TIDMLSC
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 GBP66.7m 2017: GBP60.6m
Operating profit GBP10.1m 2017: GBP9.5m
Earnings per share 56.2p 2017: 51.5p
TRADING
The financial highlights illustrate that the Group's revenue
increased by GBP6.1 million (10.1%) to GBP66.7 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 GBP1.3 million on reported turnover.
Operating profit increased by GBP0.6 million (6.3%) to GBP10.1
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 GBP9.8 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 GBP1.9 million
(2017: six businesses at a cost of GBP1.1 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 GBP3.15
million and EUR8.40 million. As a result GBP8.4 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.
DIVIDS
A final dividend in respect of 2017 of GBP0.40 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 GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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 GBP6,891,000
(2017: GBP6,318,000) 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
GBP'000 GBP'000 GBP'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 : 01422 372852
WH Ireland Limited
Chris Fielding Tel : 0207 220 1666
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LLFEEAAIVLIT
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