
Cost of sales (23,380) (21,601) (43,096)
Gross profit 65,233 61,138 123,538
Distribution costs (33,937) (30,188) (59,974)
Administrative expenses (20,394) (18,670) (36,390)
Operating profit 10,902 12,280 27,174
EBITDA* 15,742 16,799 36,273
Depreciation and amortisation (4,840) (4,519) (9,099)
Operating profit 10,902 12,280 27,174
Finance income 1 21 28
Finance costs (100) (99) (204)
Finance costs - net (99) (78) (176)
Profit before income tax 10,803 12,202 26,998
Income tax expense (2,423) (2,862) (6,990)
Profit for the period 8,380 9,340 20,008
Profit is attributable to:
Equity shareholders of the Company 8,374 9,267 19,907
Non-controlling interest 6 73 101
8,380 9,340 20,008
Earnings per share
Basic and diluted 3 68.3p 75.6p 162.4p
Dividends
Dividends paid per share Nil Nil 80p
* 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 2022
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Profit for the financial period 8,380 9,340 20,008
Other comprehensive income/(expense):
Items that will not be reclassified subsequently to profit or loss:
- currency translation differences on foreign operation consolidation, net of 1,087 (2,679) (3,782)
tax
- actuarial gain recognised in the Nu-Swift pension scheme - - (70)
- movement on deferred tax relating to the Nu-Swift pension scheme - - 25
- actuarial loss recognised in the Ansul pension scheme - - 104
- movement on deferred tax relating to the Ansul pension scheme - - (26)
Other comprehensive income for the period, net of tax 1,087 (2,679) (3,749)
Total comprehensive income for the period 9,467 6,661 16,259
Consolidated statement of changes in equity
for the six months ended 30 June 2022
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 2021 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
Comprehensive income for the period:
- profit for the period - - - - - 10,640 28 10,668
- exchange adjustments - - - - (1,103) - - (1,103)
- actuarial gain on pension schemes - - - - - 34 - 34
- movement on deferred tax relating to pension schemes - - - - - (1) - (1)
Total comprehensive income for the period - - - - (1,103) 10,673 28 9,598
Contributions by and distributions to owners of the Company:
- dividends - - - - - (9,807) - (9,807)
Distribution to non-controlling interest - - - - - - (122) (122)
Reduction in non-controlling interest - - - - - (345) (107) (452)
At 31 December 2021 123 344 1 2,003 5,056 124,072 118 131,747
Comprehensive income for the period:
- profit for the period - - - - - 8,374 6 8,380
- exchange adjustments - - - - 1,087 - - 1,087
Total comprehensive income for the period - - - - 1,087 8,374 6 9,467
At 30 June 2022 123 344 1 2,003 6,143 132,446 124 141,214
Consolidated statement of financial position
as at 30 June 2022
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 14,186 13,634 13,990
Right-of-use assets 5,297 3,223 4,297
Intangible assets 73,643 66,009 70,074
Deferred tax asset 814 799 778
Retirement benefit surplus 380 445 380
94,320 84,110 89,519
Current assets
Inventories 18,326 15,861 16,423
Trade and other receivables 37,800 30,415 33,021
Cash and cash equivalents 35,256 43,678 35,681
91,382 89,954 85,125
Total assets 185,702 174,064 174,644
Liabilities
Current liabilities
Trade and other payables (30,336) (27,110) (28,061)
Income tax liabilities (564) (2,300) (1,607)
Borrowings (2,437) (2,397) (2,430)
Lease liabilities (1,722) (1,376) (1,603)
Derivative financial instruments (20) - -
Provision for liabilities and charges (14) - (13)
(35,093) (33,183) (33,714)
Non-current liabilities
Trade and other payables (1,033) (923) (1,058)
Borrowings (431) (2,051) (1,340)
Lease liabilities (3,627) (1,851) (2,740)
Derivative financial instruments - (28) (20)
Deferred income tax liabilities (1,982) (1,081) (1,731)
Retirement benefit obligations (2,180) (2,249) (2,144)
Provision for liabilities and charges (142) (168) (150)
(9,395) (8,351) (9,183)
Total liabilities (44,488) (41,534) (42,897)
Net assets 141,214 132,530 131,747
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 6,143 6,159 5,056
Retained earnings 132,446 123,551 124,072
Equity attributable to owners of the Parent Company 141,090 132,211 131,629
Non-controlling interest 124 319 118
Total equity 141,214 132,530 131,747
Consolidated statement of cash flow
for the six months ended 30 June 2022
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations 13,501 20,342 33,909
Interest paid (50) (61) (106)
Income tax paid (5,617) (4,687) (7,122)
Net cash generated from operating activities 7,834 15,594 26,681
Cash flows from investing activities
Acquisition of subsidiary undertakings (3,058) (1,496) (4,871)
Purchases of property, plant and equipment (1,923) (2,977) (4,880)
Proceeds from sale of property, plant and equipment 380 384 682
Purchases of intangible assets (1,661) (1,644) (2,693)
Interest received 1 13 7
Net cash used in investing activities (6,261) (5,720) (11,755)
Cash flows from financing activities
Repayments of borrowings (1,332) (1,071) (2,119)
Payment of lease liabilities (1,057) (1,097) (2,072)
Dividends paid to Company's shareholders - - (9,807)
Distribution to non-controlling interest - - (150)
Reduction in non-controlling interest - (28) (678)
Net cash used in financing activities (2,389) (2,196) (14,826)
Net increase in cash in the period (816) 7,678 100
Cash and cash equivalents at the beginning of the period 35,681 37,456 37,456
Effects of exchange rates on cash and cash equivalents 391 (1,456) (1,875)
Cash and cash equivalents at the end of the period 35,256 43,678 35,681
Notes to the financial statements
for the six months ended 30 June 2022
1 Nature of information
The financial information contained in this Interim Statement has been neither
audited nor reviewed by the auditor 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 2022 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 2021. 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 2021 have been extracted
from the statutory accounts for the year ended 31 December 2021, which have
been delivered to the Registrar of Companies. The Independent Auditor's 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 £8,374,000 (2021: £9,267,000) and on
12,261,477 (2021: 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
2022 2021 2021
£'000 £'000 £'000
Profit on ordinary activities after taxation 8,374 9,267 19,907
Basic earnings per ordinary share 68.3p 75.6p 162.4p
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 2022. In
accordance with IAS 19 such a valuation will be prepared for the purposes of
the Group's Annual Report and Accounts 2022.
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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