RNS Number : 5353O
London Security PLC
15 May 2024
 

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. 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 2023

 

Chairman's statement

J.J. Murray, Chairman

 

Financial Highlights

Financial highlights of the audited results for the year ended 31 December 2023 compared with the year ended 31 December 2022 are as follows:

•     revenue of £219.7 million (2022: £188.9 million);

•     operating profit of £31.6 million (2022: £27.2 million);

•     profit for the year of £23.3 million (2022: £20.2 million);

•     cash of £32.7 million (2022: £34.0 million);

•     earnings per share for the year of £1.90 (2022: £1.65); and

•     a dividend per share of £1.24 (2022: £0.84).

Trading review

The financial highlights illustrate that the Group's revenue increased by £30.8 million (16.3%) to £219.7 million and operating profit increased by £4.4 million (16.2%) to £31.6 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 2023 and the full year's trading of acquisitions in 2022;

•     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 a positive effect of £3.0 million on reported revenue and £0.5 million on operating profit. A more detailed review of this year's performance is given in the Financial Review and the Strategic Report.

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 two security businesses in Belgium.  The Group has also continued with the acquisition of service contracts from smaller well-established businesses for integration into the Group's existing subsidiaries and has grown its presence in Austria, the Netherlands, the United Kingdom and Germany.

Management and staff

2023 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.

Jacques Gaston Murray

Mr. Murray sadly passed away on 7 June 2023. Mr. Murray was appointed to the Board in January 2000, following his acquisition of a controlling interest in the Company, and he has had a prominent role in guiding the Company's successful performance and strategy since that time. The Board would like to place on record its immense appreciation for the many years of service that Mr. Murray dedicated to the Company.

Dividends

An exceptional one-off interim dividend in respect of 2023 of £0.82 per ordinary share was paid to shareholders on 7 December 2023. The Board is recommending the payment of a final dividend in respect of 2023 at the same level as 2022 of £0.42 per ordinary share. This would be paid on 12 July 2024 to shareholders on the register on 14 June 2024 with the shares marked ex-dividend on 13 June 2024.

Future prospects

The markets in which we operate are entering what is likely to be a period of low growth albeit with declining inflation from high levels in 2023. 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 25 June 2024 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-J. Murray

Chairman

14 May 2024

 



 


Consolidated income statement

for the year ended 31 December 2023

 

 




2023

2022


 

Note

£'000

£'000


Revenue


219,705

188,898


Cost of sales

 

(58,988)

(49,748)


Gross profit


160,717

139,150


Distribution costs


(81,373)

(70,565)


Administrative expenses

 

(47,762)

(41,420)

 

Operating profit

 

31,582

27,165


EBITDA*


42,660

37,269

 

Depreciation and amortisation

 

(11,078)

(10,104)

 

Operating profit

 

31,582

27,165


Finance income


226

31


Finance costs

 

(264)

(242)


Finance costs - net

 

(38)

(211)


Profit before income tax


31,544

26,954


Income tax expense

 

(8,280)

(6,729)


Profit for the year

 

23,264

20,225


Profit is attributable to:





Equity shareholders of the Company


23,264

20,216


Non-controlling interest

 

-

9


 

 

23,264

20,225


Earnings per share





Basic and diluted

1

189.8p

164.9p

 

*     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 2023

 



2023

2022

 

 

£'000

£'000

Profit for the financial year

 

23,264

20,216

Other comprehensive (expense)/income:




Items that may be reclassified subsequently to profit or loss:




- currency translation differences on foreign currency net investments


(1,579)

3,602

Items that will not be reclassified subsequently to profit or loss:




- actuarial gain/(loss) recognised in the Nu-Swift Pension Scheme


52

(111)

- movement on deferred tax relating to the Nu-Swift Pension Scheme surplus


(18)

38

- actuarial (loss)/gain recognised in the Ansul Pension Scheme


(171)

1,249

- movement on deferred tax relating to the Ansul Pension Scheme deficit

 

43

(285)

Other comprehensive expense for the year, net of tax

 

(1,673)

4,493

Equity shareholders of the Company


21,591

24,709

Non-controlling interest

 

-

9

Total comprehensive income for the year

 

21,591

24,718

 



 

Consolidated statement of changes in equity

for the year ended 31 December 2023

 




Capital







Ordinary

Share

redemption

Merger

Other

Retained

Non-controlling

Total


shares

premium

reserve

reserve

reserves

earnings

interest

equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2022 as previously presented

123

344

1

2,033

5,056

124,072

118

131,747

Impact of IAS 12 amendment

-

-

-

-

-

12

-

12

At 1 January 2022 as restated

123

344

1

2,033

5,056

124,084

118

131,759

Total comprehensive income for the year









Profit for the financial year

-

-

-

-

-

20,216

9

20,225

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

21,107

9

24,718

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 and 1 January 2023

123

344

1

2,033

8,658

134,722

-

145,881

Total comprehensive income for the year









Profit for the financial year

-

-

-

-

-

23,264

-

23,264

Other comprehensive income:









- exchange adjustments

-

-

-

-

(1,579)

-

-

(1,579)

- actuarial loss on pension schemes

-

-

-

-

-

(119)

-

(119)

- net movement on deferred tax relating to pension schemes

-

-

-

-

-

25

-

25

Total comprehensive income for the year

-

-

-

-

(1,579)

23,170

-

21,591

Contributions by and distributions to owners of the Company:









- purchase of own shares

-

-

-

-

-

(33)

-

(33)

- dividends

-

-

-

-

-

(15,196)

-

(15,196)

 

-

-

-

-

-

(15,229)

-

(15,229)

At 31 December 2023

123

344

1

2,033

7,079

142,663

-

152,243

 

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 2023

 

 

 



2023

2022

 

 

£'000

£'000

Assets




Non-current assets




Property, plant and equipment


17,749

14,940

Right of use assets


6,549

5,975

Intangible assets


77,382

77,076

Deferred tax asset


749

719

Retirement benefit surplus

 

342

276

 

 

102,771

98,986

Current assets




Inventories


22,143

22,260

Trade and other receivables


44,488

40,699

Cash and cash equivalents

 

32,737

33,962

 

 

99,368

96,921

Total assets

 

202,139

195,907

Liabilities




Current liabilities




Trade and other payables


(36,403)

(36,431)

Income tax liabilities


(2,275)

(1,440)

Borrowings


(381)

(1,598)

Lease liabilities


(2,274)

(2,040)

Provision

 

(6)

(10)

 

 

(41,339)

(41,519)

Non-current liabilities




Trade and other payables


(1,090)

(936)

Borrowings


(97)

(236)

Lease liabilities


(4,402)

(4,033)

Derivative financial instruments


-

-

Deferred tax liabilities


(1,811)

(2,211)

Retirement benefit obligations


(1,021)

(953)

Provision

 

(136)

(138)

 

 

(8,557)

(8,507)

Total liabilities

 

(49,896)

(50,026)

Net assets

 

152,243

145,881

Shareholders' equity




Ordinary shares


123

123

Share premium


344

344

Capital redemption reserve


1

1

Merger reserve


2,033

2,033

Other reserves


7,079

8,658

Retained earnings

 

142,663

134,722

Total equity

 

152,243

145,881

 



 

Consolidated statement of cash flows

for the year ended 31 December 2023

 



2023

2022

 

 

£'000

£'000

Cash flows from operating activities




Cash generated from operations


38,234

30,489

Interest paid


(256)

(111)

Income tax paid

 

(8,229)

(7,055)

Net cash generated from operating activities

 

29,749

23,323

Cash flows from investing activities




Acquisition of subsidiary undertakings (net of cash acquired)


(1,582)

(4,078)

Purchases of property, plant and equipment


(7,665)

(4,626)

Proceeds from the sale of property, plant and equipment


721

730

Purchases of intangible assets


(3,033)

(3,193)

Interest received

 

212

4

Net cash used in investing activities

 

(11,347)

(11,163)

Cash flows from financing activities




Repayments of borrowings


(1,443)

(2,312)

Payment of lease liabilities


(2,484)

(2,356)

Dividends paid to the Company's shareholders


(15,196)

(10,298)

Purchase of own shares


(33)

(13)

Reduction in non-controlling interest


-

(285)

Net cash used in financing activities

 

(19,156)

(15,264)

Net increase in cash in the year


(754)

(3,104)

Cash and cash equivalents at the beginning of the year


33,962

35,681

Effects of exchange rates on cash and cash equivalents

 

(471)

1,385

Cash and cash equivalents at the end of the year

 

32,737

33,962



 

Notes to the financial statements

for the year ended 31 December 2023

 

 

1 Earnings per share

The calculation of basic earnings per ordinary share ("EPS") is based on the profit on ordinary activities after taxation of £23,264,000 (2022: £20,225,000) and on 12,260,286 (2022: 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.

 


2023

 


2022

 

 

£'000

Pence

 

£'000

Pence

Profit on ordinary activities after taxation

23,264

189.8

 

20,225

164.9

 

 

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 2023 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 2022 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 2022. They are also consistent with those in the full accounts for the year ended 31 December 2023, which have yet to be published.

 

The Group will post its annual report and accounts to shareholders on 23 May 2024, 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

Company Secretary

Tel: 01422 372 852



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 Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
FR EAPSSFFFLEEA