TIDMLSC
RNS Number : 2710N
London Security PLC
22 September 2023
London Security PLC
(the "Group" or "Company")
Interim results for the six months ended 30 June 2023
Chairman's statement
J.J. Murray, Chairman
Financial Highlights
-- Revenue GBP108.8m (2022: GBP88.6m)
-- Operating profit GBP13.7m (2022: GBP10.9m)
-- Earnings per share 81.0p (2022: 68.3p)
Trading
The financial highlights illustrate that the Group's revenue
increased by GBP20.2 million (22.8%) to GBP108.8 million.
Operating profit increased by GBP2.8 million (25.7%) to GBP13.7
million. This increase is partly attributed to the Group being able
to recruit more direct staff. This enabled us to address delayed
inspections in the period, in turn delivering a non-recurring
benefit to the business' revenue and profit.
These results reflect the favourable movement in the Euro to
Sterling average exchange rate, which has decreased from 1.19 to
1.14. If the 2023 results from the European subsidiaries had been
translated at 2022 rates, revenue would have been GBP105.2 million
instead of GBP108.8 million, which would have represented an
increase of 18.7% on the prior year. On the same basis, operating
profit would have been GBP13.1 million instead of GBP13.7 million,
an increase of 20.2% compared to 2022.
The period under review also 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 and energy and wage inflation following the recovery
from the coronavirus pandemic and the war in Ukraine. These supply
price increases have been passed on to our customers where
possible.
Acquisitions
In the six months to the end of June, at an aggregate cost of
GBP2.5 million, the Group acquired two companies in Belgium, and it
strengthened its presence in Germany and the United Kingdom through
the acquisition of service contracts which have been 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 2023 was GBP33.2 million.
This is a decrease of GBP0.8 million on the 31 December 2022
balance of GBP34.0 million.
Prospects
Cash management is a key consideration in difficult economic
times. 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 2022 of GBP0.42 per ordinary
share was paid to shareholders on 7 July 2023.
J.J. Murray
Chairman
22 September 2023
Consolidated income statement
for the six months ended 30 June 2023
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
Note GBP'000 GBP'000 GBP'000
----------------------------------- ---- ---------- ---------- -----------
Revenue 108,845 88,613 188,898
Cost of sales (29,452) (23,380) (49,748)
----------------------------------- ---- ---------- ---------- -----------
Gross profit 79,393 65,233 139,150
Distribution costs (41,304) (33,937) (70,565)
Administrative expenses (24,357) (20,394) (41,420)
----------------------------------- ---- ---------- ---------- -----------
Operating profit 13,732 10,902 27,165
----------------------------------- ---- ---------- ---------- -----------
EBITDA* 19,009 15,742 37,269
Depreciation and amortisation (5,277) (4,840) (10,104)
----------------------------------- ---- ---------- ---------- -----------
Operating profit 13,732 10,902 27,165
----------------------------------- ---- ---------- ---------- -----------
Finance income 5 1 31
Finance costs (110) (100) (242)
----------------------------------- ---- ---------- ---------- -----------
Finance costs - net (105) (99) (211)
----------------------------------- ---- ---------- ---------- -----------
Profit before income tax 13,627 10,803 26,954
Income tax expense (3,692) (2,423) (6,742)
----------------------------------- ---- ---------- ---------- -----------
Profit for the period 9,935 8,380 20,212
----------------------------------- ---- ---------- ---------- -----------
Profit is attributable to:
Equity shareholders of the Company 9,935 8,374 20,203
Non-controlling interest - 6 9
----------------------------------- ---- ---------- ---------- -----------
9,935 8,380 20,212
----------------------------------- ---- ---------- ---------- -----------
Earnings per share
Basic and diluted 3 81.0p 68.3p 164.8p
Dividends
Dividends paid per share Nil Nil 84p
----------------------------------- ---- ---------- ---------- -----------
* 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 2023
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ---------- ---------- -----------
Profit for the financial period 9,935 8,380 20,203
--------------------------------------------------------- ---------- ---------- -----------
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 (2,851) 1,087 3,602
- actuarial gain recognised in the Nu-Swift pension
scheme - - (111)
- movement on deferred tax relating to the Nu-Swift
pension scheme - - 38
- actuarial loss recognised in the Ansul pension scheme - - 1,249
- movement on deferred tax relating to the Ansul pension
scheme - - (285)
--------------------------------------------------------- ---------- ---------- -----------
Other comprehensive income for the period, net of tax (2,851) 1,087 4,493
--------------------------------------------------------- ---------- ---------- -----------
Equity shareholders of the Company 7,084 9,467 24,696
--------------------------------------------------------- ---------- ---------- -----------
Non-controlling interest - - 9
--------------------------------------------------------- ---------- ---------- -----------
Total comprehensive income for the period 7,084 9,467 24,705
--------------------------------------------------------- ---------- ---------- -----------
Consolidated statement of changes in equity
for the six months ended 30 June 2023
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 2022 123 344 1 2,033 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 2,033 6,143 132,446 124 141,214
----------------------------- ------- ------- ---------- ------- ------- -------- --------------- --------
Comprehensive income
for the period:
- profit for the period - - - - - 11,829 3 11,832
- exchange adjustments - - - - 2,515 - - 2,515
- actuarial gain on pension
schemes - - - - - 1,138 - 1,138
- movement on deferred
tax relating to pension
schemes - - - - - (247) - (247)
----------------------------- ------- ------- ---------- ------- ------- -------- --------------- --------
Total comprehensive income
for the period - - - - 2,515 12,720 3 15,238
----------------------------- ------- ------- ---------- ------- ------- -------- --------------- --------
Contributions by and
distributions to owners
of the Company:
- dividends - - - - - (10,298) - (10,298)
----------------------------- ------- ------- ---------- ------- ------- -------- --------------- --------
Purchase of own shares - - - - - (13) - (13)
----------------------------- ------- ------- ---------- ------- ------- -------- --------------- --------
Reduction in non-controlling
interest - - - - - (158) (127) (285)
----------------------------- ------- ------- ---------- ------- ------- -------- --------------- --------
At 31 December 2022 123 344 1 2,033 8,658 134,697 - 145,856
----------------------------- ------- ------- ---------- ------- ------- -------- --------------- --------
Comprehensive income
for the period:
- profit for the period - - - - - 9,935 - 9,935
- exchange adjustments - - - - (2,851) - - (2,851)
----------------------------- ------- ------- ---------- ------- ------- -------- --------------- --------
Total comprehensive income
for the period - - - - (2,851) 9,935 - 7,084
----------------------------- ------- ------- ---------- ------- ------- -------- --------------- --------
Purchase of own shares - - - - - (30) - (30)
----------------------------- ------- ------- ---------- ------- ------- -------- --------------- --------
At 30 June 2023 123 344 1 2,033 5,807 144,602 - 152,910
----------------------------- ------- ------- ---------- ------- ------- -------- --------------- --------
Consolidated statement of financial position
as at 30 June 2023
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
---------------------------------------------------- --------- --------- -----------
Assets
Non-current assets
Property, plant and equipment 16,430 14,186 14,940
Right-of-use assets 5,531 5,297 5,975
Intangible assets 77,848 73,643 77,076
Deferred tax asset654 654 814 694
Retirement benefit surplus 276 380 276
---------------------------------------------------- --------- --------- -----------
100,739 94,320 98,961
---------------------------------------------------- --------- --------- -----------
Current assets
Inventories 22,934 18,326 22,260
Trade and other receivables 43,907 37,800 40,699
Cash and cash equivalents 33,206 35,256 33,962
---------------------------------------------------- --------- --------- -----------
100,047 91,382 96,921
---------------------------------------------------- --------- --------- -----------
Total assets 200,786 185,702 195,882
---------------------------------------------------- --------- --------- -----------
Liabilities
Current liabilities
Trade and other payables (35,902) (30,336) (36,431)
Income tax liabilities (1,448) (564) (1,440)
Borrowings (344) (2,437) (1,598)
Lease liabilities (1,228) (1,722) (2,040)
Derivative financial instruments - (20) -
Provision for liabilities and charges (9) (14) (10)
---------------------------------------------------- --------- --------- -----------
(38,931) (35,093) (41,519)
---------------------------------------------------- --------- --------- -----------
Non-current liabilities
Trade and other payables (1,016) (1,033) (936)
Borrowings (228) (431) (236)
Lease liabilities (4,417) (3,627) (4,033)
Deferred income tax liabilities (2,213) (1,982) (2,211)
Retirement benefit obligations (921) (2,180) (953)
Provision for liabilities and charges (150) (142) (138)
---------------------------------------------------- --------- --------- -----------
(8,945) (9,395) (8,507)
---------------------------------------------------- --------- --------- -----------
Total liabilities (47,876) (44,488) (50,026)
---------------------------------------------------- --------- --------- -----------
Net assets 152,910 141,214 145,856
---------------------------------------------------- --------- --------- -----------
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 5,807 6,143 8,658
Retained earnings 144,602 132,446 134,697
---------------------------------------------------- --------- --------- -----------
Equity attributable to owners of the Parent Company 152,910 141,090 145,856
Non-controlling interest - 124 -
---------------------------------------------------- --------- --------- -----------
Total equity 152,910 141,214 145,856
---------------------------------------------------- --------- --------- -----------
Consolidated statement of cash flow
for the six months ended 30 June 2023
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ---------- ---------- -----------
Cash flows from operating activities
Cash generated from operations 14,608 13,501 30,489
Interest paid (39) (50) (111)
Income tax paid (4,737) (5,617) (7,055)
--------------------------------------------------------- ---------- ---------- -----------
Net cash generated from operating activities 9,832 7,834 23,323
--------------------------------------------------------- ---------- ---------- -----------
Cash flows from investing activities
Acquisition of subsidiary undertakings (2,522) (3,058) (4,078)
Purchases of property, plant and equipment (4,164) (1,923) (4,626)
Proceeds from sale of property, plant and equipment 273 380 730
Purchases of intangible assets (902) (1,661) (3,193)
Interest received 5 1 4
--------------------------------------------------------- ---------- ---------- -----------
Net cash used in investing activities (7,310) (6,261) (11,163)
--------------------------------------------------------- ---------- ---------- -----------
Cash flows from financing activities
Repayments of borrowings (1,173) (1,332) (2,312)
Payment of lease liabilities (1,250) (1,057) (2,356)
Dividends paid to Company's shareholders - - (10,298)
Purchase of own shares (30) - (13)
Reduction in non-controlling interest - - (285)
--------------------------------------------------------- ---------- ---------- -----------
Net cash used in financing activities (2453) (2,389) (15,264)
--------------------------------------------------------- ---------- ---------- -----------
Net (decrease)/increase in cash in the period 69 (816) (3,104)
Cash and cash equivalents at the beginning of the period 33,962 35,681 35,681
Effects of exchange rates on cash and cash equivalents (825) 391 1,385
--------------------------------------------------------- ---------- ---------- -----------
Cash and cash equivalents at the end of the period 33,206 35,256 33,962
--------------------------------------------------------- ---------- ---------- -----------
Notes to the financial statements
for the six months ended 30 June 2023
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 2023 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 2022. 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 2022 have
been extracted from the statutory accounts for the year ended 31
December 2022, 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 GBP9,935,000
(2022: GBP8,374,000) and on 12,260,684 (2022: 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
2023 2022 2022
GBP'000 GBP'000 GBP'000
--------------------------------------------- ---------- ---------- -----------
Profit on ordinary activities after taxation 9,935 8,374 20,212
--------------------------------------------- ---------- ---------- -----------
Basic earnings per ordinary share 81.0p 68.3p 164.8p
--------------------------------------------- ---------- ---------- -----------
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 2023. In accordance with IAS 19 such a
valuation will be prepared for the purposes of the Group's Annual
Report and Accounts 2023.
The person responsible for arranging the release of this
announcement on behalf of the Company is Richard Pollard, Company
Secretary of 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 amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
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 PPUGWBUPWGAG
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