TIDMLSC
RNS Number : 0585N
London Security PLC
27 September 2021
London Security PLC
(the "Group" or "Company")
Interim Results for the Six Months Ended 30 June 2021
Chairman's Statement
J.G. Murray, Chairman
Financial Highlights
-- Revenue GBP82.7m (2020: GBP67.2m)
-- Operating profit GBP12.3m (2020: GBP7.6m)
-- Earnings per share 75.6p (2020: 39.9p)
TRADING
The financial highlights illustrate that the Group's revenue
increased by GBP15.5 million (23.1%) to GBP82.7 million.
Operating profit increased by GBP4.7 million (61.8%) to GBP12.3
million.
Earnings per share increased by 35.7p (89.5%) to 75.6p.
The period under review reflects the impact from the coronavirus
outbreak, which significantly impacted all the countries in which
we operate in quarter 1 and quarter 2 of 2020. In 2021 there has
largely been a return to normality in our business although some
customers remain closed and there are still some restrictions on
our operations to help reduce transmission. We must be prepared for
further disruption should further waves materialise in any of the
countries in which we operate.
ACQUISITIONS
In the six months to the end of June, the Group made four
acquisitions. It remains a principal aim of the Group to grow
through acquisition. Acquisitions are being sought throughout
Europe and the Group will invest where an adequate return is
envisaged by the Board.
CASH AND FINANCING
The Group's cash balance as at 30 June 2021 was GBP43.7 million.
This is an increase of GBP6.2 million on the 31 December 2020
balance of GBP37.5 million.
In May 2018 the Group entered into a five year multi-currency
facility until 2023 comprising GBP3.15 million and EUR8.40 million.
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
As the situation continues, cash management will be a key
consideration; the London Security Group has a healthy balance
sheet, strong cash reserves and a track record for good cash
generation. The Board therefore considers that with its strong
balance sheet and material net cash position the Group is well
placed to prosper from the rebound in the economy as the vaccine
programmes gain momentum in 2021.
DIVIDS
A final dividend in respect of 2020 of GBP0.40 per ordinary
share was paid to shareholders on 9 July 2021.
J.G. Murray
Chairman
27 September 2021
Consolidated income statement
for the six months ended 30 June 2021
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
Note GBP'000 GBP'000 GBP'000
----------------------------------- ---- ---------- ---------- -----------
Revenue 82,739 67,164 152,723
Cost of sales (21,601) (16,452) (37,387)
----------------------------------- ---- ---------- ---------- -----------
Gross profit 61,138 50,712 115,336
Distribution costs (30,188) (26,310) (56,281)
Administrative expenses (18,670) (16,768) (34,355)
----------------------------------- ---- ---------- ---------- -----------
Operating profit 12,280 7,634 24,700
----------------------------------- ---- ---------- ---------- -----------
EBITDA([) *(]) 16,799 11,951 33,547
Depreciation and amortisation (4,519) (4,317) (8,847)
----------------------------------- ---- ---------- ---------- -----------
Operating profit 12,280 7,634 24,700
----------------------------------- ---- ---------- ---------- -----------
Finance income 21 21 78
Finance costs (99) (96) (201)
----------------------------------- ---- ---------- ---------- -----------
Finance costs - net (78) (75) (123)
----------------------------------- ---- ---------- ---------- -----------
Profit before income tax 12,202 7,559 24,577
Income tax expense (2,862) (2,602) (6,536)
----------------------------------- ---- ---------- ---------- -----------
Profit for the period 9,340 4,957 18,041
----------------------------------- ---- ---------- ---------- -----------
Profit is attributable to
Equity shareholders of the Company 9,267 4,895 17,853
Non-controlling interest 73 62 188
----------------------------------- ---- ---------- ---------- -----------
9,340 4,957 18,041
----------------------------------- ---- ---------- ---------- -----------
Earnings per share
Basic and diluted 3 75.6p 39.9p 145.6p
Dividends
Dividends paid per share Nil Nil 60p
----------------------------------- ---- ---------- ---------- -----------
* 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 2021
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ---------- ---------- -----------
Profit for the financial period 9,340 4,957 18,041
--------------------------------------------------------- ---------- ---------- -----------
Other comprehensive income/(expense):
Items that will not be reclassified subsequently to
profit or loss:
- currency translation differences on foreign operation
consolidation, net of tax (2,679) 3,196 2,396
- actuarial gain recognised in the Nu-Swift pension
scheme - - (4,554)
- movement on deferred tax relating to the Nu-Swift
pension scheme - - 1,594
- actuarial loss recognised in the Ansul pension scheme - - (17)
- movement on deferred tax relating to the Ansul pension
scheme - - 5
--------------------------------------------------------- ---------- ---------- -----------
Other comprehensive income for the period, net of tax (2,679) 3,196 (576)
--------------------------------------------------------- ---------- ---------- -----------
Total comprehensive income for the period 6,661 8,153 17,653
--------------------------------------------------------- ---------- ---------- -----------
Consolidated statement of changes in equity
for the six months ended 30 June 2021
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 2020 123 344 1 2,033 6,442 106,882 349 116,174
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Comprehensive income
for the period:
- profit for the period - - - - - 4,895 62 4,957
- exchange adjustments - - - - 3,196 - - 3,196
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Total comprehensive income
for the period - - - - 3,196 4,895 62 8,153
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Distribution to non-controlling
interest - - - - - - (159) (159)
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
At 30 June 2020 123 344 1 2,033 9,638 111,777 252 124,168
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Comprehensive income
for the period:
- profit for the period - - - - - 12,958 126 13,084
- exchange adjustments - - - - (800) - - (800)
- actuarial loss on pension
schemes - - - - - (4,571) - (4,571)
* movement on deferred tax relating to pension schemes - - - - - 1,599 - 1,599
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Total comprehensive income
for the period - - - - (800) 9,986 126 9,312
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Contributions by and
distributions to owners
of the Company:
- dividends - - - - - (7,356) - (7,356)
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Distribution to non-controlling
interest - - - - - - (1) (1)
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
At 31 December 2020 123 344 1 2,033 8,838 114,407 377 126,123
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Comprehensive income
for the period:
- profit for the period - - - - - 9,267 73 9,340
- exchange adjustments - - - - (2,679) - - (2,679)
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Total comprehensive income
for the period - - - - (2,679) 9,267 73 6,661
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Distribution to non-controlling
interest - - - - - - (28) (28)
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Reduction in non-controlling
interest -- - - - - (123) (103) (226)
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
At 30 June 2021 123 344 1 2,033 6,159 123,551 319 132,530
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Consolidated statement of financial position
as at 30 June 2021
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
---------------------------------------------------- --------- --------- -----------
Assets
Non-current assets
Property, plant and equipment 13,634 13,308 13,046
Right-of-use assets 3,223 2,382 3,254
Intangible assets 66,009 67,502 66,311
Deferred tax asset 799 779 790
Retirement benefit surplus 445 4,959 445
---------------------------------------------------- --------- --------- -----------
84,110 88,930 83,846
---------------------------------------------------- --------- --------- -----------
Current assets
Inventories 15,861 15,182 14,953
Trade and other receivables 30,415 32,499 33,174
Cash and cash equivalents 43,678 34,422 37,456
---------------------------------------------------- --------- --------- -----------
89,954 82,103 85,583
---------------------------------------------------- --------- --------- -----------
Total assets 174,064 171,033 169,429
---------------------------------------------------- --------- --------- -----------
Liabilities
Current liabilities
Trade and other payables (27,110) (29,119) (27,582)
Income tax liabilities (2,300) (2,311) (2,074)
Borrowings (2,397) (2,139) (2,518)
Lease liabilities (1,376) (1,169) (1,451)
Provision for liabilities and charges - - (16)
---------------------------------------------------- --------- --------- -----------
(33,183) (34,738) (33,641)
---------------------------------------------------- --------- --------- -----------
Non-current liabilities
Trade and other payables (923) (1,275) (941)
Borrowings (2,051) (4,270) (3,170)
Lease liabilities (1,851) (1,209) (1,851)
Derivative financial instruments (28) (43) (36)
Deferred income tax liabilities (1,081) (2,873) (1,146)
Retirement benefit obligations (2,249) (2,282) (2,349)
Provision for liabilities and charges (168) (175) (172)
---------------------------------------------------- --------- --------- -----------
(8,351) (12,127) (9,665)
---------------------------------------------------- --------- --------- -----------
Total liabilities (41,534) (46,865) (43,306)
---------------------------------------------------- --------- --------- -----------
Net assets 132,530 124,168 126,123
---------------------------------------------------- --------- --------- -----------
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 6,159 9,638 8,838
Retained earnings 123,551 111,777 114,407
---------------------------------------------------- --------- --------- -----------
Equity attributable to owners of the Parent Company 132,211 123,916 125,746
Non-controlling interest 319 252 377
---------------------------------------------------- --------- --------- -----------
Total equity 132,530 124,168 126,123
---------------------------------------------------- --------- --------- -----------
Consolidated statement of cash flow
for the six months ended 30 June 2021
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ---------- --------------- -----------
Cash flows from operating activities
Cash generated from operations 20,342 12,319 32,862
Interest paid (61) (66) (118)
Income tax paid (4,687) (2,323) (5,524)
--------------------------------------------------------- ---------- --------------- -----------
Net cash generated from operating activities 15,594 9,930 27,220
--------------------------------------------------------- ---------- --------------- -----------
Cash flows from investing activities
Acquisition of subsidiary undertakings (1,496) - (516)
Purchases of property, plant and equipment (2,977) (2,344) (5,063)
Proceeds from sale of property, plant and equipment 384 137 462
Purchases of intangible assets (1,644) (969) (1,244)
Interest received 13 17 27
--------------------------------------------------------- ---------- --------------- -----------
Net cash used in investing activities (5,720) (3,159) (6,334)
--------------------------------------------------------- ---------- --------------- -----------
Cash flows from financing activities
Repayments of borrowings (1,071) (1,015) (2,121)
Payment of lease liabilities (1,097) (987) (2,036)
Dividends paid to Company's shareholders - - (7,356)
Distribution to non-controlling interest (28) (159) (160)
--------------------------------------------------------- ---------- --------------- -----------
Net cash used in financing activities (2,196) (2,161) (11,673)
--------------------------------------------------------- ---------- --------------- -----------
Net increase in cash in the period 7,678 4,610 9,213
Cash and cash equivalents at the beginning of the period 37,456 27,143 27,143
--------------------------------------------------------- ---------- --------------- -----------
Effects of exchange rates on cash and cash equivalents (1,456) 2,669 1,100
--------------------------------------------------------- ---------- --------------- -----------
Cash and cash equivalents at the end of the period 43,678 34,422 37,456
--------------------------------------------------------- ---------- --------------- -----------
Notes to the financial statements
for the six months ended 30 June 2021
1 Nature of information
The financial information contained in this Interim Statement
has been neither audited nor reviewed by the auditors 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 2021 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 2020. 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 2020 have
been extracted from the statutory accounts for the year ended 31
December 2020, which have been delivered to the Registrar of
Companies. The Independent Auditors' 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 GBP9,267,000
(2020: GBP4,895,000) and on 12,261,477 (2020: 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
2021 2020 2020
GBP'000 GBP'000 GBP'000
--------------------------------------------- ---------- ---------- -----------
Profit on ordinary activities after taxation 9,267 4,895 17,853
--------------------------------------------- ---------- ---------- -----------
Basic earnings per ordinary share 75.6p 39.9p 145.6p
--------------------------------------------- ---------- ---------- -----------
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 2021. In accordance with IAS 19 such a
valuation will be prepared for the purposes of the Group's Annual
Report and Accounts 2021.
The information contained within this announcement is considered
to be inside information prior to its release, as defined in
Article 7 of the Market Abuse Regulation No. 596/2014, and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
For further information, please contact:
London Security plc
Richard Pollard
Company Secretary Tel : 01422 372852
WH Ireland Limited
Chris Fielding Tel : 0207 220 1666
Ben Good
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IR EANNXAAFFEEA
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