TIDMLSC
RNS Number : 0254M
London Security PLC
12 September 2019
London Security PLC
(the "Group")
Interim results for six months ended 30 June 2019
Chairman's statement
J.G. Murray, Chairman
Financial highlights
-- Revenue GBP71.7m (2018: GBP66.7m)
-- Operating profit GBP10.5m (2018: GBP10.1m)
-- Earnings per share 57.9p (2018: 56.2p)
TRADING
The financial highlights illustrate that the Group's revenue
increased by GBP5.0 million (7.5%) to GBP71.7 million. The movement
in exchange rates had an adverse effect of GBP0.5 million on
reported turnover. The underlying revenue increase can largely be
attributed to business acquisitions and improvements in the
scheduling of service work
Operating profit increased by GBP0.4 million (4.0%) to GBP10.5
million. This increase in operating profit is again primarily
caused by business acquisitions and improved service
scheduling.
ACQUISITIONS
In the six months to the end of June, the Group has acquired a
total of ten well established businesses at a cost of GBP3.0
million (2018: three businesses at a cost of GBP1.9 million). The
integration of these businesses into the Group has, so far, been
successful and results are in line with expectations. 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.
FINANCING
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.
IFRS 16 "Leases" was applicable from 1 January 2019. The
application of the standard has resulted in the recognition of
additional right-of-use assets and lease liabilities which have
been disclosed separately in the Statement of Financial Position.
The standard is discussed further in note 2, Basis of preparation.
The impact on the Income Statement was not material.
PROSPECTS
The fire security market is experiencing increased competition
and downward pressure on prices. Our strategy is to continue to
concentrate on the highest levels of customer service to mitigate
this. We do not expect the economic environment to become any
easier in 2019. Nonetheless your Group remains in a strong position
and will continue to focus on meeting the needs of our customers
and our shareholders.
DIVIDS
A final dividend in respect of 2018 of GBP0.40 per ordinary
share was paid to shareholders on 5 July 2019.
J.G. Murray
Chairman
12 September 2019
Consolidated income statement
for the six months ended 30 June 2019
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2019 2018 2018
Note GBP'000 GBP'000 GBP'000
----------------------------------- ---- ---------- ---------- -----------
Revenue 71,737 66,726 137,711
Cost of sales (17,932) (15,402) (31,780)
----------------------------------- ---- ---------- ---------- -----------
Gross profit 53,805 51,324 105,931
Distribution costs (26,253) (25,215) (50,593)
Administrative expenses (17,025) (15,969) (32,163)
----------------------------------- ---- ---------- ---------- -----------
Operating profit 10,527 10,140 23,175
----------------------------------- ---- ---------- ---------- -----------
EBITDA* 14,474 13,313 29,557
Depreciation and amortisation (3,947) (3,173) (6,382)
----------------------------------- ---- ---------- ---------- -----------
Operating profit 10,527 10,140 23,175
----------------------------------- ---- ---------- ---------- -----------
Finance income 23 28 131
Finance costs (121) (97) (171)
----------------------------------- ---- ---------- ---------- -----------
Finance costs - net (98) (69) (40)
----------------------------------- ---- ---------- ---------- -----------
Profit before income tax 10,429 10,071 23,135
Income tax expense (3,237) (3,133) (6,945)
----------------------------------- ---- ---------- ---------- -----------
Profit for the period 7,192 6,938 16,190
----------------------------------- ---- ---------- ---------- -----------
Profit is attributable to
Equity shareholders of the Company 7,103 6,891 16,077
Non-controlling interest 89 47 113
----------------------------------- ---- ---------- ---------- -----------
7,192 6,938 16,190
----------------------------------- ---- ---------- ---------- -----------
Earnings per share
Basic and diluted 3 57.9p 56.2p 131.1p
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 2019
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2019 2018 2018
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ---------- ---------- -----------
Profit for the financial period 7,192 6,938 16,190
--------------------------------------------------------- ---------- ---------- -----------
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 47 (418) 361
- actuarial gain recognised in the Nu-Swift pension
scheme - - 16
- movement on deferred tax relating to the Nu-Swift
pension scheme - - (6)
- actuarial loss recognised in the Ansul pension scheme - - (145)
- movement on deferred tax relating to the Ansul pension
scheme - - 36
--------------------------------------------------------- ---------- ---------- -----------
Other comprehensive income for the period, net of tax 47 (418) 262
--------------------------------------------------------- ---------- ---------- -----------
Total comprehensive income for the period 7,239 6,520 16,452
--------------------------------------------------------- ---------- ---------- -----------
Consolidated statement of changes in equity
for the six months ended 30 June 2019
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 2018 123 344 1 2,033 8,470 92,408 189 103,568
---------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Comprehensive income for the
period:
- profit for the period - - - - - 6,891 47 6,938
- exchange adjustments - - - - (418) - - (418)
---------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Total comprehensive income for
the period - - - - (418) 6,891 47 6,520
---------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
At 30 June 2018 123 344 1 2,033 8,052 99,299 236 110,088
---------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Comprehensive income for the
period:
- profit for the period - - - - - 9,186 66 9,252
- exchange adjustments - - - - 779 - - 779
- actuarial loss on pension
schemes - - - - - (129) - (129)
- movement on deferred tax
relating
to pension schemes - - - - - 30 - 30
---------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Total comprehensive income for
the period - - - - 779 9,087 66 9,932
---------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Contributions by and distributions
to owners of the Company:
- dividends - - - - - (9,809) - (9,809)
---------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Total contributions to owners of
the Company - - - - - (9,809) - (9,809)
---------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
At 31 December 2018 123 344 1 2,033 8,831 98,577 302 110,211
---------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Comprehensive income for the
period:
- profit for the period - - - - - 7,103 89 7,192
- distribution to non-controlling
interest - - - - - - (23) (23)
- exchange adjustments - - - - 47 - - 47
---------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Total comprehensive income for
the period - - - - 47 7,103 66 7,216
---------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
At 30 June 2019 123 344 1 2,033 8,878 105,680 368 117,427
---------------------------------- ------- ------- ---------- ------- ------- -------- --------------- -------
Consolidated statement of financial position
as at 30 June 2019
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2019 2018 2018
GBP'000 GBP'000 GBP'000
---------------------------------------------------- --------- --------- -----------
Assets
Non-current assets
Property, plant and equipment 12,921 11,732 12,077
Right of use assets 2,752 - -
Intangible assets 65,166 61,698 63,695
Deferred tax asset 807 589 811
Retirement benefit surplus 4,430 4,397 4,430
---------------------------------------------------- --------- --------- -----------
86,076 78,416 81,013
---------------------------------------------------- --------- --------- -----------
Current assets
Inventories 14,613 12,437 13,293
Trade and other receivables 29,129 27,725 28,732
Cash and cash equivalents 28,869 29,256 26,110
---------------------------------------------------- --------- --------- -----------
72,611 69,418 68,135
---------------------------------------------------- --------- --------- -----------
Total assets 158,687 147,834 149,148
---------------------------------------------------- --------- --------- -----------
Liabilities
Current liabilities
Trade and other payables (23,808) (21,503) (22,713)
Income tax liabilities (1,145) (917) (1,731)
Borrowings (2,125) (2,100) (2,125)
Lease liabilities (1,239) - -
Derivative financial instruments - - -
Provision for liabilities and charges (5) - (5)
---------------------------------------------------- --------- --------- -----------
(28,322) (24,520) (26,574)
---------------------------------------------------- --------- --------- -----------
Non-current liabilities
Trade and other payables (1,026) (995) (922)
Borrowings (6,379) (8,404) (7,441)
Lease liabilities (1,535) - -
Derivative financial instruments (54) (34) (41)
Deferred income tax liabilities (1,875) (1,886) (1,898)
Retirement benefit obligations (1,880) (1,705) (1,880)
Provision for liabilities and charges (189) (202) (181)
---------------------------------------------------- --------- --------- -----------
(12,938) (13,226) (12,363)
---------------------------------------------------- --------- --------- -----------
Total liabilities (41,260) (37,746) (38,937)
---------------------------------------------------- --------- --------- -----------
Net assets 117,427 110,088 110,211
---------------------------------------------------- --------- --------- -----------
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 8,878 8,052 8,831
Retained earnings 105,680 99,299 98,577
---------------------------------------------------- --------- --------- -----------
Equity attributable to owners of the Parent Company 117,059 109,852 109,909
Non-controlling interest 368 236 302
---------------------------------------------------- --------- --------- -----------
Total equity 117,427 110,088 110,211
---------------------------------------------------- --------- --------- -----------
Consolidated statement of cash flow
for the six months ended 30 June 2019
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2019 2018 2018
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ---------- ---------- -----------
Cash flows from operating activities
Cash generated from operations 13,953 13,156 28,385
Interest paid (74) (97) (147)
Income tax paid (4,414) (4,374) (7,393)
--------------------------------------------------------- ---------- ---------- -----------
Net cash generated from operating activities 9,465 8,685 20,845
--------------------------------------------------------- ---------- ---------- -----------
Cash flows from investing activities
Acquisition of subsidiary undertakings (1,007) (1,537) (4,274)
Purchases of property, plant and equipment (2,536) (1,898) (3,551)
Proceeds from sale of property, plant and equipment 109 114 398
Recognition of right-of-use assets (3,542) - -
Purchases of intangible assets (2,001) (115) (746)
Proceeds from sale of intangible assets - 20 -
Interest received 23 8 12
--------------------------------------------------------- ---------- ---------- -----------
Net cash used in investing activities (8,954) (3,408) (8,161)
--------------------------------------------------------- ---------- ---------- -----------
Cash flows from financing activities
Repayments of borrowings (1,040) (557) (1,614)
Payment of lease liabilities (831) - -
New lease liabilities 3,542 - -
Dividends paid to Company's shareholders - - (9,809)
Distribution to non-controlling interest (23) - -
--------------------------------------------------------- ---------- ---------- -----------
Net cash used in financing activities 1,648 (557) (11,423)
--------------------------------------------------------- ---------- ---------- -----------
Effects of exchange rates on cash and cash equivalents 600 (116) 197
--------------------------------------------------------- ---------- ---------- -----------
Net increase in cash in the period 2,759 4,604 1,458
Cash and cash equivalents at the beginning of the period 26,110 24,652 24,652
--------------------------------------------------------- ---------- ---------- -----------
Cash and cash equivalents at the end of the period 28,869 29,256 26,110
--------------------------------------------------------- ---------- ---------- -----------
Notes to the financial statements
for the six months ended 30 June 2019
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 2019 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 2018. 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 2018 have
been extracted from the statutory accounts for the year ended 31
December 2018, 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.
IFRS 16 "Leases" was issued in January 2016 with an effective
date of 1 January 2019. The standard specifies how leases are
recognised, presented, measured and disclosed. The majority of the
Group's lease commitments have been brought onto the balance sheet
together with corresponding right of use assets. In the Income
Statement, the existing operating lease charge, which is recognised
within operating profit, has been replaced by a depreciation charge
in respect of the right of use asset. In addition there is an
interest cost in relation to the lease liability which is
recognised within finance costs.
The Group has applied IFRS 16 using the modified retrospective
approach and therefore the comparative information has not been
restated and continues to be reported under IAS 17.
3 Earnings per share
The calculation of basic earnings per ordinary share is based on
the profit on ordinary activities after taxation of GBP7,103,000
(2018: GBP6,891,000) and on 12,261,477 (2018: 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
2019 2018 2018
GBP'000 GBP'000 GBP'000
--------------------------------------------- ---------- ---------- -----------
Profit on ordinary activities after taxation 7,103 6,891 16,077
--------------------------------------------- ---------- ---------- -----------
Basic earnings per ordinary share 57.9p 56.2p 131.1p
--------------------------------------------- ---------- ---------- -----------
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 2019. In accordance with IAS 19 such a
valuation will be prepared for the purposes of the Group's Annual
Report and Accounts 2019.
For further information, please contact:
London Security plc
Richard Pollard
Company Secretary Tel : 01422 372852
WH Ireland Limited
Chris Fielding Tel : 0207 220 1666
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR GGURABUPBGCG
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