Interim results for six months ended 30 June 2024

London Security PLC
13 September 2024
 

 

London Security PLC

 

(the "Group" or "Company")

 

Interim results for the six months ended 30 June 2024

 

 

Chairman's statement

J-J. Murray, Chairman

 

Financial highlights

 

•     Revenue £110.9m (2023: £108.8m)

•     Operating profit £13.4m (2023: £13.7m)

•     Earnings per share 78.4p (2023: 81.0p)

 

Trading

 

The financial highlights illustrate that the Group's revenue increased by £2.1 million (1.9%) to £110.9 million.

Operating profit decreased by £0.3 million (2.2%) to £13.4 million.

These results include the adverse movement in the Euro to Sterling average exchange rate, which has increased from 1.15 to 1.17. If the 2024 results from the European subsidiaries had been translated at 2023 rates, revenue would have been £113.2 million instead of £110.9 million, which would represent an increase of 4.0% on the prior year. On the same basis, operating profit would have been £13.7 million instead of £13.4 million, stable compared to 2023.

The first six months of 2024 were a period of consolidation for the Group following the 26% increase in operating profit that was enjoyed in 2023. Whilst operating profit is broadly stable versus 2023, this still represents a 23% increase on 2022.

The core servicing business remains very consistent with a slight fall in special projects, the instance of which is unpredictable.

Although inflation has moderated since last year, we continue to experience upward input price pressures. These supply price increases have been passed on to our customers where possible. Interest rates which were increased to combat inflation remain high and are depressing growth and reducing our customers' appetite to invest. All the countries in which we operate are experiencing low or no growth.

 

Acquisitions

 

In the six months to the end of June 2024, the Group strengthened its presence in Belgium, the Netherlands, Germany, Austria, Luxembourg and France through the acquisition of service contracts to be integrated into the Group's existing subsidiaries. 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.

 

Cash and financing

 

The Group's cash balance as at 30 June 2024 was £39.5 million. This is an increase of £6.8 million on the 31 December 2023 balance of £32.7 million.

 

Prospects

 

Cash management is a key consideration in difficult economic times. The London Security Group has a healthy balance sheet, strong cash reserves and a track record for good cash generation. The Board therefore considers that with its strong balance sheet and material net cash position the Group is well placed to cope with a period of low growth.

 

Dividends

 

A final dividend in respect of 2023 of £0.42 per ordinary share was paid to shareholders on 12 July 2024.

 

J-J. Murray

Chairman

13 September 2024

 



 

Consolidated income statement

for the six months ended 30 June 2024

 




Unaudited

Unaudited

Audited




six months

six months

year




ended

ended

ended




30 June

30 June

31 December




2024

2023

2023


 

Note

£'000

£'000

£'000


Revenue


110,864

108,845

219,705


Cost of sales

 

(30,088)

(29,452)

(58,988)


Gross profit


80,776

79,393

160,717


Distribution costs


(41,835)

(41,304)

(81,373)


Administrative expenses

 

(25,589)

(24,357)

(47,762)

 

Operating profit

 

13,352

13,732

31,582


Finance income


213

5

226


Finance costs

 

(162)

(110)

(264)


Finance income/(cost) - net

 

51

(105)

(38)


Profit before income tax


13,403

13,627

31,544


Income tax expense

 

(3,813)

(3,692)

(8,280)


Profit for the period

 

9,590

9,935

23,264


Earnings per share






Basic and diluted

3

78.4p

81.0p

189.8p


Dividends






Dividends paid per share

 

Nil

Nil

124p

 

 

The above are all as a result of continuing operations.



 

Consolidated statement of comprehensive income

for the six months ended 30 June 2024

 


Unaudited

Unaudited

Audited


six months

six months

year


ended

ended

ended


30 June

30 June

31 December


2024

2023

2023

 

£'000

£'000

£'000

Profit for the financial period

9,590

9,935

23,264

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

(2,096)

(2,851)

(1,579)

- actuarial gain recognised in the Nu-Swift pension scheme

-

-

52

- movement on deferred tax relating to the Nu-Swift pension scheme

-

-

(18)

- actuarial loss recognised in the Ansul pension scheme

-

-

(171)

- movement on deferred tax relating to the Ansul pension scheme

-

-

43

Other comprehensive expense for the period, net of tax

(2,096)

(2,851)

(1,673)

Total comprehensive income for the period

7,494

7,084

21,591

 



 

Consolidated statement of changes in equity

for the six months ended 30 June 2024

 


Share

Share

Capital

Merger

Other

Retained



capital

premium

redemption

reserve

reserve

earnings

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2023

123

344

1

2,033

8,658

134,722

145,881

Comprehensive income for the period:








- profit for the period

-

-

-

-

-

9,935

9,935

- exchange adjustments

-

-

-

-

(2,851)

-

(2,851)

Total comprehensive (expense)/income for the period

-

-

-

-

(2,851)

9,935

7,084

Purchase of own shares

-

-

-

-

-

(30)

(30)

At 30 June 2023

123

344

1

2,033

5,807

144,627

152,935

Comprehensive income for the period:








- profit for the period

-

-

-

-

-

13,329

13,329

- exchange adjustments

-

-

-

-

1,272

-

1,272

- actuarial gain on pension schemes

-

-

-

-

-

(119)

(119)

- movement on deferred tax relating to pension schemes

-

-

-

-

-

25

25

Total comprehensive income for the period

-

-

-

-

1,272

13,235

14,507

Contributions by and distributions to owners of the Company:








- dividends

 

-

-

-

-

(15,196)

(15,196)

Purchase of own shares

-

-

-

-

-

(3)

(3)

At 31 December 2023

123

344

1

2,033

7,079

142,663

152,243

Comprehensive income for the period:








- profit for the period

-

-

-

-

-

9,590

9,590

- exchange adjustments

-

-

-

-

(2,096)

-

(2,096)

Total comprehensive (expense)/income for the period

-

-

-

-

(2,096)

9,590

7,494

At 30 June 2024

123

344

1

2,033

4,983

152,253

159,737

 



 

Consolidated statement of financial position

as at 30 June 2024

 


Unaudited

Unaudited

Audited


as at

as at

as at


30 June

30 June

31 December


2024

2023

2023

 

£'000

£'000

£'000

Assets




Non-current assets




Property, plant and equipment

18,216

16,430

17,749

Right-of-use assets

7,100

5,531

6,549

Intangible assets

76,719

77,848

77,382

Deferred tax asset

740

654

749

Retirement benefit surplus

342

276

342

 

103,117

100,739

102,771

Current assets




Inventories

21,401

22,934

22,143

Trade and other receivables

47,321

43,907

44,488

Cash and cash equivalents

39,452

33,206

32,737

 

108,174

100,047

99,368

Total assets

211,291

200,786

202,139

Liabilities




Current liabilities




Trade and other payables

(38,326)

(35,902)

(36,403)

Income tax liabilities

(1,406)

(1,448)

(2,275)

Borrowings

(264)

(344)

(381)

Lease liabilities

(2,347)

(1,228)

(2,274)

Provision for liabilities and charges

(6)

(9)

(6)

 

(42,349)

(38,931)

(41,339)

Non-current liabilities




Trade and other payables

(1,291)

(1,016)

(1,090)

Borrowings

(82)

(228)

(97)

Lease liabilities

(4,894)

(4,417)

(4,402)

Deferred income tax liabilities

(1,810)

(2,188)

(1,811)

Retirement benefit obligations

(995)

(921)

(1,021)

Provision for liabilities and charges

(133)

(150)

(136)

 

(9,205)

(8,920)

(8,557)

Total liabilities

(51,554)

(47,851)

(49,896)

Net assets

159,737

152,935

152,243

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

4,983

5,807

7,079

Retained earnings

152,253

144,627

142,663

Total equity

159,737

152,935

152,243

 



       

Consolidated statement of cash flow

for the six months ended 30 June 2024

 


Unaudited

Unaudited

Audited


six months

six months

year


ended

ended

ended


30 June

30 June

31 December


2024

2023

2023

 

£'000

£'000

£'000

Cash flows from operating activities




Cash generated from operations

20,137

14,608

38,234

Interest paid

(162)

(39)

(256)

Income tax paid

(6,440)

(4,737)

(8,229)

Net cash generated from operating activities

13,535

9,832

29,749

Cash flows from investing activities




Acquisition of subsidiary undertakings

-

(2,522)

(1,582)

Purchases of property, plant and equipment

(3,429)

(4,164)

(7,665)

Proceeds from sale of property, plant and equipment

323

273

721

Purchases of intangible assets

(1,781)

(902)

(3,033)

Interest received

213

5

212

Net cash used in investing activities

(4,674)

(7,310)

(11,347)

Cash flows from financing activities




Repayments of borrowings

(132)

(1,173)

(1,443)

Payment of lease liabilities

(1,344)

(1,250)

(2,484)

Dividends paid to Company's shareholders

-

-

(15,196)

Purchase of own shares

-

(30)

(33)

Net cash used in financing activities

(1,476)

(2,453)

(19,156)

Net increase/(decrease) in cash in the period

7,385

69

(754)

Cash and cash equivalents at the beginning of the period

32,737

33,962

33,962

Effects of exchange rates on cash and cash equivalents

(670)

(825)

(471)

Cash and cash equivalents at the end of the period

39,452

33,206

32,737

 



 

Notes to the financial statements

for the six months ended 30 June 2024

 

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 2024 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 2023. 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 2023 have been extracted from the statutory accounts for the year ended 31 December 2023, 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 and 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 £9,590,000 (2023: £9,935,000) and on 12,259,877 (2023: 12,260,684) 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


2024

2023

2023

 

£'000

£'000

£'000

Profit on ordinary activities after taxation

9,590

9,935

23,264

Basic earnings per ordinary share

78.4p

81.0p

189.8p

 

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 2024. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2024.

 

For further information, please contact:

 

London Security plc

Richard Pollard

Company Secretary                                                                                                            Tel : 01422 372852

 

Zeus Capital Limited

Chris Fielding / Sarah Mather                                                                                           Tel : 0203 829 5000

 

 

 

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