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 £88.6m (2021: £82.7m)

•     Operating profit £10.9m (2021: £12.3m)

•     Earnings per share 68.3p (2021: 75.6p)

 

Trading

The financial highlights illustrate that the Group's revenue increased by £5.9 million (7.1%) to £88.6 million.

Operating profit decreased by £1.4 million (11.4%) to £10.9 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 £35.3 million. This is a decrease of £0.4 million on the 31 December 2021 balance of £35.7 million.

In May 2018 the Group entered into a five year multi-currency facility until 2023 comprising £3.15 million and €8.40 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 £0.42 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

£'000

£'000

£'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

 

£'000

£'000

£'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

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'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

 

£'000

£'000

£'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

 

£'000

£'000

£'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 £8,374,000 (2021: £9,267,000) 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

 

£'000

£'000

£'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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