REG - London Security PLC - Interim Results

London SecurityAnnouncement

14/09/2018 07:05

RNS Number : 7447A
London Security PLC
14 September 2018
 


London Security PLC
(the "Group")
 
Interim results for the six months ended 30 June 2018
 
 
Chairman's statement
 
FINANCIAL HIGHLIGHTS
Revenue £66.7m                                 2017: £60.6m
Operating profit £10.1m                       2017: £9.5m
Earnings per share 56.2p                    2017: 51.5p
 
TRADING
The financial highlights illustrate that the Group's revenue increased by £6.1 million (10.1%) to £66.7 million. The underlying revenue increase can largely be attributed to business acquisitions and improvements in the scheduling of service work. These results are also impacted by the movement in the Euro to Sterling average exchange rate over the period, which has decreased from 1.16 to 1.13. This movement in exchange rates had a positive effect of £1.3 million on reported turnover.
Operating profit increased by £0.6 million (6.3%) to £10.1 million. This increase in operating profit is again primarily caused by business acquisitions and improved service scheduling. Adjusting for the change in exchange rates on the same basis as above, operating profit would have been £9.8 million
ACQUISITIONS
In the six months to the end of June, the Group acquired a total of three well established businesses at a cost of £1.9 million (2017: six businesses at a cost of £1.1 million). The integration of these businesses into the Group has, so far, been successful and results are in line with expectations. One of these acquisitions, Linde, expanded the Group's business into Denmark.
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.
 
FINANCING
At 30 June 2017 and 31 December 2017 the Group's total borrowings had been disclosed as current liabilities as they were due for repayment in May 2018. In May 2018 the Group entered into a new five year multi-currency facility until 2023 comprising £3.15 million and €8.40 million. As a result £8.4 million of these borrowings have been disclosed as non-current liabilities. 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
The fire security market is experiencing increased competition and downward pressure on prices. Our strategy is to continue to concentrate on the highest levels of customer service to mitigate this. We do not expect the economic environment to become any easier in 2018. Nonetheless your Group remains in a strong position and will continue to focus on meeting the needs of our customers and our shareholders.
 
DIVIDENDS
A final dividend in respect of 2017 of £0.40 per ordinary share was paid to shareholders on 5 July 2018.
 
J.G. Murray
Chairman
14 September 2018
 
 
Consolidated income statement
for the six months ended 30 June 2018
 




 


 


Unaudited


Unaudited


Audited




 


 


six months


six months


year




 


 


ended


ended


ended




 


 


30 June


30 June


31 December




 


 


2018


2017


2017




 


Note


£'000


£'000


£'000




Revenue


 


66,726


60,631


125,873




Cost of sales


 


(15,402)


(12,213)


(26,626)




Gross profit


 


51,324


48,418


99,247




Distribution costs


 


(25,215)


(23,682)


(47,751)




Administrative expenses


 


(15,969)


(15,250)


(29,757)




Operating profit


 


10,140


9,486


21,739




EBITDA*


 


13,531


12,382


27,934




Depreciation and amortisation


 


(3,391)


(2,896)


(6,195)




Operating profit


 


10,140


9,486


21,739




Finance income


 


28


87


237




Finance costs


 


(97)


(187)


(392)




Finance costs - net


 


(69)


(100)


(155)




Profit before income tax


 


10,071


9,386


21,584




Income tax expense


 


(3,133)


(3,068)


(7,239)




Profit for the period


6,938


6,318


14,345




Profit is attributable to


 


 


 


 




Equity shareholders of the Company


 


6,891


6,318


14,310




Non-controlling interest


 


47


-


35




 


 


6,938


6,318


14,345




Earnings per share


 


 


 


 




Basic and diluted


3


56.2p


51.5p


116.7p




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 2018
 




 


Unaudited


Unaudited


Audited


 




 


six months


six months


year


 




 


ended


ended


ended


 




 


30 June


30 June


31 December


 




 


2018


2017


2017


 




 


£'000


£'000


£'000


 




Profit for the financial period


6,938


6,318


14,345




Other comprehensive (expense)/income:


 


 


 




Items that will not be reclassified subsequently to profit or loss:


 


 


 




- currency translation differences on foreign operation consolidation, net of tax


(418)


836


1,439




- actuarial gain recognised in the Nu-Swift pension scheme


-


-


734
 




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


-


-


(257)
 




- actuarial loss recognised in the Ansul pension scheme


-


-


721
 




- movement on deferred tax relating to the Ansul pension scheme


-


-


(313)
 




Other comprehensive income for the period, net of tax


(418)


836


2,324




Total comprehensive income for the period


6,520


7,154


16,669



 
 
 
 
 
 
 



 
 
 
Consolidated statement of changes in equity
for the six months ended 30 June 2018
 




 


 


 


 


 


 


 


 


 




 


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 2017


123


344


1


2,033


7,031


87,021


-


96,553




Comprehensive income for the period:


 


 


 


 


 


 


 


 




- profit for the period


-


-


-


-


-


6,318


-


6,318




- exchange adjustments


-


-


-


-


836


-


-


836




Total comprehensive income for the period


-


-


-


-


836


6,318


-


7,154




At 30 June 2017


123


344


1


2,033


7,867


93,339


-


103,707




Comprehensive income for the period:


 


 


 


 


 


 


 


 




- profit for the period


-


-


-


-


-


7,992


35


8,027




- exchange adjustments


-


-


-


-


603


-


-


603




- actuarial gain on pension schemes


-


-


-


-


-


1,455


-


1,455




- movement on deferred tax relating to pension schemes


-


-


-


-


-


(570)


-


(570)




Total comprehensive income for the period


-


-


-


-


603


8,877


35


9,515




Contributions by and distributions to owners of the Company:


 


 


 


 


 


 


 


 




- dividends


-


-


-


-


-


(9,808)


-


(9,808)




Contribution from non-controlling interest on business combination


-


-


-


-


-


-


154


154




At 31 December 2017


123


344


1


2,033


8,470


92,408


189


103,568




Comprehensive income for the period:


 


 


 


 


 


 


 


 




- profit for the period


-


-


-


-


-


6,891


47


6,938




- exchange adjustments


-


-


-


-


(418)


-


-


(418)




Total comprehensive income for the period


-


-


-


-


(418)


6,891


47


6,520




At 30 June 2018


123


344


1


2,033


8,052


99,299


236


110,088




 
 
 
Consolidated statement of financial position
as at 30 June 2018
 




 


Unaudited


Unaudited


Audited




 


as at


as at


as at




 


30 June


30 June


31 December




 


2018


2017


2017




 


£'000


£'000


£'000




Assets


 


 


 




Non-current assets


 


 


 




Property, plant and equipment


11,732


11,301


11,589




Intangible assets


61,698


62,625


61,724




Deferred tax asset


589


948


589




Retirement benefit surplus


4,397


3,574


4,397




 


78,416


78,448


78,299




Current assets


 


 


 




Inventories


12,437


12,408


11,749




Trade and other receivables


27,725


23,687


26,063




Cash and cash equivalents


29,256


27,542


24,652




 


69,418


63,637


62,464




Total assets


147,834


142,085


140,763




Liabilities


 


 


 




Current liabilities


 


 


 




Trade and other payables


(21,503)


(20,557)


(19,576)




Income tax liabilities


(917)


(633)


(1,699)




Borrowings


(2,100)


(11,940)


(11,125)




Derivative financial instruments


-


(115)


(54)




Provision for liabilities and charges


-


(35)


-




 


(24,520)


(33,280)


(32,454)




Non-current liabilities


 


 


 




Trade and other payables


(995)


(960)


(1,003)




Borrowings


(8,404)


-


-




Derivative financial instruments


(34)


-


-




Deferred income tax liabilities


(1,886)


(1,633)


(1,830)




Retirement benefit obligations


(1,705)


(2,339)


(1,721)




Provision for liabilities and charges


(202)


(166)


(187)




 


(13,226)


(5,098)


(4,741)




Total liabilities


(37,746)


(38,378)


(37,195)




Net assets


110,088


103,707


103,568




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


8,052


7,867


8,470




 Retained earnings


99,299


93,339


92,408




Equity attributable to owners of the Parent Company


109,852


103,707


103,379




Non-controlling interest


236


-


189




Total equity


110,088


103,707


103,568




 
 
 
Consolidated statement of cash flow
for the six months ended 30 June 2018
 




 


Unaudited


Unaudited


Audited




 


six months


six months


year




 


ended


ended


ended




 


30 June


30 June


31 December




 


2018


2017


2017




 


£'000


£'000


£'000




Cash flows from operating activities


 


 


 




Cash generated from operations


13,156


12,673


25,182




Interest paid


(97)


(187)


(368)




Income tax paid


(4,374)


(4,310)


(7,249)




Net cash generated from operating activities


8,685


8,176


17,565




Cash flows from investing activities


 


 


 




Acquisition of subsidiary undertakings


(1,537)


(785)


(1,220)




Purchases of property, plant and equipment


(1,898)


(1,590)


(3,384)




Proceeds from sale of property, plant and equipment


114


162


349




Purchases of intangible assets


(115)


(659)


(600)




Proceeds from sale of intangible assets


20


-


-




Interest received


8


30


30




Net cash used in investing activities


(3,408)


(2,842)


(4,825)




Cash flows from financing activities


 


 


 




Repayments of borrowings


(557)


(850)


(1,809)




Dividends paid to Company's shareholders


-


-


(9,808)




Contribution from non-controlling interest


-


-


154




Net cash used in financing activities


(557)


(850)


(11,463)




Effects of exchange rates on cash and cash equivalents


(116)


456


773




Net increase in cash in the period


4,604


4,940


2,050




Cash and cash equivalents at the beginning of the period


24,652


22,602


22,602




Cash and cash equivalents at the end of the period


29,256


27,542


24,652




 
 
 
Notes to the financial statements
for the six months ended 30 June 2018
 
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 2018 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 2017. 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 2017 have been extracted from the statutory accounts for the year ended 31 December 2017, 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 £6,891,000 (2017: £6,318,000) and on 12,261,477 (2017: 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




 


2018


2017


2017




 


£'000


£'000


£'000




Profit on ordinary activities after taxation


6,891


6,318


14,310




Basic earnings per ordinary share


56.2p


51.5p


116.7p




 
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 2018. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2018.
 
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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