TIDMLSC
RNS Number : 0293A
London Security PLC
19 May 2023
19/05/2023
London Security plc
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH
IS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT
2018, AS AMED. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Final Results for the Year Ended 31 December 2022
Chairman's statement
J.G. Murray, Chairman
Financial highlights
Financial highlights of the audited results for the year ended
31 December 2022 compared with the year ended 31 December 2021 are
as follows:
-- revenue of GBP188.9 million (2021: GBP166.6 million);
-- operating profit of GBP27.2 million (2021: GBP27.2 million);
-- profit for the year of GBP20.2 million (2021: GBP20.0 million);
-- cash of GBP34.0 million (2021: GBP35.7 million);
-- earnings per share for the year of GBP1.65 (2021: GBP1.62); and
-- a dividend per share of GBP0.84 (2021: GBP0.80).
Trading review
The financial highlights illustrate that the Group's revenue
increased by GBP22.3 million (13.4%) to GBP188.9 million and
operating profit remained at GBP27.2 million. These results
reflect:
-- the effect of input inflation which our companies initially
absorbed, but as it became clear that it was a longer term trend we
passed on appropriate price increases to our customers;
-- the positive impact of acquisitions in 2022 and the full
year's trading of acquisitions in 2021;
-- 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 GBP1.3 million on reported revenue
and GBP0.2 million on operating profit.
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
seven security businesses and has grown its presence in Austria,
the United Kingdom, Belgium, Germany and Luxembourg. The Group has
also continued with the acquisition of service contracts from
smaller well-established businesses for integration into the
Group's existing subsidiaries.
Management and staff
2022 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.
Dividends
A final dividend in respect of 2021 of GBP0.42 per ordinary
share was paid to shareholders on 8 July 2022. An interim dividend
in respect of 2022 of GBP0.42 per ordinary share was paid to
shareholders on 28 November 2022. The Board is recommending the
payment of a final dividend in respect of 2022 of GBP0.42 per
ordinary share to be paid on 7 July 2023 to shareholders on the
register on 9 June 2023. The shares will be marked ex-dividend on 8
June 2023.
Covid-19 impact assessment
In 2022 there was largely a return to normality in our business.
The high level of business failures predicted by some commentators
did not occur.
Future prospects
The markets in which we operate are entering what is likely to
be a period of low growth with continued high inflation. The London
Security Group however 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 weather any
downturn. We will also continue to invest in our future and 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 29 June 2023 at 11.30 am.
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
19 May 2023
Consolidated income statement
for the year ended 31 December 2022
2022 2021
Note GBP'000 GBP'000
----------------------------------- ---- -------- --------
Revenue 188,898 166,634
Cost of sales (49,748) (43,096)
----------------------------------- ---- -------- --------
Gross profit 139,150 123,538
Distribution costs (70,565) (59,974)
Administrative expenses (41,420) (36,390)
----------------------------------- ---- -------- --------
Operating profit 27,165 27,174
----------------------------------- ---- -------- --------
EBITDA(*) 37,269 36,273
Depreciation and amortisation (10,104) (9,099)
----------------------------------- ---- -------- --------
Operating profit 27,165 27,174
----------------------------------- ---- -------- --------
Finance income 31 28
Finance costs (242) (204)
----------------------------------- ---- -------- --------
Finance costs - net (211) (176)
----------------------------------- ---- -------- --------
Profit before income tax 26,954 26,998
Income tax expense (6,742) (6,990)
----------------------------------- ---- -------- --------
Profit for the year 20,212 20,008
----------------------------------- ---- -------- --------
Profit is attributable to:
Equity shareholders of the Company 20,203 19,907
Non-controlling interest 9 101
----------------------------------- ---- -------- --------
20,212 20,008
----------------------------------- ---- -------- --------
Earnings per share
Basic and diluted 1 164.8p 162.4p
----------------------------------- ---- -------- --------
* 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 2022
2022 2021
GBP'000 GBP'000
------------------------------------------------------- ------- -------
Profit for the financial year 20,203 19,907
-------------------------------------------------------- ------- -------
Other comprehensive (expense)/income:
Items that may be reclassified subsequently to profit
or loss:
- currency translation differences on foreign currency
net investments 3,602 (3,782)
Items that will not be reclassified subsequently
to profit or loss:
- actuarial loss recognised in the Nu-Swift Pension
Scheme (111) (70)
- movement on deferred tax relating to the Nu-Swift
Pension Scheme surplus 38 25
- actuarial gain recognised in the Ansul Pension
Scheme 1,249 104
- movement on deferred tax relating to the Ansul
Pension Scheme deficit (285) (26)
-------------------------------------------------------- ------- -------
Other comprehensive expense for the year, net of
tax 4,493 (3,749)
-------------------------------------------------------- ------- -------
Equity shareholders of the Company 24,696 16,158
Non-controlling interest 9 101
-------------------------------------------------------- ------- -------
Total comprehensive income for the year 24,705 16,259
-------------------------------------------------------- ------- -------
Consolidated statement of changes in equity
for the year ended 31 December 2022
Capital
Ordinary Share redemption Merger Other Retained Non-controlling Total
shares premium reserve reserve reserves earnings interest equity
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
------------------------------ -------- ------- ----------- ------- -------- -------- --------------- --------
Total comprehensive income
for the year
Profit for the financial
year - - - - - 19,907 101 20,083
Other comprehensive
income/(expense):
- 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
income/(expense)
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 and
1 January 2022 123 344 1 2,033 5,056 124,072 118 131,747
------------------------------ -------- ------- ----------- ------- -------- -------- --------------- --------
Total comprehensive income
for the year
Profit for the financial
year - - - - - 20,203 9 20,212
Other comprehensive
income/(expense):
- exchange adjustments - - - - 3,602 - - 3,602
- actuarial gain on pension
schemes - - - - - 1,138 - 1,138
- net movement on deferred
tax relating to pension
deficit - - - - - (247) - (247)
------------------------------ -------- ------- ----------- ------- -------- -------- --------------- --------
Total comprehensive
income/(expense)
for the year - - - - 3,602 21,094 9 24,705
------------------------------ -------- ------- ----------- ------- -------- -------- --------------- --------
Contributions by and
distributions to owners
of the Company:
- purchase of own shares - - - - - (13) - (13)
- dividends - - - - - (10,298) - (10,298)
------------------------------ -------- ------- ----------- ------- -------- -------- --------------- --------
- - - - - (10,311) - (10,311)
------------------------------ -------- ------- ----------- ------- -------- -------- --------------- --------
Reduction in non-controlling
interest - - - - - (158) (127) (285)
------------------------------ -------- ------- ----------- ------- -------- -------- --------------- --------
At 31 December 2022 123 344 1 2,033 8,658 134,697 - 145,856
------------------------------ -------- ------- ----------- ------- -------- -------- --------------- --------
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 2022
2022 2021
GBP'000 GBP'000
---------------------------------------------------- -------- --------
Assets
Non-current assets
Property, plant and equipment 14,940 13,990
Right of use assets 5,975 4,297
Intangible assets 77,076 70,074
Deferred tax asset 694 778
Retirement benefit surplus 276 380
----------------------------------------------------- -------- --------
98,961 89,519
---------------------------------------------------- -------- --------
Current assets
Inventories 22,260 16,423
Trade and other receivables 40,699 33,021
Cash and cash equivalents 33,962 35,681
----------------------------------------------------- -------- --------
96,921 85,125
---------------------------------------------------- -------- --------
Total assets 195,882 174,644
----------------------------------------------------- -------- --------
Liabilities
Current liabilities
Trade and other payables (36,431) (28,061)
Income tax liabilities (1,440) (1,607)
Borrowings (1,598) (2,430)
Lease liabilities (2,040) (1,603)
Provision (10) (13)
----------------------------------------------------- -------- --------
(41,519) (33,714)
---------------------------------------------------- -------- --------
Non-current liabilities
Trade and other payables (936) (1,058)
Borrowings (236) (1,340)
Lease liabilities (4,033) (2,740)
Derivative financial instruments - (20)
Deferred tax liabilities (2,211) (1,731)
Retirement benefit obligations (953) (2,144)
Provision (138) (150)
----------------------------------------------------- -------- --------
(8,507) (9,183)
---------------------------------------------------- -------- --------
Total liabilities (50,026) (42,897)
----------------------------------------------------- -------- --------
Net assets 145,856 131,747
----------------------------------------------------- -------- --------
Shareholders' equity
Ordinary shares 123 123
Share premium 344 344
Capital redemption reserve 1 1
Merger reserve 2,033 2,033
Other reserves 8,658 5,056
Retained earnings 134,697 124,072
----------------------------------------------------- -------- --------
Equity attributable to owners of the Parent Company 145,856 131,629
Non-controlling interest - 118
----------------------------------------------------- -------- --------
Total equity 145,856 131,747
----------------------------------------------------- -------- --------
Consolidated statement of cash flows
for the year ended 31 December 2022
2022 2021
GBP'000 GBP'000
-------------------------------------------------------- -------- --------
Cash flows from operating activities
Cash generated from operations 30,489 33,909
Interest paid (111) (106)
Income tax paid (7,055) (7,122)
--------------------------------------------------------- -------- --------
Net cash generated from operating activities 23,323 26,681
--------------------------------------------------------- -------- --------
Cash flows from investing activities
Acquisition of subsidiary undertakings (net of cash
acquired) (4,078) (4,871)
Purchases of property, plant and equipment (4,626) (4,880)
Proceeds from the sale of property, plant and equipment 730 682
Purchases of intangible assets (3,193) (2,693)
Interest received 4 7
--------------------------------------------------------- -------- --------
Net cash used in investing activities (11,163) (11,755)
--------------------------------------------------------- -------- --------
Cash flows from financing activities
Repayments of borrowings (2,312) (2,119)
Payment of lease liabilities (2,356) (2,072)
Dividends paid to the Company's shareholders (10,298) (9,807)
Purchase of own shares (13) -
Distribution to non-controlling interest - (150)
Reduction in non-controlling interest (285) (678)
--------------------------------------------------------- -------- --------
Net cash used in financing activities (15,264) (14,826)
--------------------------------------------------------- -------- --------
Net increase in cash in the year (3,104) 100
Cash and cash equivalents at the beginning of the
year 35,681 37,456
Effects of exchange rates on cash and cash equivalents 1,385 (1,875)
--------------------------------------------------------- -------- --------
Cash and cash equivalents at the end of the year 33,962 35,681
--------------------------------------------------------- -------- --------
Notes to the financial statements
for the year ended 31 December 2022
1 Earnings per share
The calculation of basic earnings per ordinary share ("EPS") is
based on the profit on ordinary activities after taxation of
GBP20,212,000 (2021: GBP19,907,000) and on 12,261,477 (2021:
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.
2022 2021
-------------- --------------
GBP'000 Pence GBP'000 Pence
--------------------------------------------- ------- ----- ------- -----
Profit on ordinary activities after taxation 20,212 164.8 19,907 162.4
--------------------------------------------- ------- ----- ------- -----
2 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 2022 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 2021 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 2021. They are also consistent with
those in the full accounts for the year ended 31 December 2022,
which have yet to be published.
The Group will post its annual report and accounts to
shareholders on 25 May 2023, a copy of the annual report and
accounts will be available on the company's website (
www.londonsecurity.org ).
The person responsible for arranging the release of this
announcement on behalf of the Company is Richard Pollard, Company
Secretary.
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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