Final Results

London Securities PLC 3 May 2001 London Securities PLC Preliminary results for the year ended 31 December 2000 INTRODUCTION As I explained in the Chairman's Statement included with the 1999 Annual Report, the Company acquired Ansul s.a. on 29 December 1999 and disposed of all its property subsidiaries at the same date. With effect from 29 December 1999, the Group's primary business is the manufacture, sale and service of portable fire equipment in the UK, Belgium, Holland, Austria and Switzerland. Consequently, the comparative figures included in the profit and loss account are not relevant to our present activities as they relate to the group's former activities as a property investment group. RESULTS AND TRADING An audited profit and loss account for 2000 and an unaudited proforma profit and loss account for 1999 setting out financial information for our new business are included in the financial statements and a summary thereof is detailed below: Audited Unaudited proforma 12 months to 12 months to 31 December 31 December 2000 1999 £'000 £'000 EBITDA 9,545 8,446 Depreciation (1,573) (1,549) Amortisation of goodwill (2,640) (2,640) ---- ---- Operating profit 5,332 4,257 Despite the weakness of the Euro throughout the year (60 per cent. of profits arise from the activities in Euro denominated countries), profits have improved significantly from 1999. If the Euro had remained at the levels of 1999, operating profit would have been higher by approximately £300,000. The Group's Nu-Swift UK operations have shown improved profits benefiting from investment in prior years in rental activities. Improved non-extinguisher sales also contributed significantly as have the export activities. In Belgium, both turnover and profit were improved primarily due to improved service engineers performance and improvements in factory volumes and productivity. The Ansul operation in Holland improved operating profits on the back of strong extinguisher sales from both service engineers and representatives. Nu-Swift's Dutch operation produced a solid performance despite increased cost of sales due to the import of the majority of product from the UK. Profits in Austria and Switzerland were marginally improved from 1999 despite both companies being in a transitional period following the departure of the Managing Director and completion of a relocation. Basic earnings per ordinary share are 22.3p and adjusted earnings per share in which amortisation of goodwill and an exceptional tax credit in respect of prior years are added back are 29.2p for the year. FUTURE PROSPECTS The outlook for 2001 is optimistic with management accounts showing marked improvements in both turnover and profit. The annual budgeting process yielded significant new initiatives to improve profitability, the majority of which were implemented in advance of 1 January 2001. MANAGEMENT AND STAFF 2000 was a year in which the staff excelled and, on your behalf, I would like to express thanks and appreciation for their contribution. DIVIDEND A final dividend of 3p (1999: 2p) per ordinary share is proposed, payable on 11 July 2001 to shareholders on the register on 8 June 2001. J.G. MURRAY Chairman 1. CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 December 2000 Notes Year ended Year ended 31 December 31 December 2000 1999 £000 £000 Turnover 37,729 - Gross rents receivable - 2,006 Cost of sales (5,518) - Direct property outgoings - (107) Gross profit/net rents receivable 32,211 1,899 Distribution costs (15,782) - Administrative expenses (11,097) (113) Operating profit 5,332 1,786 EBITDA** 9,545 1,786 Depreciation (1,573) - Amortisation of goodwill (2,640) - Operating profit 5,332 1,786 Income from fixed asset investments 96 - Profit on sale of property investment - 1,878 companies Net interest payable (1,508) (683) Exchange (loss)/gain on foreign (56) 25 currency Profit on ordinary activities before 3,864 3,006 taxation Taxation (608) (376) Profit on ordinary activities after 3,256 2,630 taxation Dividends (435) (102) Retained profit 2,821 2,528 Basic earnings per ordinary share 1 22.3p 50.7p Adjusted earnings per ordinary share 1 29.2p 14.2p Dividend per ordinary share 3.0p 2.0p All of the above results for 2000 arose from continuing operations. All of the above results for 1999, excluding the exchange gain on foreign currency, arose from discontinued operations. There is no potential dilution of the Company's shares. **Earnings Before Interest, Taxation, Depreciation and Amortisation 2. UNAUDITED PROFORMA STATEMENT OF OPERATING PROFIT for the year ended 31 December 2000 Year Unaudited Proforma year ended ended 31 December 2000 31 December 1999 £000 £000 Turnover 37,729 36,902 Cost of sales (5,518) (5,882) Gross profit 32,211 31,020 Distribution costs (15,782) (15,223) Administrative expenses (11,097) (11,540) Operating profit 5,332 4,257 EBITDA ** 9,545 8,446 Depreciation (1,573) (1,549) Amortisation of goodwill (2,640) (2,640) Operating profit 5,332 4,257 The table above shows, for the purposes of illustration only, the 2000 results compared to the 1999 results of the Ansul and Nu-Swift Groups, presented as follows: The combined operating profits of the Ansul and Nu-Swift Groups adjusted for the items mentioned below and also after charging goodwill amortisation at a similar level to that charged in 2000. The 1999 figures shown above have been extracted (and, where appropriate, translated at the relevant exchange rates) from the audited financial statements of the Ansul Group and the Nu-Swift Group. The Group has borne certain office and other costs, including the costs of certain executives of the Fire Group, including Jacques Gaston Murray, Jean-Jacques Murray, Jean-Christophe Pillois and Emmanuel Sebag (all of whom are directors of London Securities Plc). Under the Services Agreement dated 10 December 1999, these costs are restricted to a maximum of £900,000 for the year ending 31 December 2000. The actual office and other costs borne by Ansul and Nu-Swift have also been restricted in the 1999 figures to this level. **Earnings Before Interest, Taxation, Depreciation and Amortisation 3. CONSOLIDATED BALANCE SHEET as at 31 December 2000 2000 1999 £000 £000 Fixed assets Intangible assets 50,101 52,568 Tangible assets 5,838 5,843 Investments 70 70 56,009 58,481 Current assets Stocks 2,620 2,421 Debtors 9,672 7,622 Cash at bank and in hand 3,310 3,633 15,602 13,676 Creditors : amounts falling due within one year Finance debt (3,126) (3,169) Other creditors (10,218) (10,781) (13,344) (13,950) Net current assets/(liabilities) 2,258 (274) Total assets less current liabilities 58,267 58,207 Creditors : amounts falling due after more than one year Finance debt (16,225) (19,007) Other creditors (146) (40) (16,371) (19,047) Provisions for liabilities and charges (1,421) (1,481) Net assets 40,475 37,679 Capital and reserves Called up share capital 1,455 1,459 Share premium 27,476 27,476 Capital redemption reserve 109 105 Merger reserve 2,033 2,033 Profit and loss account 9,402 6,606 Total equity shareholders' funds 40,475 37,679 4. CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2000 Year ended Year ended 31 December 31 December 2000 1999 £000 £000 Net cash inflow from operating activities 7,900 1,291 Return on investments and servicing of finance Interest received 114 115 Interest paid (1,486) (798) Dividends received 96 - Net cash outflow from return on investments (1,276) (683) and servicing of finance Taxation Corporation tax paid (1,845) (405) Capital expenditure Payments to acquire tangible fixed assets (1,776) - Receipts from sales of tangible fixed assets 258 - Net cash outflow for capital expenditure (1,518) - Acquisitions and disposals Payments to acquire subsidiary undertakings (307) (23,910) Net cash acquired with the purchase of - 3,391 subsidiary undertakings Receipts from sale of subsidiary - 11,013 undertakings Net cash transferred with the sale of - (112) subsidiary undertakings Net cash outflow for acquisitions and (307) (9,618) disposals Equity dividends paid to shareholders (102) (102) Net cash inflow/(outflow) before use of 2,852 (9,517) liquid resources and financing Management of liquid resources Decrease in short term deposits with banks - 1,759 Financing Purchase of own shares (214) (21) New long term loans 184 11,000 Repayment of long term loans (3,145) - Net cash (outflow)/inflow from financing (3,175) 10,979 (Decrease)/increase in cash and equivalents (323) 3,221 NOTES 1. EARNINGS PER SHARE The calculation of basic earnings per ordinary share is based on the profit on ordinary activities after taxation of £3,256,000 (1999: £2,630,000) and on 14,579,007 (1999: 5,186,285) ordinary shares, being the weighted average number of ordinary shares in issue during the period. The calculation of adjusted earnings per ordinary share is based on a weighted average of 14,579,007 (1999: 5,186,285) ordinary shares in issue prior to 31 December 2000 and on adjusted earnings which comprise: 2000 1999 £000 £000 Basic profit/earnings per 3,256 22.3p 2,630 50.7p share Eliminate effect of: Profit on disposal of property - - (1,878) (36.2)p investment companies Exceptional tax credit in (1,633) (11.2)p - - respect of prior years Exchange gain on foreign - - (25) (0.3)p currency loan Amortisation of goodwill 2,640 18.1p - - Adjusted profit/earnings per 4,263 29.2p 727 14.2p share Adjusted earnings per share figures and the reconciliation above are given in order that shareholders may appreciate the effect on earnings of the exceptional items and goodwill amortisation. 2. The results for the year ended 31 December 2000 have been abridged from the full accounts of the Group for that year which received an unqualified auditors' report and which have not yet been delivered to the Registrar of Companies. The results for the year ended 31 December 1999 have been extracted from the Group's statutory accounts which received an unqualified auditors' report and have been filed with the Registrar of Companies. 3. The preceding statements have been prepared in accordance with applicable accounting standards on a basis which is consistent with that applied in previous periods. Enquiries London Securities Richard Pollard, Secretary 01422 372 852 END

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