Final Results

London Security PLC
03 May 2006

LONDON SECURITY PLC

3 May 2006


Preliminary Results for the year ended 31 December 2005




Financial Highlights



Financial highlights of the results for the year ended 31 December 2005:

•    Turnover of £64.8 million (2004: £52.3million)

•    Earnings before interest, taxation, depreciation and amortisation 
     ('EBITDA') of £14.3 million (2004: £13.9million)

•    Operating profit of  £9.1 million (2004: £9.3million)

•    Profit on ordinary activities before taxation of £8.1 million (2004:
     £8.9million)





Trading Review



The integration of MK Fire Limited and TVF (UK) Plc is progressing well with
both companies reporting increases in profitability.  Both companies are very
well represented in fire extinguisher service, fire alarm service and fire alarm
installation and operate on a nationwide scale whilst having the majority of the
UK business in the more prosperous south of England.



Operating profit at 14.0% of turnover and EBITDA at 22.0% of turnover continue
to be among industry leading results and are expected to increase further as MK
Fire and TVF continue to improve.  We aim to continue to acquire companies in
the fire and security sectors to complement and build upon the organic growth
demonstrated in recent times.



The Group disposed of its investment in Sicli Materiel Incendie s.a., in
December 2005 realising a profit of £1.5million.





Future prospects



The outlook for 2006 is for continued steady progress and this has been
reflected in the first quarter's trading.



We are continuing to expand our alarm operations in the UK and Belgium.



The Group has been developing new improved ranges of extinguishers and
successfully launched these products late in 2005.  As well as being better
extinguishers in terms of fire ratings, ease of operation and discharge times,
we expect to achieve cost efficiencies from implementation of these new ranges.



Management and Staff



2005 was a year in which the staff performed well and, on your behalf, I would
like to express thanks and appreciation for their contribution.



Tender Offer



On 5 May 2005 the Company issued a circular to shareholders setting out details
of the Tender Offer.  The offer was to purchase up to 15% of the ordinary shares
in issue for cancellation, at a price of £13.75 per share.  Valid tenders
pursuant to the Tender Offer were received for 2,155,203 ordinary shares from
229 shareholders.  These shares were purchased by Brewin Dolphin Securities
Limited on 1 July 2005, and subsequently acquired and cancelled by the Company
at the agreed Tender Offer price.



In order to effect the Tender Offer the Board obtained approval from
shareholders and confirmation by the High Court to implement a Capital Reduction
which became effective on 23 June 2005.  As a result of the Capital Reduction
and the ordinary shares being repurchased for cancellation, the issued share
capital of the Company is now 12,323,198 Ordinary Shares of 1p each.





Dividends



A final dividend of 12.0p (2004: Nil) per share is proposed, payable on 21 June
2006 to shareholders on the register on 26 May 2006.  No interim dividend was
paid in 2005 (2004: special dividend of 42.0p and interim dividend of 3.0p).









Consolidated Profit and Loss Account

For the year ended 31 December 2005




                                                                                     Year ended      Year ended
                                                                                    31 December     31 December
                                                                                           2005            2004
                                                                                                     (restated)
                                                                                          £'000           £'000
Turnover                                                                                 64,811          52,332

Cost of sales                                                                          (11,888)         (7,901)
Gross profit                                                                             52,923          44,431

Distribution costs                                                                     (24,640)        (20,740)
Administrative expenses                                                                (19,189)        (14,431)
Operating profit                                                                          9,094           9,260

EBITDA*                                                                                  14,258          13,949
Depreciation                                                                            (2,031)         (1,903)
Amortisation of goodwill                                                                (3,133)         (2,786)
Operating profit                                                                          9,094           9,260

Income from fixed asset investments                                                           -             114
Profit on disposal of fixed asset investments                                             1,474               -
Net interest payable and similar charges                                                (2,062)           (418)
Other finance costs                                                                       (366)            (74)
Profit on ordinary activities before taxation                                             8,140           8,882

Taxation                                                                                (3,663)         (3,676)
Profit attributable to equity shareholders                                                4,477           5,206

Dividends                                                                                     -         (7,956)
Retained profit/(sustained loss)                                                          4,477         (2,750)

Basic and diluted earnings per ordinary share                                             33.4p           36.0p
Dividend per ordinary share                                                                   -           55.0p

*Earnings before Interest, Taxation, Depreciation and Amortisation

All of the above results arose from continuing operations.



Consolidated Balance Sheet

For the year ended 31 December 2005




                                                                                            2005          2004
                                                                                                     (restated)
                                                                                           £'000         £'000
Fixed assets
Intangible assets                                                                         46,230        49,684
Tangible assets                                                                            7,823         8,408
Investments                                                                                    -            70
                                                                                          54,053        58,162
Current assets
Stocks                                                                                     4,897         4,052
Debtors                                                                                   15,676        14,929
Cash at bank and in hand                                                                   8,253         7,723
                                                                                          28,826        26,704
Creditors: amounts falling due within one year
Finance debt                                                                             (5,330)       (5,489)
Other creditors                                                                         (15,247)      (16,854)
                                                                                        (20,577)      (22,343)
Net current assets                                                                         8,249         4,361

Total assets less current liabilities                                                     62,302        62,523
Creditors: amounts falling due after more than one year
Finance debt                                                                            (35,958)       (9,912)
Provisions for liabilities and charges                                                     (399)         (376)

Net assets excluding pension liability                                                    25,945        52,235
Pension liability                                                                        (2,999)       (3,717)
Net assets including pension liability                                                    22,946        48,518

Capital and reserves
Called up share capital                                                                      123         1,447
Share premium                                                                                  -        27,476
Capital redemption reserve                                                                     -           117
Merger reserve                                                                             2,033         2,033
Profit and loss account                                                                   20,790        17,445
Equity shareholders' funds                                                                22,946        48,518










Consolidated Cash Flow Statement

For the year ended 31 December 2005


                                                                                           2005         2004
                                                                                          £'000        £'000
Net cash inflow from operating activities                                                10,193       14,134

Return on investments and servicing of finance

Interest received                                                                           120          218
Interest paid                                                                           (1,326)        (505)
Dividends received                                                                            -          114
Net cash outflow from return on investments and servicing of finance                    (1,206)        (173)

Taxation

Corporation tax paid                                                                    (3,629)      (4,710)
Capital expenditure

Payments to acquire intangible fixed assets                                                (16)         (54)
Payments to acquire tangible fixed assets                                               (1,821)      (2,208)
Receipts from sales of tangible fixed assets                                                292          644
Receipt from sale of investment                                                           1,544            -
Net cash outflow for capital expenditure                                                    (1)      (1,618)

Acquisitions and disposals

Payments to acquire subsidiary undertakings                                                   -      (8,435)
Net cash/(overdraft) acquired with subsidiary undertakings                                    -          412
Payment of deferred consideration on prior year acquisitions                              (516)            -
Net cash outflow for acquisitions                                                         (516)      (8,023)

Equity dividends paid to shareholders                                                         -      (7,955)

Net cash inflow/(outflow) before use of financing                                         4,841      (8,345)

Financing
Purchase of own shares                                                                    (104)        (120)
New long-term loans                                                                      30,000        7,146
Tender offer                                                                           (30,007)            -
Repayment of long-term loans                                                            (4,200)      (4,444)
Net cash (outflow)/inflow from financing                                                (4,311)        2,582

Increase/(decrease) in cash in the year                                                     530      (5,763)









CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES


                                                                                                          2004
                                                                                             2005   (restated)
                                                                                            £'000        £'000
Profit for the financial year                                                               4,477        5,206
Currency translation differences on foreign currency net investments                        (264)        (217)
Actuarial gain/(loss) recognised in the pension scheme                                        469      (1,830)
Movement on deferred tax relating to pension asset                                          (143)          549
Total recognised gains for the year                                                         4,539        3,708
Prior year adjustment (note 22)                                                           (2,431)
Total losses recognised since last annual report                                            2,108












1       Earnings per Share



The calculation of basic earnings per Ordinary Share ('EPS') is based on the
profit on ordinary activities after taxation of £4,477,000 (2004: £5,206,000 )
and on 13,389,966 (2004: 14,469,566) 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 revised weighted average number of shares is 13,404,033 (2004:
14,482,899). 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 13,389,966
(2004: 14,469,566) Ordinary Shares being the weighted average number of Ordinary
Shares in issue in the year and on adjusted earnings which are calculated as
follows:


                                                                                2005                2004
                                                                                                 (restated)
                                                                           £'000     pence     £'000     pence
Profit on ordinary activities after taxation                               4,477      33.4     5,206      36.0
Eliminate effect of:
Amortisation of goodwill                                                   3,133      23.4     2,786      19.2
Adjusted profit on ordinary activities after taxation                      7,610      56.8     7,992      55.2



Adjusted earnings per share 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 statutory accounts
within the meaning of Section 240 of the Companies Act 1985.



The results for the year ended 31 December 2005 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 2004 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 2005 and 31 December 2004 did not contain a statement under s237(2) or
s237(3) of the Companies Act 1985.



The preceding statement have 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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