Preliminary Results

RNS Number : 4209L

London Security PLC

06 May 2010

 



 

 

LONDON SECURITY PLC

6 MAY 2010

PRELIMINARY RESULTS

FINANCIAL HIGHLIGHTS

Financial highlights of the audited results for the year ended 31 December 2009 compared with the year ended 31 December 2008 are as follows:

·      turnover of £86.0 million (2008: £74.9 million);

·      operating profit before depreciation and amortisation of £23.2 million (2008: £21.6 million); and

·      operating profit of £19.8 million (2008: £18.9 million).

TRADING REVIEW

The financial highlights illustrate that the Group's turnover increased by £11.1 million (14.8%) to £86.0 million and operating profit increased by £0.9 million (4.8%) to £19.8 million.

The Group has continued to support and develop its traditional business roots in servicing fire extinguishers, hose reels and fire alarms and growing our new activities through our multi-service strategy offering. This was achieved through a series of training and employee development programmes, which has resulted in improved customer retention and greater motivation of the workforce. The Group continues its evolution from solely an extinguisher supplier to the customers' safety partner.

In summary 2009 was a difficult year, but with the benefit of acquisitions and a favourable exchange rate we have still recorded creditable results despite the testing economic environment.

ACQUISITIONS

In 2008 the Group acquired the contracts and brand name of Somati FIE N.V. in Belgium. This new business unit has now been integrated into our operations and has contributed fully towards our results in 2009.

In the UK we have continued to acquire further contracts to service fire equipment through smaller acquisitions.  No fixed overhead was added as a result of these UK acquisitions.

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.

MANAGEMENT AND STAFF

2009 was a year in which the staff performed well and, on your behalf, I would like to express thanks and appreciation for their contribution.

DIVIDENDS

The Board is not recommending the payment of a final dividend in respect of 2009.

Dividend policy continues to be reviewed regularly by the Board.

FINANCING

In 2008 the Group suffered a charge of £7.7 million as a result of exchange losses on foreign currency loans. In 2009 the Group implemented a net investment hedge against this risk which permits the Group to recognise exchange rate volatility through reserves. Falling interest rates have resulted in lower interest payable and receivable within finance costs.

FUTURE PROSPECTS

2010 will also be a challenging year, but with the effect of past and potential acquisitions and our multi-service offering, we are in a strong position to face the challenges that will invariably present. Therefore we expect to continue to deliver strong results in the future.

ANNUAL GENERAL MEETING

The Annual General Meeting will be held at 10 Bruton Street, 5^th Floor, London W1J 6PX on 9 June 2010 at 11a.m.  You will find enclosed a form of proxy for use at that Meeting which you are requested to complete and return in accordance with the instructions on the form.  I shall, along with your Directors, look forward to meeting you at that time.

J.G. MURRAY

Chairman

4 May 2010

Consolidated Income Statement
For the year ended 31 December 2009

		2009	2008
	Note	£'000	£'000
Revenue		85,968	74,892
Cost of sales		(14,507)	(12,618)
Gross profit		71,461	62,274
Distribution costs		(32,520)	(27,051)
Administrative expenses		(19,177)	(16,346)
EBITDA*		23,171	21,592
Depreciation and amortisation		(3,407)	(2,715)
Operating profit		19,764	18,877
Finance income		560	1,679
Finance costs		(2,021)	(3,362)
Exchange loss on foreign currency		-	(7,654)
Finance costs - net		(1,461)	(9,337)
Profit before income tax		18,303	9,540
Income tax expense		(3,772)	(3,983)
Profit for the year attributable to equity shareholders of the Company		14,531	5,557
Earnings per share
Basic and diluted	1	118.2p	45.2p
Dividends
Dividends paid per share		-	130.0p

* Earnings before interest, tax, depreciation, amortisation and impairment charges.

Consolidated statement of comprehensive income

for the year ended 31 December 2009

		2009	2008
		£'000	£'000
Profit for the financial year		14,531	5,557
Other comprehensive income:
Currency translation differences on foreign currency net investments net of tax		(1,366)	4,053
Foreign currency loan hedges net of tax		2,552	-
Actuarial loss recognised in pension scheme		(397)	(708)
Movement on deferred tax relating to pension scheme		(177)	(36)
Other comprehensive income for the year, net of tax		612	3,309
Total comprehensive income for the year		15,143	8,866

Consolidated Statement of Changes in Equity

For the year ended 31 December 2009

				Profit
	Share	Merger	Other	and loss
	capital	reserve	reserve	account	Total
	£'000	£'000	£'000	£'000	£'000
At 1 January 2008	123	2,033	1,071	34,401	37,628
Profit for the financial period	-	-	-	5,557	5,557
Transactions with owners:					-
Dividends	-	-	-	(15,980)	(15,980)
Other comprehensive income:
Exchange adjustments	-	-	4,053	-	4,053
Actuarial loss on pension scheme	-	-	-	(708)	(708)
Movement on deferred tax relating to pension asset	-	-	-	(36)	(36)
At 1 January 2009	123	2,033	5,124	23,234	30,514
Profit for the financial period	-	-	-	14,531	14,531
Other comprehensive income:
Exchange adjustments	-	-	(1,366)	-	(1,366)
Actuarial loss on pension scheme	-	-	-	(397)	(397)
Movement on deferred tax relating to pension asset	-	-	-	(177)	(177)
Foreign currency loan hedges net of tax	-	-	2,552	-	2,552
At 31 December 2009	123	2,033	6,310	37,191	45,657

The merger reserve is not a distributable reserve.

The other reserve relates entirely to the effects of changes in foreign currency exchange rates.

Consolidated Statement of Financial Position

As at 31 December 2009

		2009	2008
		£'000	£'000
Assets
Non-current assets
Property, plant and equipment		8,552	9,787
Intangible assets		52,427	53,210
Deferred tax asset		604	743
		61,583	63,740
Current assets
Inventories		7,804	8,545
Trade and other receivables		17,849	20,820
Cash and cash equivalents		19,070	10,875
		44,723	40,240
Total assets		106,306	103,980
Liabilities
Current liabilities
Trade and other payables		(15,534)	(17,148)
Income tax liabilities		(902)	(1,548)
Borrowings		(7,597)	(7,488)
Provision for liabilities and charges		(18)	-
		(24,051)	(26,184)
Non-current liabilities
Trade and other payables		(18)	-
Borrowings		(35,596)	(46,241)
Derivative financial instruments		(296)	(212)
Deferred tax liabilities		(83)	(41)
Retirement benefit obligations		(605)	(742)
Provision for liabilities and charges		-	(46)
		(36,598)	(47,282)
Total liabilities		(60,649)	(73,466)
Net assets		45,657	30,514
Shareholders' equity
Ordinary shares		123	123
Merger reserve		2,033	2,033
Other reserves		6,310	5,124
Retained earnings		37,191	23,234
Total shareholders' equity		45,657	30,514

Consolidated Statement of Cash Flow
For the year ended 31 December 2009

		2009	2008
		£'000	£'000
Cash flow from operating activities
Cash generated from operations		24,355	15,552
Interest paid		(1,422)	(2,687)
Income tax paid		(4,386)	(4,826)
Net cash generated from operating activities		18,547	8,039
Cash flow from investing activities
Acquisition of subsidiary undertakings		(375)	(222)
Purchases of property, plant and equipment		(1,777)	(2,923)
Proceeds from sale of property, plant and equipment		271	426
Purchases of intangible assets		(607)	(5,156)
Proceeds from sale of intangible assets		-	31
Interest received		120	1,188
Net cash used in investing activities		(2,368)	(6,656)
Cash flows from financing activities
Repayments of borrowings		(7,984)	(4,535)
New long-term loans		-	18,200
Dividends paid to Company's shareholders		-	(15,980)
Net cash used in financing activities		(7,984)	(2,315)
Net increase/(decrease) in cash in the year		8,195	(932)
Cash and cash equivalents at beginning of the year		10,875	11,807
Cash and cash equivalents at end of the year		19,070	10,875

1 Earnings per Share

The calculation of basic earnings per ordinary share ("EPS") is based on the profit on ordinary activities after taxation of £14,531,000 (2008: £5,557,000) and on 12,294,798 (2008: 12,294,798) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

For diluted EPS, the weighted average number of shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The only potential ordinary shares in the Group are in respect of the unapproved share option scheme. The revised weighted average number of shares is 12,294,798 (2008: 12,296,487). After taking into account the effect of dilutive securities, the basic EPS and adjusted EPS figures are unaltered.

	2009			2008
	£'000	Pence	£'000		Pence
Profit on ordinary activities after taxation	14,531	118.2	5,557		45.2

2        This preliminary announcement does not constitute the Company's statutory accounts within the meaning of Section 434 of the Companies Act 2006.

The results for the year ended 31 December 2009 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 financial information for the year ended 31 December 2008 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The report of the auditors on those filed accounts was unqualified.  The accounts for the year ended 31 December 2009 and 31 December 2008 did not contain a statement under s498 (1) to (4) of the Companies Act 2006 or under s237(1) to (4) of the Companies Act 1985.

This preliminary announcement has been prepared in accordance with International Financial Reporting Standards. The Group will post its annual report and accounts to shareholders on 14 May 2010. A copy of the annual report and accounts can be found on the company's webpage (www.londonsecurity.org).

Enquiries:                    London Security plc

                                    Richard Pollard

                                    Company Secretary                                         Tel:      [phone]

 

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