TIDMLSC
RNS Number : 9067L
London Security PLC
18 May 2022
London Security plc
Final Results for the Year Ended 31 December 2021
Chairman's statement
J.G. Murray, Chairman
Financial Highlights
Financial highlights of the audited results for the year ended
31 December 2021 compared with the year ended 31 December 2020 are
as follows:
-- revenue of GBP166.6 million (2020: GBP152.7 million);
-- operating profit of GBP27.2 million (2020: GBP24.7 million);
-- profit for the year of GBP20.0 million (2020: GBP18.0 million);
-- cash of GBP35.7 million (2020: GBP37.5 million);
-- earnings per share for the year of GBP1.62 (2020: GBP1.46); and
-- a dividend per share of GBP0.80 (2020: GBP0.60).
Trading review
The financial highlights illustrate that the Group's revenue
increased by GBP13.9 million (9.1%) to GBP166.6 million and
operating profit increased by GBP2.5 million (10.1%) to GBP27.2
million. These results reflect:
-- a good response to the impact of Covid-19. Many of our
businesses were severely hampered by Covid-19 throughout 2020, but
the easing of restrictions in 2021 allowed our business to
capitalise on the rebound in the economies in which we operate;
-- the positive impact of acquisitions in 2021 in the United
Kingdom, Denmark, Belgium, France and Germany;
-- improved performance from our service business in continental Europe;
-- continued improvement from newer service offerings (e.g.
emergency lights and passive fire protection); and
-- the movement in the Euro to Sterling average exchange rate,
which had an adverse effect of GBP3.4 million on reported revenue
and GBP0.7 million on operating profit. 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 acquired
established security businesses and grew its presence in Denmark,
the UK, Belgium, the Netherlands, Germany and France with the
acquisition of service contracts from smaller well-established
businesses for integration into the Group's existing
subsidiaries.
Management and staff
2021 was a year in which the staff were required to operate
under challenging conditions, and on behalf of the shareholders, I
would like to express thanks and appreciation for their
contribution as essential service providers. The health and
wellbeing of our people is our highest priority. 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.
Dividends
A final dividend in respect of 2020 of GBP0.40 per ordinary
share was paid to shareholders on 9 July 2021. An interim dividend
in respect of 2021 of GBP0.40 per ordinary share was paid to
shareholders on 26 November 2021. The Board is recommending the
payment of a final dividend in respect of 2021 of GBP0.42 per
ordinary share to be paid on 8 July 2022 to shareholders on the
register on 10 June 2022. The shares will be marked ex-dividend on
9 June 2022.
Covid-19 impact assessment
The Group is responsible for maintaining, manufacturing and
supplying fire protection and fire suppression equipment throughout
Europe and has been designated as essential contractor status by a
number of our clients including care, health, housing and food
production services. It was essential that we continued to meet our
obligations and continued to operate from our factories and that
our field-based service engineers continued to visit our customers'
sites for essential responsive and planned maintenance.
In 2021 there was largely a return to normality in our business
although there were still some restrictions on our operations in
some countries to help reduce transmission. The high level of
business failures predicted by some commentators did not occur. We
must be prepared for further disruption should further waves
materialise in any of the countries in which we operate.
During 2021 the Group traded strongly despite the interruptions
caused by varying levels of temporary restrictions imposed by the
governments of the countries in which we operate. This reflects the
essential nature of the services we provide. At the date of this
report we have a full service force in the field and have
experienced a strong start to 2022. The experience of 2021 shows
the resilience of our business.
Future prospects
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 the Group is well placed to
capitalise on the increase in demand we are seeing for our products
and services. The Group plans to continue to grow through
acquisitions
Annual General Meeting
The Annual General Meeting ("AGM") will be held at 2 Jubilee
Way, Elland, West Yorkshire HX5 9DY, on 22 June 2022 at 11.30 am.
On 21 February 2022 the UK government announced the end of
restrictions in response to Covid -19. The Company confirms that
shareholders are able to attend in person should they wish to do
so. However, we strongly encourage shareholders to vote on all
resolutions by completing the enclosed form of proxy for use at
that Meeting, which you are requested to return in accordance with
the instructions on the form.
J.G. Murray
Chairman
17 May 2022
Consolidated income statement
for the year ended 31 December 2021
2021 2020
Notes GBP'000 GBP'000
----------------------------------------------- ----- -------- --------
Revenue 166,634 152,723
Cost of sales (43,096) (37,387)
----------------------------------------------- ----- -------- --------
Gross profit 123,538 115,336
Distribution costs (59,974) (56,281)
Administrative expenses (36,740) (33,027)
Net impairment gain/(loss) on financial assets 1 350 (1,328)
----------------------------------------------- ----- -------- --------
Operating profit 27,174 24,700
----------------------------------------------- ----- -------- --------
EBITDA* 36,273 33,547
Depreciation and amortisation (9,099) (8,847)
----------------------------------------------- ----- -------- --------
Operating profit 27,174 24,700
----------------------------------------------- ----- -------- --------
Finance income 28 78
Finance costs (204) (201)
----------------------------------------------- ----- -------- --------
Finance costs - net (176) (123)
----------------------------------------------- ----- -------- --------
Profit before income tax 26,998 24,577
Income tax expense (6,990) (6,536)
----------------------------------------------- ----- -------- --------
Profit for the year 20,008 18,041
----------------------------------------------- ----- -------- --------
Profit is attributable to:
Equity shareholders of the Company 19,907 17,853
Non-controlling interest 101 188
----------------------------------------------- ----- -------- --------
20,008 18,041
----------------------------------------------- ----- -------- --------
Earnings per share
Basic and diluted 2 162.4p 145.6p
----------------------------------------------- ----- -------- --------
* 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 2021
2021 2020
Notes GBP'000 GBP'000
------------------------------------------------------- ------ ------- -------
Profit for the financial year 19,907 17,853
--------------------------------------------------------------- ------- -------
Other comprehensive (expense)/income:
Items that may be reclassified subsequently to profit
or loss:
- currency translation differences on foreign currency
net investments (3,782) 2,396
Items that will not be reclassified subsequently
to profit or loss:
- actuarial loss recognised in the Nu-Swift Pension
Scheme (70) (4,554)
- movement on deferred tax relating to the Nu-Swift
Pension Scheme surplus 25 1,594
- actuarial gain/(loss) recognised in the Ansul
Pension Scheme 104 (17)
- movement on deferred tax relating to the Ansul
Pension Scheme deficit (26) 5
--------------------------------------------------------------- ------- -------
Other comprehensive expense for the year, net of
tax (3,749) (576)
--------------------------------------------------------------- ------- -------
Equity shareholders of the Company 16,158 17,277
Non-controlling interest 101 188
--------------------------------------------------------------- ------- -------
Total comprehensive income for the year 16,259 17,465
--------------------------------------------------------------- ------- -------
Consolidated statement of changes in equity
for the year ended 31 December 2021
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 2020 123 344 1 2,033 6,442 106,882 349 116,174
-------------------------------- ------- -------- ----------- ------- ------- -------- --------------- -------
Total comprehensive income
for the year
Profit for the financial
year - - - - - 17,853 188 18,041
Other comprehensive
(expense)/income:
- exchange adjustments - - - - 2,396 - - 2,396
- actuarial loss on pension
schemes - - - - - (4,571) - (4,571)
- net movement on deferred
tax relating to pension
deficit - - - - - 1,599 - 1,599
-------------------------------- ------- -------- ----------- ------- ------- -------- --------------- -------
Total comprehensive
(expense)/income
for the year - - - - 2,396 14,881 188 17,465
-------------------------------- ------- -------- ----------- ------- ------- -------- --------------- -------
Contributions by and
distributions to owners
of the Company:
- dividends - - - - - (7,356) - (7,356)
-------------------------------- ------- -------- ----------- ------- ------- -------- --------------- -------
Distribution to non-controlling
interest - - - - - - (160) (160)
-------------------------------- ------- -------- ----------- ------- ------- -------- --------------- -------
At 31 December 2020 and
1 January 2021 123 344 1 2,033 8,838 114,407 377 126,123
-------------------------------- ------- -------- ----------- ------- ------- -------- --------------- -------
Total comprehensive income
for the year
Profit for the financial
year - - - - - 19,907 101 20,083
Other comprehensive
(expense)/income:
- exchange adjustments - - - - (3,782) - - (3,782)
- actuarial gain on pension
schemes - - - - - 34 - 34
- net movement on deferred
tax relating to pension
deficit - - - - - (1) - (1)
-------------------------------- ------- -------- ----------- ------- ------- -------- --------------- -------
Total comprehensive
(expense)/income
for the year - - - - (3,782) 19,940 101 16,259
-------------------------------- ------- -------- ----------- ------- ------- -------- --------------- -------
Contributions by and
distributions to owners
of the Company:
- dividends - - - - - (9,807) - (9,807)
-------------------------------- ------- -------- ----------- ------- ------- -------- --------------- -------
Distribution to non-controlling
interest - - - - - - (150) (150)
-------------------------------- ------- -------- ----------- ------- ------- -------- --------------- -------
Reduction in non-controlling
interest - - - - - (468) (210) (678)
-------------------------------- ------- -------- ----------- ------- ------- -------- --------------- -------
At 31 December 2021 123 344 1 2,033 5,056 124,072 118 131,747
-------------------------------- ------- -------- ----------- ------- ------- -------- --------------- -------
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 2021
2021 2020
Notes GBP'000 GBP'000
---------------------------------------------------- ------ -------- --------
Assets
Non-current assets
Property, plant and equipment 13,990 13,046
Right of use assets 4,297 3,254
Intangible assets 70,074 66,311
Deferred tax asset 778 790
Retirement benefit surplus 380 445
------------------------------------------------------------ -------- --------
89,519 83,846
----------------------------------------------------------- -------- --------
Current assets
Inventories 16,423 14,953
Trade and other receivables 33,021 33,174
Cash and cash equivalents 35,681 37,456
------------------------------------------------------------ -------- --------
85,125 85,583
----------------------------------------------------------- -------- --------
Total assets 174,644 169,429
------------------------------------------------------------ -------- --------
Liabilities
Current liabilities
Trade and other payables (28,061) (27,582)
Income tax liabilities (1,607) (2,074)
Borrowings (2,430) (2,518)
Lease liabilities (1,603) (1,451)
Provision (13) (16)
------------------------------------------------------------ -------- --------
(33,714) (33,641)
----------------------------------------------------------- -------- --------
Non-current liabilities
Trade and other payables (1,058) (941)
Borrowings (1,340) (3,170)
Lease liabilities (2,740) (1,851)
Derivative financial instruments (20) (36)
Deferred tax liabilities (1,731) (1,146)
Retirement benefit obligations (2,144) (2,349)
Provision (150) (172)
------------------------------------------------------------ -------- --------
(9,183) (9,665)
----------------------------------------------------------- -------- --------
Total liabilities (42,897) (43,306)
------------------------------------------------------------ -------- --------
Net assets 131,747 126,123
------------------------------------------------------------ -------- --------
Shareholders' equity
Ordinary shares 123 123
Share premium 344 344
Capital redemption reserve 1 1
Merger reserve 2,033 2,033
Other reserves 5,056 8,838
Retained earnings 124,072 114,407
------------------------------------------------------------ -------- --------
Equity attributable to owners of the Parent Company 131,629 125,746
Non-controlling interest 118 377
------------------------------------------------------------ -------- --------
Total equity 131,747 126,123
------------------------------------------------------------ -------- --------
Consolidated statement of cash flows
for the year ended 31 December 2021
2021 2020
Notes GBP'000 GBP'000
-------------------------------------------------------- ------ -------- --------
Cash flows from operating activities
Cash generated from operations 33,909 32,862
Interest paid (106) (118)
Income tax paid (7,122) (5,524)
---------------------------------------------------------------- -------- --------
Net cash generated from operating activities 26,681 27,220
---------------------------------------------------------------- -------- --------
Cash flows from investing activities
Acquisition of subsidiary undertakings (net of cash
acquired) (4,871) (516)
Purchases of property, plant and equipment (4,880) (5,063)
Proceeds from the sale of property, plant and equipment 682 462
Purchases of intangible assets (2,693) (1,244)
Interest received 7 27
---------------------------------------------------------------- -------- --------
Net cash used in investing activities (11,755) (6,334)
---------------------------------------------------------------- -------- --------
Cash flows from financing activities
Repayments of borrowings (2,119) (2,121)
Payment of lease liabilities (2,072) (2,036)
Dividends paid to the Company's shareholders (9,807) (7,356)
Distribution to non-controlling interest (150) (160)
Reduction in non-controlling interest (678) -
---------------------------------------------------------------- -------- --------
Net cash used in financing activities (14,826) (11,673)
---------------------------------------------------------------- -------- --------
Net increase in cash in the year 100 9,213
Cash and cash equivalents at the beginning of the
year 37,456 27,143
---------------------------------------------------------------- -------- --------
Effects of exchange rates on cash and cash equivalents (1,875) 1,100
---------------------------------------------------------------- -------- --------
Cash and cash equivalents at the end of the year 35,681 37,456
---------------------------------------------------------------- -------- --------
Notes to the financial statements
for the year ended 31 December 2021
1 Net impairment losses on financial assets
This charge relates entirely to the movement in expected credit
losses in respect of trade receivables.
2 Earnings per share
The calculation of basic earnings per ordinary share ("EPS") is
based on the profit on ordinary activities after taxation of
GBP19,907,000 (2020: GBP17,853,000) and on 12,261,477 (2020:
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.
2021 2020
-------------- --------------
GBP'000 Pence GBP'000 Pence
--------------------------------------------- ------- ----- ------- -----
Profit on ordinary activities after taxation 19,907 162.4 17,853 145.6
--------------------------------------------- ------- ----- ------- -----
3 This financial information within 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 2021 have been extracted
from the full accounts of the Group for that year which received an
unmodified auditor's report, and which have not yet been delivered
to the Registrar of Companies. The financial information for the
year ended 31 December 2020 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
unmodified and does not include a statement under section 498(2) or
(3) of the Companies Act 2006.
This preliminary announcement has been prepared in accordance
with the recognition and measurement principles of UK adopted
international accounting standards in conformity with the
requirements of the Companies Act 2006 and in accordance with the
AIM rules. The financial information included in this preliminary
announcement does not include all the disclosures required in
accounts prepared in accordance with UK adopted international
accounting standards in conformity with the requirements of the
Companies Act 2006 and accordingly it does not itself comply with
UK adopted international accounting standards in conformity with
the requirements of the Companies Act 2006. The accounting policies
used in the preparation of this preliminary announcement have
remained unchanged from those set out in the statutory accounts for
the year ended 31 December 2020. They are also consistent with
those in the full accounts for the year ended 31 December 2021,
which have yet to be published.
The Group will post its annual report and accounts to
shareholders on 27 May 2022, a copy of the annual report and
accounts will be available on the company's website (
www.londonsecurity.org ).
Enquiries
London Security plc
Richard Pollard Tel: 01422 372 852
Company Secretary
WH Ireland Limited
Chris Fielding Tel: 0207 220 1666
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