Final Results

London Security PLC
05 May 2005

LONDON SECURITY PLC ('the Company)

5 May 2005

Preliminary results for the year ended 31 December 2004

London Security presents its results for the year ended 31 December 2004.

Financial highlights of the results for the year ended 31 December 2004:

  • Turnover of £52.3million

  • Operating profit of  £9.5million

  • Earnings before interest, taxation, depreciation and amortisation ('EBITDA') 
    of £14.2 million

  • Profit on ordinary activities before taxation of £9.2million



Chairman's statement

Trading Review

The changes in the results are primarily due to marketing cost increases and
slightly less buoyant market conditions in some European countries.  During 2002
and 2003 the Company benefited from a number of market opportunities which are
now levelling.

Operating profit at 18.1% of turnover and EBITDA at 27.1% of turnover continue
to be industry leading results.  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.

Acquisitions

In December 2004 we acquired MK Fire Limited and TVF (UK) Plc.

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.

These acquisitions will substantially increase turnover in our alarms division,
fulfilling our objective to provide a one-stop shop for customers' fire
protection needs.

Future prospects

The outlook for 2005 is cautiously optimistic.

MK Fire and TVF have immediately contributed to the Group's profits.  We are
continuing to expand the alarm operations in the UK and Belgium.

The Group is actively developing new improved ranges of extinguishers and plans
to launch these products in 2005.  As well as being better extinguishers, we
expect to achieve cost efficiencies from implementation of these new ranges.

Management and Staff

2004 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

Your Board has been examining ways of returning value to Shareholders and it is
pleased to announce that it now proposes, subject to approval of Shareholders
and confirmation of the High Court of the Capital Reduction, to return to
Shareholders by way of a Tender Offer up to £30.1million.  Subject to the
consent of Shareholders, your Board intends that each Shareholder be given the
opportunity to sell to Brewin Dolphin Securities Limited, Ordinary Shares held
by him/her on the Record Date at a price of  £13.75 per Ordinary Share.  A
circular has been posted to Shareholders explaining this proposal in more
detail.

Dividends

In view of the Tender Offer no final dividend is proposed (2003: 10.0p).

On 8 July 2004 the Company announced a special dividend of 42.0p (2003: 0.0p)
per ordinary share.  The Company had accumulated cash comfortably beyond its
short to medium-term operational requirements and the Board of Directors felt it
was in the best interest of Shareholders to distribute a part of this surplus.

An interim dividend of 3.0p (2003: 3.0p) per Ordinary Share was also paid to
Shareholders, giving a total dividend for the year of 45.0p (2003: 13.0p) per
share.


Consolidated Profit and Loss Account
For the year ended 31 December 2004
                                                                   Year ended       Year ended
                                                                  31 December      31 December
                                                                         2004             2003
                                                                        £'000            £'000
Turnover                                                               52,332           53,760
Cost of sales                                                         (7,901)          (8,201)
Gross profit                                                           44,431           45,559
Distribution costs                                                   (20,740)         (20,546)
Administrative expenses                                              (14,220)         (14,086)
Operating profit                                                        9,471           10,927
EBITDA**                                                               14,160           15,510
Depreciation                                                          (1,903)          (1,838)
Amortisation of goodwill                                              (2,786)          (2,745)
Operating profit                                                        9,471           10,927
Income from fixed asset investments                                       114              117
Net interest payable and similar charges                                (418)            (665)
Profit on ordinary activities before taxation                           9,167           10,379
Taxation                                                              (3,777)          (4,587)
Profit on ordinary activities after taxation                            5,390            5,792
Dividends                                                             (6,508)          (1,882)
(Sustained loss)/retained profit                                      (1,118)            3,910

Basic and diluted earnings per ordinary share                           37.3p            40.0p
Adjusted earnings per ordinary share                                    56.5p            59.0p
Dividend per ordinary share                                             45.0p            13.0p

All of the above results arose from continuing operations. Turnover, operating
profit and cash flow attributable to acquisitions have not been separately 
disclosed on the face of the profit and loss account and the cash flow statement 
on the grounds of materiality.

** Earnings Before Interest, Taxation, Depreciation and Amortisation

Consolidated Balance Sheet
As at 31 December 2004
                                                                            2004         2003
                                                                           £'000        £'000
Fixed assets
Intangible assets                                                         49,684       45,082
Tangible assets                                                            8,408        7,791
Investments                                                                   70           70
                                                                          58,162       52,943
Current assets
Stocks                                                                     4,052        3,643
Debtors                                                                   14,929       11,666
Cash at bank and in hand                                                   7,723       13,486
                                                                          26,704       28,795
Creditors: amounts falling due within one year
Finance debt                                                             (5,489)      (4,161)
Other creditors                                                         (16,854)     (15,232)
                                                                        (22,343)     (19,393)
Net current assets                                                         4,361        9,402
Total assets less current liabilities                                     62,523       62,345

Creditors: amounts falling due after more than one year
Finance debt                                                             (9,912)      (8,100)
Provisions for liabilities and charges                                   (1,662)      (1,841)
Net assets                                                                50,949       52,404

Capital and reserves
Called up share capital                                                    1,447        1,447
Share premium                                                             27,476       27,476
Capital redemption reserve                                                   117          117
Merger reserve                                                             2,033        2,033
Profit and loss account                                                   19,876       21,331
Total equity shareholders' funds                                          50,949       52,404



Consolidated Cash Flow Statement
For the year ended 31 December 2004

                                                                    Year ended    Year ended
                                                                   31 December   31 December
                                                                          2004          2003
                                                                         £'000         £'000
Net cash inflow from operating activities                               14,884        14,295
Return on investments and servicing of finance
Interest received                                                          218           231
Interest paid                                                            (505)         (694)
Dividends received                                                         114           117
Net cash outflow from return on investments and                          (173)         (346)
servicing of finance
Taxation
Corporation tax paid                                                   (4,710)       (3,696)
Capital expenditure
Payments to acquire intangible fixed assets                               (54)          (79)
Payments to acquire tangible fixed assets                              (2,208)       (2,239)
Receipts from sales of tangible fixed assets                               644           237
Net cash outflow for capital expenditure                               (1,618)       (2,081)
Acquisitions and disposals
Payments to acquire subsidiary undertakings                            (9,185)         (359)
Payment of deferred consideration on prior year acquisitions                 -         (679)
Net cash/(overdraft) acquired with subsidiary undertakings                 412         (112)
Net cash outflow for acquisitions                                      (8,773)       (1,150)
Equity dividends paid to shareholders                                  (7,955)       (1,159)
Net cash (outflow)/inflow before use of                                (8,345)         5,863
financing
Financing
Purchase of own shares                                                   (120)         (171)
New long-term loans                                                      7,146           600
Repayment of long-term loans                                           (4,444)       (3,109)
Net cash inflow/(outflow) from financing                                 2,582       (2,680)
(Decrease)/increase in cash in the year                                (5,763)         3,183


1          Earnings per Share

The calculation of basic earnings per ordinary share (EPS) is based on the
profit on ordinary activities after taxation of £5,390,000 (2003 : £5,792,000)
and on 14,469,566 (2003 : 14,481,066) 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 14,482,899 (2003 :
14,488,332).  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 14,469,566
(2003 : 14,481,066) ordinary shares in issue prior to 31 December 2004 and on
adjusted earnings which comprise:


                                                                             2004              2003
                                                                       £'000    pence    £'000    pence
Profit on ordinary activities after taxation                           5,390    37.3     5,792    40.0
Eliminate effect:
   Amortisation of goodwill                                            2,786    19.2     2,745    19.0
Adjusted profit on ordinary activities after taxation                  8,176    56.5     8,537    59.0

Adjusted earnings per share figures are given in order that shareholders may
understand the importance 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 2004 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 2003 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 2004 and 31 December 2003 did not contain a statement under s237(2) or
s237(3) of the Companies Act 1985.

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 Security plc
Richard Pollard, Company Secretary                               01422 372852


                      This information is provided by RNS
            The company news service from the London Stock Exchange