TIDMLSC
RNS Number : 7821Y
London Security PLC
09 September 2022
London Security PLC
(the "Group" or "Company")
Interim results for the six months ended 30 June 2022
Chairman's statement
J.G. Murray, Chairman
Financial highlights
-- Revenue GBP88.6m (2021: GBP82.7m)
-- Operating profit GBP10.9m (2021: GBP12.3m)
-- Earnings per share 68.3p (2021: 75.6p)
Trading
The financial highlights illustrate that the Group's revenue
increased by GBP5.9 million (7.1%) to GBP88.6 million.
Operating profit decreased by GBP1.4 million (11.4%) to GBP10.9
million.
The period under review reflects the impact from upward input
price pressures in all of the countries in which we operate. These
increases are being driven by worldwide supply chain disruption,
energy and wage inflation following the war in Ukraine and the
recovery from the coronavirus pandemic. Some of these supply price
increases have been passed on to our customers, but we have
absorbed an element of these which this has reduced our operating
profit. The inflationary spike has had an adverse effect on
business confidence which we are starting to experience as a
reduced willingness to invest by our customers.
Acquisitions
In the six months to the end of June the Group acquired four
companies on the continent. In addition it strengthened its
presence in Germany, Austria and the United Kingdom through the
acquisition of service contracts to be integrated into the Group's
existing subsidiaries. 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.
Cash and financing
The Group's cash balance as at 30 June 2022 was GBP35.3 million.
This is a decrease of GBP0.4 million on the 31 December 2021
balance of GBP35.7 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% SONIA on the Sterling loan
and 0.25% EURIBOR on the Euro loan.
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 with its strong balance sheet and
material net cash position the Group is well placed to cope with
any economic downturn.
Dividends
A final dividend in respect of 2021 of GBP0.42 per ordinary
share was paid to shareholders on 8 July 2022.
J.G. Murray
Chairman
9 September 2022
Consolidated income statement
for the six months ended 30 June 2022
Unaudited Unaudited Audited
six
months six months year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
Note GBP'000 GBP'000 GBP'000
----------------------------------- ---- --------- ---------- -----------
Revenue 88,613 82,739 166,634
Cost of sales (23,380) (21,601) (43,096)
----------------------------------- ---- --------- ---------- -----------
Gross profit 65,233 61,138 123,538
Distribution costs (33,937) (30,188) (59,974)
Administrative expenses (20,394) (18,670) (36,390)
----------------------------------- ---- --------- ---------- -----------
Operating profit 10,902 12,280 27,174
----------------------------------- ---- --------- ---------- -----------
EBITDA* 15,742 16,799 36,273
Depreciation and amortisation (4,840) (4,519) (9,099)
----------------------------------- ---- --------- ---------- -----------
Operating profit 10,902 12,280 27,174
----------------------------------- ---- --------- ---------- -----------
Finance income 1 21 28
Finance costs (100) (99) (204)
----------------------------------- ---- --------- ---------- -----------
Finance costs - net (99) (78) (176)
----------------------------------- ---- --------- ---------- -----------
Profit before income tax 10,803 12,202 26,998
Income tax expense (2,423) (2,862) (6,990)
----------------------------------- ---- --------- ---------- -----------
Profit for the period 8,380 9,340 20,008
----------------------------------- ---- --------- ---------- -----------
Profit is attributable to:
Equity shareholders of the Company 8,374 9,267 19,907
Non-controlling interest 6 73 101
----------------------------------- ---- --------- ---------- -----------
8,380 9,340 20,008
----------------------------------- ---- --------- ---------- -----------
Earnings per share
Basic and diluted 3 68.3p 75.6p 162.4p
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 2022
Unaudited Unaudited Audited
six
months six months year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- --------- ---------- -----------
Profit for the financial period 8,380 9,340 20,008
--------------------------------------------------------- --------- ---------- -----------
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 1,087 (2,679) (3,782)
- actuarial gain recognised in the Nu-Swift pension
scheme - - (70)
- movement on deferred tax relating to the Nu-Swift
pension scheme - - 25
- actuarial loss recognised in the Ansul pension scheme - - 104
- movement on deferred tax relating to the Ansul pension
scheme - - (26)
--------------------------------------------------------- --------- ---------- -----------
Other comprehensive income for the period, net of tax 1,087 (2,679) (3,749)
--------------------------------------------------------- --------- ---------- -----------
Total comprehensive income for the period 9,467 6,661 16,259
--------------------------------------------------------- --------- ---------- -----------
Consolidated statement of changes in equity
for the six months ended 30 June 2022
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 2021 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
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Comprehensive income
for the period:
- profit for the period - - - - - 10,640 28 10,668
- exchange adjustments - - - - (1,103) - - (1,103)
- actuarial gain on pension
schemes - - - - - 34 - 34
* movement on deferred tax relating to pension schemes - - - - - (1) - (1)
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Total comprehensive income
for the period - - - - (1,103) 10,673 28 9,598
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Contributions by and
distributions to owners
of the Company:
- dividends - - - - - (9,807) - (9,807)
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Distribution to non-controlling
interest - - - - - - (122) (122)
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Reduction in non-controlling
interest - - - - - (345) (107) (452)
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
At 31 December 2021 123 344 1 2,003 5,056 124,072 118 131,747
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Comprehensive income
for the period:
- profit for the period - - - - - 8,374 6 8,380
- exchange adjustments - - - - 1,087 - - 1,087
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Total comprehensive income
for the period - - - - 1,087 8,374 6 9,467
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
At 30 June 2022 123 344 1 2,003 6,143 132,446 124 141,214
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Consolidated statement of financial position
as at 30 June 2022
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
---------------------------------------------------- --------- --------- -----------
Assets
Non-current assets
Property, plant and equipment 14,186 13,634 13,990
Right-of-use assets 5,297 3,223 4,297
Intangible assets 73,643 66,009 70,074
Deferred tax asset 814 799 778
Retirement benefit surplus 380 445 380
---------------------------------------------------- --------- --------- -----------
94,320 84,110 89,519
---------------------------------------------------- --------- --------- -----------
Current assets
Inventories 18,326 15,861 16,423
Trade and other receivables 37,800 30,415 33,021
Cash and cash equivalents 35,256 43,678 35,681
---------------------------------------------------- --------- --------- -----------
91,382 89,954 85,125
---------------------------------------------------- --------- --------- -----------
Total assets 185,702 174,064 174,644
---------------------------------------------------- --------- --------- -----------
Liabilities
Current liabilities
Trade and other payables (30,336) (27,110) (28,061)
Income tax liabilities (564) (2,300) (1,607)
Borrowings (2,437) (2,397) (2,430)
Lease liabilities (1,722) (1,376) (1,603)
Derivative financial instruments (20) - -
Provision for liabilities and charges (14) - (13)
---------------------------------------------------- --------- --------- -----------
(35,093) (33,183) (33,714)
---------------------------------------------------- --------- --------- -----------
Non-current liabilities
Trade and other payables (1,033) (923) (1,058)
Borrowings (431) (2,051) (1,340)
Lease liabilities (3,627) (1,851) (2,740)
Derivative financial instruments - (28) (20)
Deferred income tax liabilities (1,982) (1,081) (1,731)
Retirement benefit obligations (2,180) (2,249) (2,144)
Provision for liabilities and charges (142) (168) (150)
---------------------------------------------------- --------- --------- -----------
(9,395) (8,351) (9,183)
---------------------------------------------------- --------- --------- -----------
Total liabilities (44,488) (41,534) (42,897)
---------------------------------------------------- --------- --------- -----------
Net assets 141,214 132,530 131,747
---------------------------------------------------- --------- --------- -----------
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 6,143 6,159 5,056
Retained earnings 132,446 123,551 124,072
---------------------------------------------------- --------- --------- -----------
Equity attributable to owners of the Parent Company 141,090 132,211 131,629
Non-controlling interest 124 319 118
---------------------------------------------------- --------- --------- -----------
Total equity 141,214 132,530 131,747
---------------------------------------------------- --------- --------- -----------
Consolidated statement of cash flow
for the six months ended 30 June 2022
Unaudited Unaudited Audited
six
months six months year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- --------- ---------- -----------
Cash flows from operating activities
Cash generated from operations 13,501 20,342 33,909
Interest paid (50) (61) (106)
Income tax paid (5,617) (4,687) (7,122)
--------------------------------------------------------- --------- ---------- -----------
Net cash generated from operating activities 7,834 15,594 26,681
--------------------------------------------------------- --------- ---------- -----------
Cash flows from investing activities
Acquisition of subsidiary undertakings (3,058) (1,496) (4,871)
Purchases of property, plant and equipment (1,923) (2,977) (4,880)
Proceeds from sale of property, plant and equipment 380 384 682
Purchases of intangible assets (1,661) (1,644) (2,693)
Interest received 1 13 7
--------------------------------------------------------- --------- ---------- -----------
Net cash used in investing activities (6,261) (5,720) (11,755)
--------------------------------------------------------- --------- ---------- -----------
Cash flows from financing activities
Repayments of borrowings (1,332) (1,071) (2,119)
Payment of lease liabilities (1,057) (1,097) (2,072)
Dividends paid to Company's shareholders - - (9,807)
Distribution to non-controlling interest - - (150)
Reduction in non-controlling interest - (28) (678)
--------------------------------------------------------- --------- ---------- -----------
Net cash used in financing activities (2,389) (2,196) (14,826)
--------------------------------------------------------- --------- ---------- -----------
Net increase in cash in the period (816) 7,678 100
Cash and cash equivalents at the beginning of the period 35,681 37,456 37,456
Effects of exchange rates on cash and cash equivalents 391 (1,456) (1,875)
--------------------------------------------------------- --------- ---------- -----------
Cash and cash equivalents at the end of the period 35,256 43,678 35,681
--------------------------------------------------------- --------- ---------- -----------
Notes to the financial statements
for the six months ended 30 June 2022
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 2022 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 2021. 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 2021 have
been extracted from the statutory accounts for the year ended 31
December 2021, 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 GBP8,374,000
(2021: GBP9,267,000) and on 12,261,477 (2021: 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
2022 2021 2021
GBP'000 GBP'000 GBP'000
--------------------------------------------- --------- ---------- -----------
Profit on ordinary activities after taxation 8,374 9,267 19,907
--------------------------------------------- --------- ---------- -----------
Basic earnings per ordinary share 68.3p 75.6p 162.4p
--------------------------------------------- --------- ---------- -----------
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 2022. In accordance with IAS 19 such a
valuation will be prepared for the purposes of the Group's Annual
Report and Accounts 2022.
For further information, please contact:
London Security plc
Richard Pollard
Company Secretary Tel : 01422 372852
WH Ireland Limited
Chris Fielding Tel : 0207 220 1666
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IR UPUQWBUPPUBR
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