Final Results

RNS Number : 2734M
London Security PLC
06 May 2015
 



London Security plc

Annual Report and Accounts 2014

 

CHAIRMAN'S STATEMENT

 

FINANCIAL HIGHLIGHTS

 

Financial highlights of the audited results for the year ended 31 December 2014 compared with the year ended 31 December 2013 are as follows:

 

·      revenue of £100.9 million (2013: £101.4 million);

·      operating profit before depreciation and amortisation of £23.9 million (2013: £24.1 million);

·      operating profit of £19.7 million (2013: £20.0 million); and

·      profit after income tax of £12.7 million (2013: £13.7 million).

 

TRADING REVIEW

 

The financial highlights illustrate that the Group's revenue decreased by £0.5 million (0.5%) to £100.9 million. However, these results are impacted by the movement in the Euro to Sterling average exchange rate which has increased from 1.18 to 1.24. This movement in exchange rates had an adverse effect of £4.0 million on reported turnover. If the 2014 results had been translated at 2013 rates, revenue would have been £104.9 million instead of £100.9 million (increase of 3.5% on the prior year).

 

Operating profit decreased by £0.3 million (1.5%) to £19.7 million. Adjusting for the change in the exchange rate on the same basis as above, operating profit would have been £20.6 million instead of £19.7 million (increase of 3.0%). This performance is very satisfactory and whilst the trading environment remains difficult we are hopeful of growth returning to our market.

 

A more detailed review of this year's performance is given in the Financial Review and 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 has consolidated its presence, particularly in Austria and the UK with the incorporation of PMP Manus G.m.b.H., and the acquisition of Tunbridge Wells Fire Protection Limited and the Pyrotec businesses, Pyrotec Fire Protection Limited and Pyrotec Fire Detection Limited. In addition a further seven acquisitions of service contracts were concluded for smaller, well established businesses for integration into the Group's existing subsidiaries.

 

MANAGEMENT AND STAFF

 

2014 was a year in which the staff performed well and, on your behalf, I would like to express thanks and appreciation for their contribution.

 

DIVIDENDS

 

A final dividend in respect of 2013 of £0.31 per ordinary share was paid to shareholders on 8 July 2014.

An interim dividend in respect of 2014 of £0.31 per ordinary share was paid to shareholders on 19 December 2014.

The Board is recommending the payment of a final dividend in respect of 2014 of £0.31 per ordinary share to be paid on 8 July 2015 to shareholders on the register on 12 June 2015. The shares will be marked ex-dividend on 10 June 2015.

 

FUTURE PROSPECTS

 

Economic growth in the Group's market has been depressed in 2014 but our business remains strong, cash generative and well developed, with positive net funds. There are signs of a slow recovery and, as a leading provider in this market with a well-diversified and loyal customer base, the Board is optimistic for further success in 2015 as growth improves.

 

ANNUAL GENERAL MEETING

 

The Annual General Meeting will be held at 10 Bruton Street, 5th Floor, London W1J 6PX on 17 June 2015 at 11 am.  You will find enclosed a form of proxy for use at that Meeting which you are requested to complete and return in accordance with the instructions on the form.  Your Directors look forward to meeting you at that time.

 

 

 

J.G. Murray

Chairman

5 May 2015



 

Consolidated income statement

for the year ended 31 December 2014

 

 

 

2014

2013

 

Note

£'000

£'000

Revenue

 

100,876

101,362

Cost of sales

 

(18,638)

(19,785)

Gross profit

 

82,238

81,577

Distribution costs

 

(38,106)

(37,894)

Administrative expenses

 

(24,451)

(23,729)

Operating profit

 

19,681

19,954

EBITDA*

 

23,938

24,059

Depreciation and amortisation

 

(4,257)

(4,105)

Operating profit

 

19,681

19,954

Finance income

 

188

377

Finance costs

 

(832)

(475)

Finance costs - net

 

(644)

(98)

Profit before income tax

 

19,037

19,856

Income tax expense

 

(6,362)

(6,148)

Profit for the year attributable to equity shareholders of the Company

 

12,675

13,708

Earnings per share

 

 

 

Basic and diluted

1

103.4p

111.8p

 

 

 

* Earnings before interest, tax, depreciation and amortisation.

 

 



 

Consolidated statement of comprehensive income

for the year ended 31 December 2014

 

 

 

2014

2013

 

 

£'000

£'000

Profit for the financial year

 

12,675

13,708

Other comprehensive income:

 

 

 

Items that will not be reclassified subsequently to profit or loss

 

 

 

- currency translation differences on foreign currency net investments, net of tax

 

(1,955)

331

- actuarial gain/(loss) recognised in the Nu-Swift pension scheme

 

127

(72)

- movement on deferred tax relating to Nu-Swift pension scheme surplus

 

(518)

(485)

- Nu-Swift pension scheme surplus recognised

 

-

1,794

- actuarial loss recognised in the Ansul pension scheme

 

(191)

(381)

- movement on deferred tax relating to Ansul pension scheme deficit

 

69

166

Other comprehensive (loss)/gain for the year, net of tax

 

(2,468)

1,353

Total comprehensive income for the year

 

10,207

15,061

 



 

Consolidated statement of changes in equity

for the year ended 31 December 2014

 

 

 

 

 

 

 

Profit

 

 

Share

Share

Capital

Merger

Other

and loss

 

 

capital

premium

redemption

reserve

reserve

account

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2013

123

344

1

2,033

5,382

69,136

77,019

Total comprehensive income for the year

 

 

 

 

 

 

 

Profit for the financial period

-

-

-

-

-

13,708

13,708

Other comprehensive income:

 

 

 

 

 

 

 

- exchange adjustments

-

-

-

-

331

-

331

- actuarial loss on pension scheme

-

-

-

-

-

(453)

(453)

- net movement on deferred tax relating to pension asset

-

-

-

-

-

(319)

(319)

- brought forward pension surplus recognised

-

-

-

-

-

1,794

1,794

Total comprehensive income for the year

-

-

-

-

331

14,730

15,061

Contributions by and distributions
to owners of the Company:

 

 

 

 

 

 

 

- dividends

-

-

-

-

-

(9,319)

(9,319)

- release of provision for unclaimed dividends

-

-

-

-

-

50

50

Total contributions by and distributions to owners of the Company

-

-

-

-

-

(9,269)

(9,269)

At 1 January 2014

123

344

1

2,033

5,713

74,597

82,811

Total comprehensive income for the year

 

 

 

 

 

 

 

Profit for the financial period

-

-

-

-

-

12,675

12,675

Other comprehensive income:

 

 

 

 

 

 

 

- exchange adjustments

-

-

-

-

(1,955)

-

(1,955)

- actuarial loss on pension schemes

-

-

-

-

-

(64)

(64)

- net movement on deferred tax relating to pension asset

-

-

-

-

-

(449)

(449)

Total comprehensive income for the year

-

-

-

-

(1,955)

12,162

10,207

Contributions by and distributions to owners of the Company:

 

 

 

 

 

 

 

- dividends

-

-

-

-

-

(7,602)

(7,602)

Total contributions by and distributions to owners of the Company

-

-

-

-

-

(7,602)

(7,602)

At 31 December 2014

123

344

1

2,033

3,758

79,157

85,416

 

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 2014

 

 

2014

2013

 

 

£'000

£'000

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

 

9,747

9,973

Intangible assets

 

61,400

58,325

Deferred tax asset

 

753

632

Retirement benefit surplus

 

3,283

2,424

Derivative financial instruments

 

-

92

 

 

75,183

71,446

Current assets

 

 

 

Inventories

 

9,494

8,826

Trade and other receivables

 

19,573

21,153

Cash and cash equivalents

 

20,978

20,565

 

 

50,045

50,544

Total assets

 

125,228

121,990

Liabilities

 

 

 

Current liabilities

 

 

 

Trade and other payables

 

(18,232)

(16,992)

Income tax liabilities

 

(1,389)

(866)

Borrowings

 

(1,782)

(1,878)

Provision for liabilities and charges

 

-

(4)

 

 

(21,403)

(19,740)

Non-current liabilities

 

 

 

Trade and other payables

 

(739)

(509)

Borrowings

 

(13,678)

(16,261)

Derivative financial instruments

 

(227)

-

Deferred tax liabilities

 

(1,701)

(991)

Retirement benefit obligations

 

(1,843)

(1,678)

Provision for liabilities and charges

 

(221)

-

 

 

(18,409)

(19,439)

Total liabilities

 

(39,812)

(39,179)

Net assets

 

85,416

82,811

Shareholders' equity

 

 

 

Ordinary shares

 

123

123

Share premium

 

344

344

Capital redemption reserve

 

1

1

Merger reserve

 

2,033

2,033

Other reserves

 

3,758

5,713

Retained earnings

 

79,157

74,597

Total shareholders' equity

 

85,416

82,811

 

 

Consolidated statement of cash flow

for the year ended 31 December 2014

 

 

 

2014

2013

 

 

£'000

£'000

Cash flows from operating activities

 

 

 

Cash generated from operations

 

24,338

22,913

Interest paid

 

(472)

(418)

Income tax paid

 

(5,218)

(5,625)

Net cash generated from operating activities

 

18,648

16,870

Cash flows from investing activities

 

 

 

Acquisition of subsidiary undertakings (net of cash acquired)

 

(2,164)

(3,002)

Purchases of property, plant and equipment

 

(2,304)

(2,537)

Proceeds from sale of property, plant and equipment

 

242

275

Proceeds from sale of intangible assets

 

-

33

Purchases of intangible assets

 

(3,519)

(2,575)

Interest received

 

68

96

Net cash used in investing activities

 

(7,677)

(7,710)

Cash flows from financing activities

 

 

 

Repayments of borrowings

 

(1,855)

(16,610)

New borrowings

 

-

19,675

Associated loan arrangement fees

 

-

(488)

Dividends paid to Company's shareholders

 

(7,602)

(9,319)

Net cash used in financing activities

 

(9,457)

(6,742)

Effects of exchange rates on cash and cash equivalents

 

(1,101)

286

Net increase in cash in the year

 

413

2,704

Cash and cash equivalents at beginning of the year

 

20,565

17,861

Cash and cash equivalents at end of the year

 

20,978

20,565

 

 



 

Notes to the financial statements

for the year ended 31 December 2014

 

1 Earnings per share

The calculation of basic earnings per ordinary share ("EPS") is based on the profit on ordinary activities after taxation of £12,675,000 (2013: £13,708,000) and on 12,261,477 (2013: 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.

 

2014

2013

 

£'000

Pence

£'000

Pence

Profit on ordinary activities after taxation

12,675

103.4

13,708

111.8

 

2 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 2014 have been extracted from the full accounts of the Group for that year which received an unqualified auditor's report and which have not yet been delivered to the Registrar of Companies.  The financial information for the year ended 31 December 2013 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 unqualified.  The accounts for the year ended 31 December 2014 and 31 December 2013 did not contain a statement under s498 (1) to (4) of the Companies Act 2006 or under s237(1) to (4) of the Companies Act 1985.

This preliminary announcement has been prepared in accordance with International Financial Reporting Standards. The Group will post its annual report and accounts to shareholders on 15 May 2015. A copy of the annual report and accounts can be found on the company's webpage (www.londonsecurity.org).

 

 

 

Enquiries:                             London Security plc

                                                Richard Pollard

                                                Company Secretary                                                            Tel:         01422 372852

 

WH Ireland Limited

 

                                                Andrew Kitchingman                                                          Tel:       0113 394 6600

                                                Liam Gribben

 


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