Final Results

London Security PLC
27 April 2007



LONDON SECURITY PLC


27 APRIL 2007



PRELIMINARY ANNOUNCEMENT



FINANCIAL HIGHLIGHTS

Financial highlights of the audited results for the year ended 31 December 2006
compared with the year ended 31 December 2005 are as follows:


•  Turnover of £64.4 million (2005: £64.8 million)

•  Earnings before interest, taxation, depreciation and amortisation 
   ('EBITDA') of £14.7 million (2005: £14.3 million)

•  Operating profit before amortisation of goodwill of £12.7million
   (2005: £12.2million).

•  Operating profit of £9.6 million (2005: £9.1 million)

•  Profit on ordinary activities before taxation of £8.3 million (2005:
   £8.1 million)





TRADING REVIEW



The Group's operating profit has increased by £529,000 (6%), despite one-off
charges relating to reorganisation consisting of onerous lease provisions of
£350,000 (2005: £Nil) and redundancy costs of £379,000 (2005: £39,000).



In mainland Europe the Group has gone from strength to strength, building upon
its strong position in servicing fire extinguishers and hose reels and growing
our new activities of alarms, emergency lights and modular first-aid boxes.



In the UK, the profit increase is largely due to reorganisation initiatives and
improved credit control.  In addition, our alarm installation division has
improved by becoming more focussed on existing customers, systems modifications
and extensions.



The Group has developed new ranges of fire extinguishers and successfully
launched these products late in 2005 and 2006.  These extinguishers show
improvements in terms of fire ratings, ease of operating and discharge times,
and also enabled us to achieve cost efficiencies from implementation of these
new ranges.



Group operating profit at 15% of turnover and EBITDA at 23% of turnover continue
to be among industry leading results and are expected to increase further as the
full year effects of the various  initiatives implemented in 2006 are realised.







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.



In December 2006 we acquired SAS, a Belgian fire alarm company.  We will use
this acquisition to develop the alarm market in Belgium and other continental
countries where we have a fire activity.



In 2007, we have acquired contracts to service fire equipment from Alba Fire in
Nairn, Scotland.







MANAGEMENT AND STAFF



2006 was a year in which the staff performed well and, on your behalf, I would
like to express thanks and appreciation for their contribution.





SHARE BUY-BACK PROGRAMME



The Board continues to believe that shareholder value will be enhanced by the
purchase, when appropriate, of our own shares.  The earnings per share this year
and in 2005 has benefited from the Tender Offer exercise that was completed in
July 2005 when the company purchased 2.2 million shares for cancellation.



Consequently, at the forthcoming AGM, the Board will request that shareholders
vote in favour of a resolution to renew the authority to purchase up to 500,000
ordinary shares.





DIVIDENDS



The Board is not recommending the payment of a final dividend this year.  Future
dividend policy will be reviewed regularly by the Board.





FUTURE PROSPECTS



The outlook for 2007 is for continued progress and this has been reflected in a
significantly improved first quarter's trading.











Consolidated Profit and Loss Account
For the year ended 31 December 2006




                                                                                             2006             2005
                                                                                            £'000            £'000
Turnover                                                                                   64,426           64,811

Cost of sales                                                                            (11,719)         (11,888)
Gross profit                                                                               52,707           52,923

Distribution costs                                                                       (24,490)         (24,640)
Administrative expenses                                                                  (18,594)         (19,189)
Operating profit                                                                            9,623            9,094

EBITDA*                                                                                    14,723           14,258
Depreciation                                                                              (1,987)          (2,031)
Operating profit before amortisation of goodwill                                           12,736           12,227
Amortisation of goodwill                                                                  (3,113)          (3,133)
Operating profit                                                                            9,623            9,094

Profit on disposal of fixed asset investments                                                   -            1,474
Net interest payable and similar charges                                                  (1,263)          (2,062)
Other finance costs                                                                          (70)            (366)
Profit on ordinary activities before taxation                                               8,290            8,140

Taxation                                                                                  (3,647)          (3,663)
Profit attributable to equity shareholders                                                  4,643            4,477

Dividends                                                                                 (1,476)                -
Profit transferred to reserves                                                              3,167            4,477


Basic and diluted earnings per ordinary share                                  1            37.7p            33.4p

Dividend paid per ordinary share                                                            12.0p                -

*Earnings before Interest, Taxation, Depreciation and Amortisation

All of the above results arose from continuing operations.







Consolidated Balance Sheet
As at 31 December 2006


                                                                                                 2006         2005
                                                                                                £'000        £'000
Fixed assets

Intangible assets                                                                              43,260       46,230
Tangible assets                                                                                 7,103        7,823
                                                                                               50,363       54,053
Current assets

Stocks                                                                                          4,593        4,897
Debtors                                                                                        15,148       15,676
Cash at bank and in hand                                                                        8,676        8,253
                                                                                               28,417       28,826
Creditors: amounts falling due within one year
Finance debt                                                                                  (5,051)      (5,330)
Other creditors                                                                              (13,962)     (15,247)
                                                                                             (19,013)     (20,577)
Net current assets                                                                              9,404        8,249

Total assets less current liabilities                                                          59,767       62,302
Creditors: amounts falling due after more than one year
Finance debt                                                                                 (30,395)     (35,958)
Other creditors                                                                                  (54)            -
Provisions for liabilities and charges                                                          (553)        (399)

Net assets excluding pension liability                                                         28,765       25,945
Pension liability                                                                             (2,875)      (2,999)
Net assets including pension liability                                                         25,890       22,946


Capital and reserves

Called up share capital                                                                           123          123
Merger reserve                                                                                  2,033        2,033
Profit and loss account                                                                        23,734       20,790
Equity shareholders' funds                                                                     25,890       22,946








Consolidated Cash Flow Statement
For the year ended 31 December 2006


                                                                                                  2006         2005
                                                                                                 £'000        £'000
Net cash inflow from operating activities                                                       14,380       10,193

Return on investments and servicing of finance
Interest received                                                                                  147          120
Interest paid                                                                                  (1,866)      (1,326)
Net cash outflow from return on investments and servicing of finance                           (1,719)      (1,206)

Taxation
Corporation tax paid                                                                           (3,307)      (3,629)
Capital expenditure

Payments to acquire intangible fixed assets                                                          -         (16)
Payments to acquire tangible fixed assets                                                      (1,868)      (1,821)
Receipts from sales of tangible fixed assets                                                       650          292
Receipt from sale of investment                                                                      -        1,544
Net cash outflow for capital expenditure                                                       (1,218)          (1)

Acquisitions and disposals
Payments to acquire subsidiary undertakings                                                      (248)            -
Payment of deferred consideration on prior year acquisitions                                         -        (516)
Net cash outflow for acquisitions                                                                (248)        (516)

Equity dividends paid to shareholders                                                          (1,476)            -
Net cash inflow before use of financing                                                          6,412        4,841
Financing

Purchase of own shares                                                                               -        (104)
New long-term loans                                                                                  -       30,000
Tender Offer                                                                                         -     (30,007)
Repayment of long-term loans                                                                   (5,858)      (4,078)
Capital repayment of finance leases                                                              (131)        (122)
Net cash outflow from financing                                                                (5,989)      (4,311)

Increase in cash in the year                                                                       423          530







Consolidated Statement of Total Recognised Gains and Losses


                                                                                                 2006         2005
                                                                                                £'000        £'000
Profit for the financial year                                                                   4,643        4,477
Currency translation differences on foreign currency net investments                            (259)        (264)
Actuarial gain recognised in the pension scheme                                                    52          469
Movement on deferred tax relating to pension scheme                                              (16)        (143)
Total recognised gains for the year                                                             4,420        4,539






1 Earnings per Share

The calculation of basic earnings per ordinary share ('EPS') is based on the
profit on ordinary activities after taxation of £4,643,000 (2005: £4,477,000)
and on 12,303,198 (2005: 13,389,966) ordinary shares, being the weighted average
number of ordinary shares in issue during the year.

For diluted earnings per ordinary share, the weighted average number of shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. The only potential ordinary shares in the Group are in respect of the
unapproved share option scheme (see note 21). The revised weighted average
number of shares is 12,304,394  (2005: 13,404,033). After taking into account
the effect of dilutive securities, the basic EPS and adjusted EPS figures are
unaltered.

The calculation of adjusted earnings per ordinary share is based on 12,303,198
(2005: 13,389,966) ordinary shares being the weighted average number of ordinary
shares in issue in the year and on adjusted earnings which are calculated as
follows:

                                                                            2006                        2005
                                                                     £'000        pence           £'000      pence
Profit on ordinary activities after taxation                         4,643         37.7           4,477       33.4
Eliminate effect of:
Amortisation of goodwill                                             3,113         25.3           3,133       23.4
Adjusted profit on ordinary activities after taxation                7,756         63.0           7,610       56.8


The adjusted EPS figures are given in order that shareholders may understand the
effect of goodwill amortisation on the results for the year.





2        This preliminary announcement does not constitute the Company's
statutory accounts within the meaning of Section 240 of the Companies Act 1985.



The results for the year ended 31 December 2006 have been extracted 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 2005 have been extracted from the Group's
statutory accounts which received an unqualified auditors' report and have been
filed with the Registrar of Companies.  The accounts for the year ended 31
December 2006 and 31 December 2005 did not contain a statement under s237(2) or
s237(3) of the Companies Act 1985.



This preliminary announcement has been prepared in accordance with applicable
accounting standards on a basis which is consistent with that applied in
previous periods.





Enquiries:     London Security plc
               Richard Pollard
               Company Secretary                    Tel:       [phone]




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