TIDMLSC
RNS Number : 9415Y
London Security PLC
15 September 2020
London Security PLC
(the "Group" or "Company")
Interim results for the six months ended 30 June 2020
Chairman's statement
J.G. Murray, Chairman
Financial highlights
-- Revenue GBP67.2m (2019: GBP71.7m)
-- Operating profit GBP7.6m (2019: GBP10.5m)
-- Earnings per share 39.9p (2019: 57.9p)
TRADING
The financial highlights illustrate that the Group's revenue
decreased by GBP4.5 million (6.3%) to GBP67.2 million
Operating profit decreased by GBP2.9 million (27.6%) to GBP7.6
million.
The period under review reflects the impact from the coronavirus
outbreak, which has significantly impacted all the countries in
which we operate. Although there has been some return to normality
in our business some customers remain closed and there are still
restrictions on our operations. We must be prepared for further
disruption should a second wave materialise in any of the countries
in which we operate.
ACQUISITIONS
In the six months to the end of June, the Group has made no
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 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 2020 was GBP34.4 million.
This is an increase of GBP7.3 million on the 31 December 2019
balance of GBP27.1 million
In May 2018 the Group entered into a new 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. Debt recovery remains consistent with previous years
and staff costs will be controlled using the furlough process where
applicable. The Board therefore considers that its strong balance
sheet and material net cash position means that it is well placed
to navigate through the impact of the coronavirus outbreak.
DIVIDS
A final dividend in respect of 2019 of GBP0.20 per ordinary
share was paid to shareholders on 10 July 2020.
J.G. Murray
Chairman
15 September 2020
Consolidated income statement
for the six months ended 30 June 2020
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2020 2019 2019
Note GBP'000 GBP'000 GBP'000
----------------------------------- ---- ---------- ---------- -----------
Revenue 67,164 71,737 146,920
Cost of sales (16,452) (17,932) (36,293)
----------------------------------- ---- ---------- ---------- -----------
Gross profit 50,712 53,805 110,627
Distribution costs (26,310) (26,253) (54,140)
Administrative expenses (16,768) (17,025) (32,333)
----------------------------------- ---- ---------- ---------- -----------
Operating profit 7,634 10,527 24,154
----------------------------------- ---- ---------- ---------- -----------
EBITDA* 11,951 14,474 32,503
Depreciation and amortisation (4,317) (3,947) (8,349)
----------------------------------- ---- ---------- ---------- -----------
Operating profit 7,634 10,527 24,154
----------------------------------- ---- ---------- ---------- -----------
Finance income 21 23 142
Finance costs (96) (121) (254)
----------------------------------- ---- ---------- ---------- -----------
Finance costs - net (75) (98) (112)
----------------------------------- ---- ---------- ---------- -----------
Profit before income tax 7,559 10,429 24,042
Income tax expense (2,602) (3,237) (7,229)
----------------------------------- ---- ---------- ---------- -----------
Profit for the period 4,957 7,192 16,813
----------------------------------- ---- ---------- ---------- -----------
Profit is attributable to
Equity shareholders of the Company 4,895 7,103 16,653
Non-controlling interest 62 89 160
----------------------------------- ---- ---------- ---------- -----------
4,957 7,192 16,813
----------------------------------- ---- ---------- ---------- -----------
Earnings per share
Basic and diluted 3 39.9p 57.9p 135.8p
Dividends
Dividends paid per share Nil Nil 80.0p
----------------------------------- ---- ---------- ---------- -----------
* 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 2020
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ---------- ---------- -----------
Profit for the financial period 4,957 7,192 16,813
--------------------------------------------------------- ---------- ---------- -----------
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 3,196 47 (2,389)
- actuarial gain recognised in the Nu-Swift pension
scheme - - 414
- movement on deferred tax relating to the Nu-Swift
pension scheme - - (145)
- actuarial loss recognised in the Ansul pension scheme - - (412)
- movement on deferred tax relating to the Ansul pension
scheme - - 103
--------------------------------------------------------- ---------- ---------- -----------
Other comprehensive income for the period, net of tax 3,196 47 (2,429)
--------------------------------------------------------- ---------- ---------- -----------
Total comprehensive income for the period 8,153 7,239 14,384
--------------------------------------------------------- ---------- ---------- -----------
Consolidated statement of changes in equity
for the six months ended 30 June 2020
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 2019 123 344 1 2,033 8,831 100,078 302 111,712
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Comprehensive income
for the period:
- profit for the period - - - - - 7,103 89 7,192
- exchange adjustments - - - - 47 - - 47
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Total comprehensive income
for the period - - - - 47 7,103 89 7,239
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Distribution to non-controlling
interest - - - - - - (23) (23)
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
At 30 June 2019 123 344 1 2,033 8,878 107,181 368 118,928
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Comprehensive income
for the period:
- profit for the period - - - - - 9,550 71 9,621
- exchange adjustments - - - - (2,436) - - (2,436)
- actuarial gain on pension
schemes - - - - 2 - 2
* movement on deferred tax relating to pension schemes - - - - - (42) - (42)
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Total comprehensive income
for the period - - - - (2,436) 9,510 71 7,145
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Contributions by and
distributions to owners
of the Company:
- dividends - - - - - (9,809) - (9,809)
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Distribution to non-controlling
interest - - - - - - (90) (90)
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
At 31 December 2019 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
----------------------------------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Consolidated statement of financial position
as at 30 June 2020
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
---------------------------------------------------- --------- --------- -----------
Assets
Non-current assets
Property, plant and equipment 13,308 12,921 12,164
Right-of-use assets 2,382 2,752 2,360
Intangible assets 67,502 67,548 67,504
Deferred tax asset 779 807 683
Retirement benefit surplus 4,959 4,430 4,959
---------------------------------------------------- --------- --------- -----------
88,930 88,458 87,670
---------------------------------------------------- --------- --------- -----------
Current assets
Inventories 15,182 14,613 13,434
Trade and other receivables 32,499 29,129 27,822
Cash and cash equivalents 34,422 28,869 27,143
---------------------------------------------------- --------- --------- -----------
82,103 72,611 68,399
---------------------------------------------------- --------- --------- -----------
Total assets 171,033 161,069 156,069
---------------------------------------------------- --------- --------- -----------
Liabilities
Current liabilities
Trade and other payables (29,119) (23,808) (23,158)
Income tax liabilities (2,311) (1,145) (987)
Borrowings (2,139) (2,125) (2,048)
Lease liabilities (1,169) (1,239) (1,134)
Provision for liabilities and charges - (5) -
---------------------------------------------------- --------- --------- -----------
(34,738) (28,322) (27,327)
---------------------------------------------------- --------- --------- -----------
Non-current liabilities
Trade and other payables (1,275) (1,026) (850)
Borrowings (4,270) (6,379) (5,122)
Lease liabilities (1,209) (1,535) (1,256)
Derivative financial instruments (43) (54) (47)
Deferred income tax liabilities (2,873) (2,756) (2,909)
Retirement benefit obligations (2,282) (1,880) (2,215)
Provision for liabilities and charges (175) (189) (169)
---------------------------------------------------- --------- --------- -----------
(12,127) (13,819) (12,568)
---------------------------------------------------- --------- --------- -----------
Total liabilities (46,865) (42,141) (39,895)
---------------------------------------------------- --------- --------- -----------
Net assets 124,168 118,928 116,174
---------------------------------------------------- --------- --------- -----------
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 9,638 8,878 6,442
Retained earnings 111,777 107,181 106,882
---------------------------------------------------- --------- --------- -----------
Equity attributable to owners of the Parent Company 123,916 118,560 115,825
Non-controlling interest 252 368 349
---------------------------------------------------- --------- --------- -----------
Total equity 124,168 118,928 116,174
---------------------------------------------------- --------- --------- -----------
Consolidated statement of cash flow
for the six months ended 30 June 2020
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ---------- ---------- -----------
Cash flows from operating activities
Cash generated from operations 12,319 13,953 32,363
Interest paid (66) (74) (160)
Income tax paid (2,323) (4,414) (7,639)
--------------------------------------------------------- ---------- ---------- -----------
Net cash generated from operating activities 9,930 9,465 24,564
--------------------------------------------------------- ---------- ---------- -----------
Cash flows from investing activities
Acquisition of subsidiary undertakings - (1,007) (2,264)
Purchases of property, plant and equipment (2,344) (2,536) (3,974)
Proceeds from sale of property, plant and equipment 137 109 329
Purchases of intangible assets (969) (2,001) (2,068)
Interest received 17 23 27
--------------------------------------------------------- ---------- ---------- -----------
Net cash used in investing activities (3,159) (5,412) (7,950)
--------------------------------------------------------- ---------- ---------- -----------
Cash flows from financing activities
Repayments of borrowings (1,015) (1,040) (2,091)
Payment of lease liabilities (987) (831) (1,750)
Dividends paid to Company's shareholders - - (9,809)
Distribution to non-controlling interest (159) (23) (113)
--------------------------------------------------------- ---------- ---------- -----------
Net cash used in financing activities (2,161) (1,894) (13,763)
--------------------------------------------------------- ---------- ---------- -----------
Effects of exchange rates on cash and cash equivalents 2,669 600 (1,818)
--------------------------------------------------------- ---------- ---------- -----------
Net increase in cash in the period 7,279 2,759 1,033
Cash and cash equivalents at the beginning of the period 27,143 26,110 26,110
--------------------------------------------------------- ---------- ---------- -----------
Cash and cash equivalents at the end of the period 34,422 28,869 27,143
--------------------------------------------------------- ---------- ---------- -----------
Notes to the financial statements
for the six months ended 30 June 2020
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 2020 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 2019. 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 2019 have
been extracted from the statutory accounts for the year ended 31
December 2019, 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 GBP4,895,000
(2019: GBP7,103,000) and on 12,261,477 (2019: 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
2020 2019 2019
GBP'000 GBP'000 GBP'000
--------------------------------------------- ---------- ---------- -----------
Profit on ordinary activities after taxation 4,895 7,103 16,653
--------------------------------------------- ---------- ---------- -----------
Basic earnings per ordinary share 39.9p 57.9p 135.8p
--------------------------------------------- ---------- ---------- -----------
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 2020. In accordance with IAS 19 such a
valuation will be prepared for the purposes of the Group's Annual
Report and Accounts 2020.
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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