Preliminary Results

RNS Number : 8118D

London Security PLC

02 May 2013

 



London Security plc

Preliminary Results

FINANCIAL HIGHLIGHTS

Financial highlights of the audited results for the year ended 31 December 2012 compared with the year ended 31 December 2011 are as follows: 

·      revenue of £94.1 million (2011: £96.3 million);

·      operating profit before depreciation and amortisation of £23.0 million (2011: £24.5 million);

·      operating profit of £19.4 million (2011: £20.8 million); and

·      profit after income tax of £19.0 million (2011: £14.1 million).

TRADING REVIEW

The financial highlights illustrate that the Group's revenue decreased by £2.2 million (2.3%) to £94.1 million and operating profit decreased by £1.4 million (6.7%) to £19.4 million. However, these results are distorted by the movement in the Euro to Sterling average exchange rate which has increased from 1.15 to 1.23. If the 2012 results had been translated at 2011 rates, revenue would have been £99.2 million instead of £94.1 million, (increase of 3.0% on prior year).On the same basis operating profit would have been £20.6 million instead of £19.4 million, (decrease of 1.0%). This performance is very satisfactory in this difficult trading environment.

Profit after tax includes the sale of part the Group's site in Elland, West Yorkshire. The sale realised £7.2 million and the profit on sale was £5.9 million. A new factory and office building was constructed in Elland at a cost of £3.2 million.

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

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 entered a new market, Luxembourg, with the acquisition of A.L.P.I. sarl.

MANAGEMENT AND STAFF

2012 was a year in which the staff performed well and, on your behalf, I would like to express thanks and appreciation for their contribution.

FINANCING

The Group has benefited from the low level of interest rates and has repaid a further £10.7 million of borrowings.

The Group's borrowings are due for repayment by June 2013 and are therefore disclosed as current liabilities. Lloyds TSB Bank Plc irrevocably confirmed their agreement to new facilities on 29 April 2013.  The final documentation is expected to be finalised no later than 31 May 2013.  The Group has new facilities of £20 million until 2018.  This will be repaid at the rate of £2 million per year over 5 years with a £10 million repayment at maturity. The multi-currency loan will be denominated £6 million in Sterling and £14 million in Euros.

DIVIDENDS

An interim dividend in respect of 2012 of £0.25 per ordinary share was paid to shareholders on 22 June 2012.

A further interim dividend in respect of 2012 of £0.29 per ordinary share was paid to shareholders on 7 December 2012.

The Board is recommending the payment of a final dividend in respect of 2012 of £0.38 per ordinary share.to be paid on 8 July 2013.

Dividend policy continues to be reviewed regularly by the Board.

FUTURE PROSPECTS

Economic growth in the Group's market has been depressed in 2012 as uncertainty surrounding European sovereign debt continues leading to austerity measures, reduced customer confidence and related economic fragility. However, the Group does not operate in the most troubled of the peripheral Eurozone economies and fire protection is not an item of discretionary expenditure. As a leading provider in this market with a well diversified and loyal customer base, the Board is optimistic for further success in 2013.

ANNUAL GENERAL MEETING

The Annual General Meeting will be held at 10 Bruton Street, 5^th Floor, London W1J 6PX on 19 June 2013 at 11.00am.

J.G. Murray

Chairman

1 May 2013

		2012	2011
	Note	£'000	£'000
Revenue		94,128	96,267
Cost of sales		(18,164)	(19,481)
Gross profit		75,964	76,786
Distribution costs		(35,268)	(35,474)
Administrative expenses		(21,267)	(20,554)
Operating profit		19,429	20,758
EBITDA*		23,041	24,549
Depreciation and amortisation		(3,612)	(3,791)
Operating profit		19,429	20,758
Profit on disposal of fixed assets		5,928	-
Finance income		721	855
Finance costs		(965)	(1,286)
Finance costs - net		(244)	(431)
Profit before income tax		25,113	20,327
Income tax expense		(6,115)	(6,199)
Profit for the year attributable to equity shareholders of the Company		18,998	14,128
Earnings per share
Basic and diluted	1	154.9p	115.2p

* Earnings before interest, tax, depreciation and amortisation.

		2012	2011
		£'000	£'000
Profit for the financial year		18,998	14,128
Other comprehensive income:
- currency translation differences on foreign currency net investments, net of tax		(507)	(421)
- actuarial loss recognised in pension scheme		(491)	(68)
- movement on deferred tax relating to pension scheme		180	16
- net pension asset not recognised due to uncertainty over future recoverability		(573)	(568)
Other comprehensive loss for the year, net of tax		(1,391)	(1,041)
Total comprehensive income for the year		17,607	13,087

						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 2011	123	-	-	2,033	6,310	47,567	56,033
Total comprehensive income for the year
Profit for the financial period	-	-	-	-	-	14,128	14,128
Other comprehensive income:
- exchange adjustments	-	-	-	-	(421)	-	(421)
- actuarial loss on pension scheme	-	-	-	-	-	(68)	(68)
- movement on deferred tax relating to pension asset	-	-	-	-	-	16	16
- movement in net pension asset not recognised due to uncertainty over future recoverability	-	-	-	-	-	(568)	(568)
Total comprehensive income for the year	-	-	-	-	(421)	13,508	13,087
Contributions by and distributions to owners of the Company:
- dividends	-	-	-	-	-	(2,944)	(2,944)
- issue of shares	-	344	-	-	-	-	344
- purchase of own shares	-	-	1	-	-	(483)	(482)
Total contributions by and distributions to owners of the Company	-	344	1	-	-	(3,427)	(3,082)
At 1 January 2012	123	344	1	2,033	5,889	57,648	66,038
Total comprehensive income for the year
Profit for the financial period	-	-	-	-	-	18,998	18,998
Other comprehensive income:
- exchange adjustments	-	-	-	-	(507)	-	(507)
- actuarial loss on pension scheme	-	-	-	-	-	(491)	(491)
- movement on deferred tax relating to pension asset	-	-	-	-	-	180	180
- movement in net pension asset not recognised due to uncertainty over future recoverability	-	-	-	-	-	(573)	(573)
Total comprehensive income for the year	-	-	-	-	(507)	18,114	17,607
Contributions by and distributions to owners of the Company:
- dividends	-	-	-	-	-	(6,621)	(6,621)
- purchase of own shares	-	-	-	-	-	(5)	(5)
Total contributions by and distributions to owners of the Company	-	-	-	-	-	(6,626)	(6,626)
At 31 December 2012	123	344	1	2,033	5,382	69,136	77,019

The merger reserve is not a distributable reserve. The other reserve relates entirely to the effects of changes in foreign currency exchange rates.

		2012	2011
		£'000	£'000
Assets
Non-current assets
Property, plant and equipment		9,511	7,389
Intangible assets		54,455	53,454
Deferred tax asset		488	500
		64,454	61,343
Current assets
Inventories		9,123	8,329
Trade and other receivables		18,512	18,373
Cash and cash equivalents		17,861	23,043
		45,496	49,745
Total assets		109,950	111,088
Liabilities
Current liabilities
Trade and other payables		(15,767)	(15,919)
Income tax liabilities		(65)	(1,004)
Borrowings		(15,060)	(7,030)
Derivative financial instruments		(99)	-
Provision for liabilities and charges		(4)	(109)
		(30,995)	(24,062)
Non-current liabilities
Trade and other payables		(427)	(526)
Borrowings		-	(19,329)
Derivative financial instruments		-	(103)
Deferred tax liabilities		(333)	(359)
Retirement benefit obligations		(1,176)	(671)
		(1,936)	(20,988)
Total liabilities		(32,931)	(45,050)
Net assets		77,019	66,038
Shareholders' equity
Ordinary shares		123	123
Share premium		344	344
Capital redemption reserve		1	1
Merger reserve		2,033	2,033
Other reserves		5,382	5,889
Retained earnings		69,136	57,648
Total shareholders' equity		77,019	66,038

		2012	2011
		£'000	£'000
Cash flows from operating activities
Cash generated from operations		20,621	22,887
Interest paid		(419)	(626)
Income tax paid		(7,051)	(6,027)
Net cash generated from operating activities		13,151	16,234
Cash flows from investing activities
Acquisition of subsidiary undertakings (net of cash acquired)		(1,226)	(1,390)
Purchases of property, plant and equipment		(5,402)	(2,332)
Proceeds from sale of property, plant and equipment		7,146	300
Proceeds from sale of intangible assets		1	-
Purchases of intangible assets		(1,162)	(1,653)
Interest received		217	266
Net cash used in investing activities		(426)	(4,809)
Cash flows from financing activities
Repayments of borrowings		(10,658)	(7,252)
Purchase of own shares		(5)	(482)
Issue of shares		-	344
Dividends paid to Company's shareholders		(6,621)	(2,944)
Net cash used in financing activities		(17,284)	(10,334)
Effects of exchange rates on cash and cash equivalents		(623)	(334)
Net (decrease)/increase in cash in the year		(5,182)	757
Cash and cash equivalents at beginning of the year		23,043	22,286
Cash and cash equivalents at end of the year		17,861	23,043

1 Earnings per share

The calculation of basic earnings per ordinary share ("EPS") is based on the profit on ordinary activities after taxation of £18,998,000 (2011: £14,128,000) and on 12,261,486 (2011: 12,265,538) 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.

	2012			2011
	£'000	Pence		£'000	Pence
Profit on ordinary activities after taxation	18,998	154.9		14,128	115.2

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 2012 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 2011 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 2012 and 31 December 2011 did not contain a statement under s498 (1) to (4) of the 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 17 May 2013. 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]

                                                Nick Field                                                                        Tel:       [phone]

 

END

 

 

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