Half Yearly Report

RNS Number : 7494Y

London Security PLC

11 September 2015

 

11 September 2015

LONDON SECURITY PLC

INTERIM RESULTS

Chairman's statement

Financial highlights

Revenue

£50.2m

2014: £51.3m

Operating profit

£7.9m

2014: £9.4m

TRADING

The financial highlights illustrate that the Group's revenue decreased by £1.1 million (2.1%) to £50.2 million. However these results are impacted by the movement in the Euro to Sterling average exchange rate which has increased from 1.22 to 1.36. This movement in exchange rates had an adverse effect of £4.3 million on reported turnover. If the 2015 results had been translated at 2014 rates, revenue would have been £54.5 million instead of £50.2 million, an increase of 6.2%. This real growth has come from acquisitions made in the second half of 2014 and first half of 2015, principally Pyrotec and Manus, which recorded turnover of £4.2 million.

Operating profit decreased by £1.5 million (16.0%) to £7.9 million. Adjusting for the change in exchange rates on the same basis as above, operating profit would have been £8.7 million instead of £7.9 million (an adjusted decrease of 7.4%). This is covered by increased competition and downward pressure on prices being experienced in our market.

ACQUISITIONS

In the six months to the end of June the Group has acquired a total of six well established businesses at a cost of £1.4 million (2014: five businesses at a cost of £0.6 million). The integration of these businesses into the Group has, so far, been successful and results are in line with expectations. 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.

PROSPECTS

Economic growth in the Group's market has been depressed but our business remains strong, cash generative and well developed, with positive net funds. There are signs of a slow recovery and, as a leading provider in this market with a well-diversified customer base, the Board is optimistic for further success in 2015 as growth improves.

DIVIDENDS

A final dividend in respect of 2014 of £0.31 per ordinary share was paid to shareholders on 8 July 2015.

J.G. Murray

Chairman

11 September 2015

Consolidated income statement

for the six months ended 30 June 2015

		Unaudited	Unaudited	Audited
		six months	six months	year
		ended	ended	ended
		30 June	30 June	31 December
		2015	2014	2014
	Note	£'000	£'000	£'000
Revenue		50,191	51,279	100,876
Cost of sales		(10,105)	(9,840)	(18,638)
Gross profit		40,086	41,439	82,238
Distribution costs		(19,297)	(19,585)	(38,106)
Administrative expenses		(12,872)	(12,430)	(24,451)
Operating profit		7,917	9,424	19,681
EBITDA*		10,341	11,544	23,938
Depreciation and amortisation		(2,424)	(2,120)	(4,257)
Operating profit		7,917	9,424	19,681
Finance income		84	93	188
Finance costs		(208)	(435)	(832)
Finance costs - net		(124)	(342)	(644)
Profit before income tax		7,793	9,082	19,037
Income tax expense		(2,561)	(2,907)	(6,362)
Profit for the period attributable to equity shareholders of the Company		5,232	6,175	12,675
Earnings per share
Basic and diluted	3	42.7p	50.4p	103.4p
Dividends
Dividends paid per share		Nil	Nil	62p

* 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 2015

	Unaudited	Unaudited	Audited
	six months	six months	year
	ended	ended	ended
	30 June	30 June	31 December
	2015	2014	2014
	£'000	£'000	£'000
Profit for the financial period	5,232	6,175	12,675
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	(2,194)	(1,108)	(1,955)
- actuarial gain recognised in the Nu-Swift pension scheme	-	-	127
- movement on deferred tax relating to the Nu-Swift pension scheme surplus	-	-	(518)
- actuarial loss recognised in the Ansul pension scheme	-	-	(191)
- movement on deferred tax relating to the Ansul pension scheme	-	-	69
Other comprehensive expense for the period, net of tax	(2,194)	(1,108)	(2,468)
Total comprehensive income for the period	3,038	5,067	10,207

Consolidated statement of changes in equity

for the six months ended 30 June 2015

						Profit
	Share	Share	Capital	Merger	Other	and loss
	capital	premium	redemption	reserve	reserve	account	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 January 2014	123	344	1	2,033	5,713	74,597	82,811
Comprehensive income for the period
- profit for the period	-	-	-	-	-	6,175	6,175
- exchange adjustments	-	-	-	-	(1,108)	-	(1,108)
Total comprehensive income for the period	-	-	-	-	(1,108)	6,175	5,067
At 30 June 2014	123	344	1	2,033	4,605	80,772	87,878
Comprehensive income for the period
- profit for the period	-	-	-	-	-	6,500	6,500
- exchange adjustments	-	-	-	-	(847)	-	(847)
- actuarial loss on pension schemes	-	-	-	-	-	(64)	(64)
- movement on deferred tax relating to pension schemes	-	-	-	-	-	(449)	(449)
Total comprehensive income for the period	-	-	-	-	(847)	5,987	5,140
Contributions by and distributions to owners of the Company:
- dividends	-	-	-	-	-	(7,602)	(7,602)
Total contributions by and distributions to owners of the Company	-	-	-	-		(7,602)	(7,602)
At 31 December 2014	123	344	1	2,033	3,758	79,157	85,416
Comprehensive income for the period
- profit for the period	-	-	-	-	-	5,232	5,232
- exchange adjustments	-	-	-	-	(2,194)	-	(2,194)
Total comprehensive income for the period	-	-	-	-	(2,194)	5,232	3,038
At 30 June 2015	123	344	1	2,033	1,564	84,389	88,454

Consolidated statement of financial position

for the six months ended 30 June 2015

	Unaudited	Unaudited	Audited
	as at	as at	as at
	30 June	30 June	31 December
	2015	2014	2014
	£'000	£'000	£'000
Assets
Non-current assets
Property, plant and equipment	9,335	9,751	9,747
Intangible assets	60,603	57,468	61,400
Deferred tax asset	699	604	753
Retirement benefit surplus	3,283	2,469	3,283
	73,920	70,292	75,183
Current assets
Inventories	8,885	9,221	9,494
Trade and other receivables	19,953	20,117	19,573
Cash and cash equivalents	22,696	26,203	20,978
	51,534	55,541	50,045
Total assets	125,454	125,833	125,228
Liabilities
Current liabilities
Trade and other payables	(18,279)	(17,617)	(18,232)
Income tax liabilities	(636)	(383)	(1,389)
Borrowings	(1,659)	(1,823)	(1,782)
Provision for liabilities and charges	-	(4)	-
	(20,574)	(19,827)	(21,403)
Non-current liabilities
Trade and other payables	(703)	(535)	(739)
Borrowings	(11,965)	(14,890)	(13,678)
Derivative financial instruments	(163)	(86)	(227)
Deferred income tax liabilities	(1,667)	(987)	(1,701)
Retirement benefit obligations	(1,687)	(1,630)	(1,843)
Provision for liabilities and charges	(241)	-	(221)
	(16,426)	(18,128)	(18,409)
Total liabilities	(37,000)	(37,955)	(39,812)
Net assets	88,454	87,878	85,416
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	1,564	4,605	3,758
Retained earnings	84,389	80,772	79,157
Total shareholders' equity	88,454	87,878	85,416

Consolidated statement of cash flow

for the six months ended 30 June 2015

	Unaudited	Unaudited	Audited
	six months	six months	year
	ended	ended	ended
	30 June	30 June	31 December
	2015	2014	2014
	£'000	£'000	£'000
Cash flows from operating activities
Cash generated from operations	9,865	11,764	24,338
Interest paid	(208)	(239)	(472)
Income tax paid	(3,560)	(2,676)	(5,218)
Net cash generated from operating activities	6,097	8,849	18,648
Cash flows from investing activities
Acquisition of subsidiary undertakings	(902)	-	(2,164)
Purchases of property, plant and equipment	(1,125)	(1,126)	(2,304)
Proceeds from sale of property, plant and equipment	91	133	242
Purchases of intangible assets	(373)	(667)	(3,519)
Proceeds from sale of intangible assets	-	39	-
Interest received	20	48	68
Net cash used in investing activities	(2,289)	(1,573)	(7,677)
Cash flows from financing activities
Repayments of borrowings	(844)	(914)	(1,855)
Dividends paid to Company's shareholders	-	-	(7,602)
Net cash used in financing activities	(844)	(914)	(9,457)
Effects of exchange rates on cash and cash equivalents	(1,246)	(724)	(1,101)
Net increase in cash in the period	1,718	5,638	413
Cash and cash equivalents at beginning of the period	20,978	20,565	20,565
Cash and cash equivalents at end of the period	22,696	26,203	20,978

Notes to the financial statements

for the six months ended 30 June 2015

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 2015 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 2014. 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 2014 have been extracted from the statutory accounts for the year ended 31 December 2014 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, 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 £5,232,000 (2014: £6,175,000) and on 12,261,477 (2014: 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
	2015	2014	2014
	£'000	£'000	£'000
Profit on ordinary activities after taxation	5,232	6,175	12,675
Basic earnings per ordinary share	42.7p	50.4p	103.4p

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 2015. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2015.

For further information, please contact:

London Security plc

Richard Pollard

Company Secretary                                                                            Tel : [phone]

WH Ireland Limited

Andrew Kitchingman                                                                          Tel : [phone]

Liam Gribben

 

END

 

 

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