Final Results

RNS Number : 2734M

London Security PLC

06 May 2015

 



London Security plc

Annual Report and Accounts 2014

CHAIRMAN'S STATEMENT

FINANCIAL HIGHLIGHTS

Financial highlights of the audited results for the year ended 31 December 2014 compared with the year ended 31 December 2013 are as follows:

·      revenue of £100.9 million (2013: £101.4 million);

·      operating profit before depreciation and amortisation of £23.9 million (2013: £24.1 million);

·      operating profit of £19.7 million (2013: £20.0 million); and

·      profit after income tax of £12.7 million (2013: £13.7 million).

TRADING REVIEW

The financial highlights illustrate that the Group's revenue decreased by £0.5 million (0.5%) to £100.9 million. However, these results are impacted by the movement in the Euro to Sterling average exchange rate which has increased from 1.18 to 1.24. This movement in exchange rates had an adverse effect of £4.0 million on reported turnover. If the 2014 results had been translated at 2013 rates, revenue would have been £104.9 million instead of £100.9 million (increase of 3.5% on the prior year).

Operating profit decreased by £0.3 million (1.5%) to £19.7 million. Adjusting for the change in the exchange rate on the same basis as above, operating profit would have been £20.6 million instead of £19.7 million (increase of 3.0%). This performance is very satisfactory and whilst the trading environment remains difficult we are hopeful of growth returning to our market.

A more detailed review of this year's performance is given in the Financial Review and Strategic Report.

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 prices where an adequate return is envisaged by the Board. In the year under review the Group has consolidated its presence, particularly in Austria and the UK with the incorporation of PMP Manus G.m.b.H., and the acquisition of Tunbridge Wells Fire Protection Limited and the Pyrotec businesses, Pyrotec Fire Protection Limited and Pyrotec Fire Detection Limited. In addition a further seven acquisitions of service contracts were concluded for smaller, well established businesses for integration into the Group's existing subsidiaries.

MANAGEMENT AND STAFF

2014 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

A final dividend in respect of 2013 of £0.31 per ordinary share was paid to shareholders on 8 July 2014.

An interim dividend in respect of 2014 of £0.31 per ordinary share was paid to shareholders on 19 December 2014.

The Board is recommending the payment of a final dividend in respect of 2014 of £0.31 per ordinary share to be paid on 8 July 2015 to shareholders on the register on 12 June 2015. The shares will be marked ex-dividend on 10 June 2015.

FUTURE PROSPECTS

Economic growth in the Group's market has been depressed in 2014 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 and loyal customer base, the Board is optimistic for further success in 2015 as growth improves.

ANNUAL GENERAL MEETING

The Annual General Meeting will be held at 10 Bruton Street, 5^th Floor, London W1J 6PX on 17 June 2015 at 11 am.  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.  Your Directors look forward to meeting you at that time.

J.G. Murray

Chairman

5 May 2015

Consolidated income statement

for the year ended 31 December 2014

		2014	2013
	Note	£'000	£'000
Revenue		100,876	101,362
Cost of sales		(18,638)	(19,785)
Gross profit		82,238	81,577
Distribution costs		(38,106)	(37,894)
Administrative expenses		(24,451)	(23,729)
Operating profit		19,681	19,954
EBITDA*		23,938	24,059
Depreciation and amortisation		(4,257)	(4,105)
Operating profit		19,681	19,954
Finance income		188	377
Finance costs		(832)	(475)
Finance costs - net		(644)	(98)
Profit before income tax		19,037	19,856
Income tax expense		(6,362)	(6,148)
Profit for the year attributable to equity shareholders of the Company		12,675	13,708
Earnings per share
Basic and diluted	1	103.4p	111.8p

* Earnings before interest, tax, depreciation and amortisation.

Consolidated statement of comprehensive income

for the year ended 31 December 2014

		2014	2013
		£'000	£'000
Profit for the financial year		12,675	13,708
Other comprehensive income:
Items that will not be reclassified subsequently to profit or loss
- currency translation differences on foreign currency net investments, net of tax		(1,955)	331
- actuarial gain/(loss) recognised in the Nu-Swift pension scheme		127	(72)
- movement on deferred tax relating to Nu-Swift pension scheme surplus		(518)	(485)
- Nu-Swift pension scheme surplus recognised		-	1,794
- actuarial loss recognised in the Ansul pension scheme		(191)	(381)
- movement on deferred tax relating to Ansul pension scheme deficit		69	166
Other comprehensive (loss)/gain for the year, net of tax		(2,468)	1,353
Total comprehensive income for the year		10,207	15,061

Consolidated statement of changes in equity

for the year ended 31 December 2014

						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 2013	123	344	1	2,033	5,382	69,136	77,019
Total comprehensive income for the year
Profit for the financial period	-	-	-	-	-	13,708	13,708
Other comprehensive income:
- exchange adjustments	-	-	-	-	331	-	331
- actuarial loss on pension scheme	-	-	-	-	-	(453)	(453)
- net movement on deferred tax relating to pension asset	-	-	-	-	-	(319)	(319)
- brought forward pension surplus recognised	-	-	-	-	-	1,794	1,794
Total comprehensive income for the year	-	-	-	-	331	14,730	15,061
Contributions by and distributions to owners of the Company:
- dividends	-	-	-	-	-	(9,319)	(9,319)
- release of provision for unclaimed dividends	-	-	-	-	-	50	50
Total contributions by and distributions to owners of the Company	-	-	-	-	-	(9,269)	(9,269)
At 1 January 2014	123	344	1	2,033	5,713	74,597	82,811
Total comprehensive income for the year
Profit for the financial period	-	-	-	-	-	12,675	12,675
Other comprehensive income:
- exchange adjustments	-	-	-	-	(1,955)	-	(1,955)
- actuarial loss on pension schemes	-	-	-	-	-	(64)	(64)
- net movement on deferred tax relating to pension asset	-	-	-	-	-	(449)	(449)
Total comprehensive income for the year	-	-	-	-	(1,955)	12,162	10,207
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

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 2014

		2014	2013
		£'000	£'000
Assets
Non-current assets
Property, plant and equipment		9,747	9,973
Intangible assets		61,400	58,325
Deferred tax asset		753	632
Retirement benefit surplus		3,283	2,424
Derivative financial instruments		-	92
		75,183	71,446
Current assets
Inventories		9,494	8,826
Trade and other receivables		19,573	21,153
Cash and cash equivalents		20,978	20,565
		50,045	50,544
Total assets		125,228	121,990
Liabilities
Current liabilities
Trade and other payables		(18,232)	(16,992)
Income tax liabilities		(1,389)	(866)
Borrowings		(1,782)	(1,878)
Provision for liabilities and charges		-	(4)
		(21,403)	(19,740)
Non-current liabilities
Trade and other payables		(739)	(509)
Borrowings		(13,678)	(16,261)
Derivative financial instruments		(227)	-
Deferred tax liabilities		(1,701)	(991)
Retirement benefit obligations		(1,843)	(1,678)
Provision for liabilities and charges		(221)	-
		(18,409)	(19,439)
Total liabilities		(39,812)	(39,179)
Net assets		85,416	82,811
Shareholders' equity
Ordinary shares		123	123
Share premium		344	344
Capital redemption reserve		1	1
Merger reserve		2,033	2,033
Other reserves		3,758	5,713
Retained earnings		79,157	74,597
Total shareholders' equity		85,416	82,811

Consolidated statement of cash flow

for the year ended 31 December 2014

		2014	2013
		£'000	£'000
Cash flows from operating activities
Cash generated from operations		24,338	22,913
Interest paid		(472)	(418)
Income tax paid		(5,218)	(5,625)
Net cash generated from operating activities		18,648	16,870
Cash flows from investing activities
Acquisition of subsidiary undertakings (net of cash acquired)		(2,164)	(3,002)
Purchases of property, plant and equipment		(2,304)	(2,537)
Proceeds from sale of property, plant and equipment		242	275
Proceeds from sale of intangible assets		-	33
Purchases of intangible assets		(3,519)	(2,575)
Interest received		68	96
Net cash used in investing activities		(7,677)	(7,710)
Cash flows from financing activities
Repayments of borrowings		(1,855)	(16,610)
New borrowings		-	19,675
Associated loan arrangement fees		-	(488)
Dividends paid to Company's shareholders		(7,602)	(9,319)
Net cash used in financing activities		(9,457)	(6,742)
Effects of exchange rates on cash and cash equivalents		(1,101)	286
Net increase in cash in the year		413	2,704
Cash and cash equivalents at beginning of the year		20,565	17,861
Cash and cash equivalents at end of the year		20,978	20,565

Notes to the financial statements

for the year ended 31 December 2014

1 Earnings per share

The calculation of basic earnings per ordinary share ("EPS") is based on the profit on ordinary activities after taxation of £12,675,000 (2013: £13,708,000) and on 12,261,477 (2013: 12,261,477) 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. 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.

	2014		2013
	£'000	Pence	£'000	Pence
Profit on ordinary activities after taxation	12,675	103.4	13,708	111.8

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 2014 have been extracted from the full accounts of the Group for that year which received an unqualified auditor's report and which have not yet been delivered to the Registrar of Companies.  The financial information for the year ended 31 December 2013 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The report of the auditor on those filed accounts was unqualified.  The accounts for the year ended 31 December 2014 and 31 December 2013 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 15 May 2015. 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]

WH Ireland Limited

                                                Andrew Kitchingman                                                          Tel:       [phone]

                                                Liam Gribben

 

END

 

 

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