TIDMLSC
RNS Number : 0834N
London Security PLC
04 May 2018
London Security plc
Final Results for the Year Ended 31 December 2017
Chairman's statement
Financial highlights
Financial highlights of the audited results for the year ended
31 December 2017 compared with the year ended 31 December 2016 are
as follows:
-- revenue of GBP125.9 million (2016: GBP114.8 million);
-- EBITDA of GBP27.9 million (2016: GBP26.3 million);
-- operating profit of GBP21.7 million (2016: GBP20.9 million);
-- profit for the year of GBP14.3 million (2016: GBP13.8 million); and
-- a dividend per share of GBP0.80 (2016: GBP0.80).
Trading review
The financial highlights illustrate that the Group's revenue
increased by GBP11.1 million (9.7%) to GBP125.9 million. However,
these results are impacted by the movement in the Euro to Sterling
average exchange rate, which has decreased from 1.23 to 1.14. This
movement in exchange rate had a favourable effect of GBP7.3 million
on reported revenue. If the 2017 results had been translated at
2016 rates, revenue would have been GBP118.6 million instead of
GBP125.9 million (increase of 3.3% on the prior year).
Operating profit increased by GBP0.8 million (3.8%) to GBP21.7
million. Adjusting for the change in the exchange rate on the same
basis as above, operating profit would have been GBP20.2 million
instead of GBP21.7 million (decrease of 3.3%). A more detailed
review of this year's performance is given in the Financial Review
and the 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 in the Netherlands, Germany and the UK
with the acquisitions of service contracts from nine smaller
well-established businesses for integration into the Group's
existing subsidiaries. In addition, the Group has taken a 75%
interest in a further business in the United Kingdom which will
allow us to bring in house a partner with which we have previously
subcontracted.
Management and staff
2017 was a year in which the staff performed well and, on behalf
of the shareholders, I would like to express thanks and
appreciation for their contribution. The Group recognises that we
can only achieve our aims with talented and dedicated colleagues
who provide outstanding customer service in every area of the
business.
Michael Gailer
Following a short illness Michael Gailer sadly passed away on 5
March 2018. Michael had provided wise counsel to the Company for
over 19 years. Michael will be deeply missed by his fellow
Directors and our thoughts and condolences are with his family at
this difficult time.
Dividends
A final dividend in respect of 2016 of GBP0.40 per ordinary
share was paid to shareholders on 5 July 2017. An interim dividend
in respect of 2017 of GBP0.40 per ordinary share was paid to
shareholders on 7 December 2017. The Board is recommending the
payment of a final dividend in respect of 2017 of GBP0.40 per
ordinary share to be paid on 5 July 2018 to shareholders on the
register on 8 June 2018. The shares will be marked ex-dividend on 7
June 2018.
Future prospects
The Group will continue to grow and consolidate the fire
protection industry with the finest customer care.
Annual General Meeting
The Annual General Meeting will be held at 2 Eaton Gate, London
SW1W 9BJ, on 20 June 2018 at 2 pm. 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
3 May 2018
Consolidated income statement
for the year ended 31 December 2017
2017 2016
Note GBP'000 GBP'000
------------------------------------ ----- --------- ---------
Revenue 125,873 114,845
Cost of sales (26,626) (23,638)
------------------------------------ ----- --------- ---------
Gross profit 99,247 91,207
Distribution costs (47,751) (42,191)
Administrative expenses (29,757) (28,154)
------------------------------------ ----- --------- ---------
Operating profit 21,739 20,862
------------------------------------ ----- --------- ---------
EBITDA* 27,934 26,321
Depreciation and amortisation (6,195) (5,459)
------------------------------------ ----- --------- ---------
Operating profit 21,739 20,862
------------------------------------ ----- --------- ---------
Finance income 237 176
Finance costs (392) (433)
------------------------------------ ----- --------- ---------
Finance costs - net (155) (257)
------------------------------------ ----- --------- ---------
Profit before income tax 21,584 20,605
Income tax expense (7,239) (6,822)
------------------------------------ ----- --------- ---------
Profit for the year 14,345 13,783
------------------------------------ ----- --------- ---------
Profit is attributable to:
Equity shareholders of the Company 14,310 13,783
Non-controlling interest 35 -
------------------------------------ ----- --------- ---------
14,345 13,783
Earnings per share
Basic and diluted 1 116.7p 112.4p
------------------------------------ ----- --------- ---------
* Earnings before interest, tax, depreciation and amortisation.
The above results are all as a result of continuing
operations.
Consolidated statement of comprehensive income
for the year ended 31 December 2017
2017 2016
GBP'000 GBP'000
--------------------------------------------------------- -------- --------
Profit for the financial year 14,345 13,783
---------------------------------------------------------- -------- --------
Other comprehensive income/(expense):
Items that may be reclassified subsequently to profit
or loss:
- currency translation differences on foreign currency
net investments 1,439 4,441
Items that will not be reclassified subsequently
to profit or loss:
- actuarial gain recognised in the Nu-Swift pension
scheme 734 263
- movement on deferred tax relating to Nu-Swift pension
scheme surplus (257) (92)
- actuarial gain/(loss) recognised in the Ansul pension
scheme 721 (200)
- movement on deferred tax relating to Ansul pension
scheme deficit (313) 61
---------------------------------------------------------- -------- --------
Other comprehensive income for the year, net of tax 2,324 4,473
---------------------------------------------------------- -------- --------
Total comprehensive income for the year 16,669 18,256
---------------------------------------------------------- -------- --------
Consolidated statement of changes in equity
for the year ended 31 December 2017
Share Capital
Share premium redemption Merger Other Retained Non-controlling Total
capital account reserve reserve reserve earnings interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- ----------- -------- -------- --------- ---------------- --------
At 1 January 2016 123 344 1 2,033 2,590 82,932 - 88,023
-------------------------- -------- -------- ----------- -------- -------- --------- ---------------- --------
Total comprehensive
income
for the year
Profit for the financial
year - - - - - 13,783 - 13,783
Other comprehensive
income/(expense):
- exchange adjustments - - - - 4,441 - - 4,441
- actuarial gain on
pension
schemes - - - - - 63 - 63
- net movement on
deferred
tax relating to pension
asset - - - - - (31) - (31)
-------------------------- -------- -------- ----------- -------- -------- --------- ---------------- --------
Total comprehensive
income
for the year - - - - 4,441 13,815 - 18,256
-------------------------- -------- -------- ----------- -------- -------- --------- ---------------- --------
Contributions by and
distributions
to owners of the
Company:
- dividends - - - - - (9,808) - (9,808)
- release of accrual for
unclaimed dividends - - - - - 82 - 82
-------------------------- -------- -------- ----------- -------- -------- --------- ---------------- --------
Total contributions by
and
distributions to owners
of
the Company - - - - - (9,726) - (9,726)
-------------------------- -------- -------- ----------- -------- -------- --------- ---------------- --------
At 31 December 2016 and 1
January 2017 123 344 1 2,033 7,031 87,021 - 96,553
-------------------------- -------- -------- ----------- -------- -------- --------- ---------------- --------
Total comprehensive
income
for the year
Profit for the financial
year - - - - - 14,310 35 14,345
Other comprehensive
income/(expense):
- exchange adjustments - - - - 1,439 - - 1,439
- actuarial gain on
pension
schemes - - - - - 1,455 - 1,455
- net movement on
deferred
tax relating to pension
asset - - - - - (570) - (570)
-------------------------- -------- -------- ----------- -------- -------- --------- ---------------- --------
Total comprehensive
income
for the year - - - - 1,439 15,195 35 16,669
-------------------------- -------- -------- ----------- -------- -------- --------- ---------------- --------
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
-------------------------- -------- -------- ----------- -------- -------- --------- ---------------- --------
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 2017
2017 2016
GBP'000 GBP'000
----------------------------------------------------- --------- ---------
Assets
Non-current assets
Property, plant and equipment 11,589 10,937
Intangible assets 61,724 62,749
Deferred tax asset 589 919
Retirement benefit surplus 4,397 3,574
------------------------------------------------------ --------- ---------
78,299 78,179
----------------------------------------------------- --------- ---------
Current assets
Inventories 11,749 11,095
Trade and other receivables 26,063 23,138
Cash and cash equivalents 24,652 22,602
------------------------------------------------------ --------- ---------
62,464 56,835
----------------------------------------------------- --------- ---------
Total assets 140,763 135,014
------------------------------------------------------ --------- ---------
Liabilities
Current liabilities
Trade and other payables (19,576) (19,344)
Income tax liabilities (1,699) (1,180)
Borrowings (11,125) (1,870)
Derivative financial instruments (54) -
Provision for liabilities and charges - (35)
------------------------------------------------------ --------- ---------
(32,454) (22,429)
----------------------------------------------------- --------- ---------
Non-current liabilities
Trade and other payables (1,003) (957)
Borrowings - (10,789)
Derivative financial instruments - (172)
Deferred tax liabilities (1,830) (1,705)
Retirement benefit obligations (1,721) (2,279)
Provision for liabilities and charges (187) (130)
------------------------------------------------------ --------- ---------
(4,741) (16,032)
----------------------------------------------------- --------- ---------
Total liabilities (37,195) (38,461)
------------------------------------------------------ --------- ---------
Net assets 103,568 96,553
------------------------------------------------------ --------- ---------
Shareholders' equity
Ordinary shares 123 123
Share premium 344 344
Capital redemption reserve 1 1
Merger reserve 2,033 2,033
Other reserves 8,470 7,031
Retained earnings 92,408 87,021
------------------------------------------------------ --------- ---------
Equity attributable to owners of the Parent Company 103,379 96,553
Non-controlling interest 189 -
----------------------------------------------------- --------- ---------
Total equity 103,568 96,553
------------------------------------------------------ --------- ---------
Consolidated statement of cash flow
for the year ended 31 December 2017
2017 2016
GBP'000 GBP'000
--------------------------------------------------------- --------- ---------
Cash flows from operating activities
Cash generated from operations 25,182 26,059
Interest paid (368) (408)
Income tax paid (7,249) (7,213)
---------------------------------------------------------- --------- ---------
Net cash generated from operating activities 17,565 18,438
---------------------------------------------------------- --------- ---------
Cash flows from investing activities
Acquisition of subsidiary undertakings (net of
cash acquired) (1,220) (2,222)
Purchases of property, plant and equipment (3,384) (2,774)
Proceeds from the sale of property, plant and equipment 349 323
Purchases of intangible assets (600) (1,662)
Interest received 30 43
---------------------------------------------------------- --------- ---------
Net cash used in investing activities (4,825) (6,292)
---------------------------------------------------------- --------- ---------
Cash flows from financing activities
Repayments of borrowings (1,809) (1,819)
Dividends paid to Company's shareholders (9,808) (9,726)
Contribution from non-controlling interest 154 -
--------------------------------------------------------- --------- ---------
Net cash used in financing activities (11,463) (11,545)
---------------------------------------------------------- --------- ---------
Effects of exchange rates on cash and cash equivalents 773 2,265
---------------------------------------------------------- --------- ---------
Net increase in cash in the year 2,050 2,866
Cash and cash equivalents at the beginning of the
year 22,602 19,736
---------------------------------------------------------- --------- ---------
Cash and cash equivalents at the end of the year 24,652 22,602
---------------------------------------------------------- --------- ---------
Notes to the financial statements
for the year ended 31 December 2017
1 Earnings per share
The calculation of basic earnings per ordinary share ("EPS") is
based on the profit on ordinary activities after taxation of
GBP14,310,000 (2016: GBP13,783,000) and on 12,261,477 (2016:
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.
2017 2016
---------------- ----------------
GBP'000 Pence GBP'000 Pence
---------------------------------------------- -------- ------ -------- ------
Profit on ordinary activities after taxation 14,310 116.7 13,783 112.4
---------------------------------------------- -------- ------ -------- ------
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 2017 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 2016 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 2017 and 31 December 2016 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 16 May 2018.
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 Tel: 01422 372 852
Company Secretary
WH Ireland Limited
Chris Fielding Tel: 0207 220 1666
This information is provided by RNS
The company news service from the London Stock Exchange
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