Interim Results

RNS Number : 7447A

London Security PLC

14 September 2018

 

London Security PLC

(the "Group")

Interim results for the six months ended 30 June 2018

Chairman's statement

FINANCIAL HIGHLIGHTS

Revenue £66.7m                                 2017: £60.6m

Operating profit £10.1m                       2017: £9.5m

Earnings per share 56.2p                    2017: 51.5p

TRADING

The financial highlights illustrate that the Group's revenue increased by £6.1 million (10.1%) to £66.7 million. The underlying revenue increase can largely be attributed to business acquisitions and improvements in the scheduling of service work. These results are also impacted by the movement in the Euro to Sterling average exchange rate over the period, which has decreased from 1.16 to 1.13. This movement in exchange rates had a positive effect of £1.3 million on reported turnover.

Operating profit increased by £0.6 million (6.3%) to £10.1 million. This increase in operating profit is again primarily caused by business acquisitions and improved service scheduling. Adjusting for the change in exchange rates on the same basis as above, operating profit would have been £9.8 million

ACQUISITIONS

In the six months to the end of June, the Group acquired a total of three well established businesses at a cost of £1.9 million (2017: six businesses at a cost of £1.1 million). The integration of these businesses into the Group has, so far, been successful and results are in line with expectations. One of these acquisitions, Linde, expanded the Group's business into Denmark.

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.

FINANCING

At 30 June 2017 and 31 December 2017 the Group's total borrowings had been disclosed as current liabilities as they were due for repayment in May 2018. In May 2018 the Group entered into a new five year multi-currency facility until 2023 comprising £3.15 million and €8.40 million. As a result £8.4 million of these borrowings have been disclosed as non-current liabilities. To limit our exposure to increasing interest rates these loans are subject to interest rate caps of 1.5% LIBOR on the Sterling loan and 0.25% EURIBOR on the Euro loan.

PROSPECTS

The fire security market is experiencing increased competition and downward pressure on prices. Our strategy is to continue to concentrate on the highest levels of customer service to mitigate this. We do not expect the economic environment to become any easier in 2018. Nonetheless your Group remains in a strong position and will continue to focus on meeting the needs of our customers and our shareholders.

DIVIDENDS

A final dividend in respect of 2017 of £0.40 per ordinary share was paid to shareholders on 5 July 2018.

J.G. Murray

Chairman

14 September 2018

 

Consolidated income statement

for the six months ended 30 June 2018

		Unaudited	Unaudited	Audited
		six months	six months	year
		ended	ended	ended
		30 June	30 June	31 December
		2018	2017	2017
	Note	£'000	£'000	£'000
Revenue		66,726	60,631	125,873
Cost of sales		(15,402)	(12,213)	(26,626)
Gross profit		51,324	48,418	99,247
Distribution costs		(25,215)	(23,682)	(47,751)
Administrative expenses		(15,969)	(15,250)	(29,757)
Operating profit		10,140	9,486	21,739
EBITDA*		13,531	12,382	27,934
Depreciation and amortisation		(3,391)	(2,896)	(6,195)
Operating profit		10,140	9,486	21,739
Finance income		28	87	237
Finance costs		(97)	(187)	(392)
Finance costs - net		(69)	(100)	(155)
Profit before income tax		10,071	9,386	21,584
Income tax expense		(3,133)	(3,068)	(7,239)
Profit for the period		6,938	6,318	14,345
Profit is attributable to
Equity shareholders of the Company		6,891	6,318	14,310
Non-controlling interest		47	-	35
		6,938	6,318	14,345
Earnings per share
Basic and diluted	3	56.2p	51.5p	116.7p
Dividends
Dividends paid per share		Nil	Nil	80p

* 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 2018

	Unaudited	Unaudited		Audited
	six months	six months		year
	ended	ended		ended
	30 June	30 June		31 December
	2018	2017		2017
	£'000	£'000		£'000
Profit for the financial period	6,938		6,318		14,345
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	(418)		836		1,439
- actuarial gain recognised in the Nu-Swift pension scheme	-		-		734
- movement on deferred tax relating to the Nu-Swift pension scheme	-		-		(257)
- actuarial loss recognised in the Ansul pension scheme	-		-		721
- movement on deferred tax relating to the Ansul pension scheme	-		-		(313)
Other comprehensive income for the period, net of tax	(418)		836		2,324
Total comprehensive income for the period	6,520		7,154		16,669

 

Consolidated statement of changes in equity

for the six months ended 30 June 2018

	Share	Share	Capital	Merger	Other	Retained	Non-controlling
	capital	premium	redemption	reserve	reserve	earnings	Interest	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 January 2017	123	344	1	2,033	7,031	87,021	-	96,553
Comprehensive income for the period:
- profit for the period	-	-	-	-	-	6,318	-	6,318
- exchange adjustments	-	-	-	-	836	-	-	836
Total comprehensive income for the period	-	-	-	-	836	6,318	-	7,154
At 30 June 2017	123	344	1	2,033	7,867	93,339	-	103,707
Comprehensive income for the period:
- profit for the period	-	-	-	-	-	7,992	35	8,027
- exchange adjustments	-	-	-	-	603	-	-	603
- actuarial gain on pension schemes	-	-	-	-	-	1,455	-	1,455
- movement on deferred tax relating to pension schemes	-	-	-	-	-	(570)	-	(570)
Total comprehensive income for the period	-	-	-	-	603	8,877	35	9,515
Contributions by and distributions to owners of the Company:
- dividends	-	-	-	-	-	(9,808)	-	(9,808)
Contribution from non-controlling interest on business combination	-	-	-	-	-	-	154	154
At 31 December 2017	123	344	1	2,033	8,470	92,408	189	103,568
Comprehensive income for the period:
- profit for the period	-	-	-	-	-	6,891	47	6,938
- exchange adjustments	-	-	-	-	(418)	-	-	(418)
Total comprehensive income for the period	-	-	-	-	(418)	6,891	47	6,520
At 30 June 2018	123	344	1	2,033	8,052	99,299	236	110,088

 

Consolidated statement of financial position

as at 30 June 2018

	Unaudited	Unaudited	Audited
	as at	as at	as at
	30 June	30 June	31 December
	2018	2017	2017
	£'000	£'000	£'000
Assets
Non-current assets
Property, plant and equipment	11,732	11,301	11,589
Intangible assets	61,698	62,625	61,724
Deferred tax asset	589	948	589
Retirement benefit surplus	4,397	3,574	4,397
	78,416	78,448	78,299
Current assets
Inventories	12,437	12,408	11,749
Trade and other receivables	27,725	23,687	26,063
Cash and cash equivalents	29,256	27,542	24,652
	69,418	63,637	62,464
Total assets	147,834	142,085	140,763
Liabilities
Current liabilities
Trade and other payables	(21,503)	(20,557)	(19,576)
Income tax liabilities	(917)	(633)	(1,699)
Borrowings	(2,100)	(11,940)	(11,125)
Derivative financial instruments	-	(115)	(54)
Provision for liabilities and charges	-	(35)	-
	(24,520)	(33,280)	(32,454)
Non-current liabilities
Trade and other payables	(995)	(960)	(1,003)
Borrowings	(8,404)	-	-
Derivative financial instruments	(34)	-	-
Deferred income tax liabilities	(1,886)	(1,633)	(1,830)
Retirement benefit obligations	(1,705)	(2,339)	(1,721)
Provision for liabilities and charges	(202)	(166)	(187)
	(13,226)	(5,098)	(4,741)
Total liabilities	(37,746)	(38,378)	(37,195)
Net assets	110,088	103,707	103,568
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	8,052	7,867	8,470
Retained earnings	99,299	93,339	92,408
Equity attributable to owners of the Parent Company	109,852	103,707	103,379
Non-controlling interest	236	-	189
Total equity	110,088	103,707	103,568

 

Consolidated statement of cash flow

for the six months ended 30 June 2018

	Unaudited	Unaudited	Audited
	six months	six months	year
	ended	ended	ended
	30 June	30 June	31 December
	2018	2017	2017
	£'000	£'000	£'000
Cash flows from operating activities
Cash generated from operations	13,156	12,673	25,182
Interest paid	(97)	(187)	(368)
Income tax paid	(4,374)	(4,310)	(7,249)
Net cash generated from operating activities	8,685	8,176	17,565
Cash flows from investing activities
Acquisition of subsidiary undertakings	(1,537)	(785)	(1,220)
Purchases of property, plant and equipment	(1,898)	(1,590)	(3,384)
Proceeds from sale of property, plant and equipment	114	162	349
Purchases of intangible assets	(115)	(659)	(600)
Proceeds from sale of intangible assets	20	-	-
Interest received	8	30	30
Net cash used in investing activities	(3,408)	(2,842)	(4,825)
Cash flows from financing activities
Repayments of borrowings	(557)	(850)	(1,809)
Dividends paid to Company's shareholders	-	-	(9,808)
Contribution from non-controlling interest	-	-	154
Net cash used in financing activities	(557)	(850)	(11,463)
Effects of exchange rates on cash and cash equivalents	(116)	456	773
Net increase in cash in the period	4,604	4,940	2,050
Cash and cash equivalents at the beginning of the period	24,652	22,602	22,602
Cash and cash equivalents at the end of the period	29,256	27,542	24,652

 

Notes to the financial statements

for the six months ended 30 June 2018

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 2018 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 2017. 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 2017 have been extracted from the statutory accounts for the year ended 31 December 2017, 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 £6,891,000 (2017: £6,318,000) and on 12,261,477 (2017: 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
	2018	2017	2017
	£'000	£'000	£'000
Profit on ordinary activities after taxation	6,891	6,318	14,310
Basic earnings per ordinary share	56.2p	51.5p	116.7p

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 2018. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2018.

For further information, please contact:

London Security plc

Richard Pollard

Company Secretary                                                                            Tel : [phone]

WH Ireland Limited

Chris Fielding                                                                                      Tel : [phone]

 

END

 

 

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