Half Yearly Report

RNS Number : 5445T
London Security PLC
30 September 2010
 



 

LONDON SECURITY PLC

 

30 September 2010

 

INTERIM ANNOUNCEMENT

 

FINANCIAL HIGHLIGHTS

 

Financial highlights of the unaudited results for the six months ended 30 June 2010 compared with the six months ended 30 June 2009 are as follows:

 

·      revenue of £43.1 million (2009: £42.5 million);

·      operating profit of £8.9 million (2009: £8.4 million); and

·      profit before income tax of £9.1 million (2009: £7.4 million).

 

 

TRADING AND PROSPECTS

 

The financial highlights illustrate that The Group's revenue increased by £0.6 million (1.4%) to £43.1 million and operating profit increased by £0.5 million (6.0%) to £8.9 million. These results partially reflect the movement in the Sterling to Euro average exchange rate which has risen from 1.12 to 1.15. If the 2010 results from the European subsidiaries had been translated at 2009 rates, revenue would have been £44.0 million instead of £43.1 million, an increase of 3.5%.

 

On the same basis operating profit would have been £9.1 million instead of £8.9 million, an increase of 8.3% compared to 2009, reflecting strong growth in continental Europe. In the UK there has been greater investment in customer retention which has been reflected in lower revenue and operating profit.

 

In addition to the improved operating profit performance, the Group has benefited from the low level of interest rates and has repaid a further £4.5 million of borrowings. These two factors have resulted in a reduction in finance costs of £0.5 million. Finance income has also benefited from a further £0.5 million gain on the holding of foreign currency.

 

The Group continues its evolution from being solely an extinguisher supplier to the customers' safety partner through our multi-service strategy offering. This was achieved through a series of training and employee development programmes, which has resulted in improved customer retention and greater motivation of the workforce.

 

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.

 

Trading prospects for the second half of 2010 will continue to be challenging but, with the effect of past and potential acquisitions and our multi-service offering, we are in a strong position to face the challenges that will invariably present. Therefore we expect to continue to deliver strong results in the future.

 

SHARE BUYBACK PROGRAMME

 

As previously announced, the Board continues to believe that shareholder value will be optimized by the purchase by the company, when appropriate, of its own shares.

 

During the period under review a total of 11,100 ordinary shares were purchased for cancellation for a total consideration of £88,800. Following 30 June 2010 and up until the date of this announcement a further 10,150 ordinary shares, for a total consideration of £91,275, have been purchased for cancellation

 

The Directors confirm that they intend to actively continue to pursue this policy and any shareholder who is considering taking advantage of the share buyback programme is invited to contact their stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000, in order to contact Brewin Dolphin Limited who are operating the buyback programme on behalf of the company.

 

 

J.G. Murray

Chairman

30 September 2010

 

                               Consolidated income statement
                        for the six months ended 30 June 2010




Unaudited

Unaudited

Audited



six months

six months

year



ended

ended

ended



30 June

30 June

31 December



2010

2009

2009


Note

£'000

£'000

£'000






Revenue


43,066

42,478

85,968

Cost of sales


(7,642)

(7,277)

(14,507)

Gross profit


35,424

35,201

71,461

Distribution costs


(16,726)

(16,476)

(32,520)

Administrative expenses


(9,804)

(10,288)

(19,177)

Operating profit


8,894

8,437

19,764

EBITDA*


10,473

10,094

23,171

Depreciation and amortisation


(1,579)

(1,657)

(3,407)

Operating profit


8,894

8,437

19,764

Finance income


775

333

560

Finance costs


(694)

(1,158)

(1,937)

Fair value of derivative financial instruments


119

(176)

(84)

Finance costs - net


200

(1,001)

(1,461)

Profit before income tax


9,094

7,436

18,303

Income tax expense


(2,613)

(2,462)

(3,772)

Profit for the period attributable to equity shareholders of the Company


6,481

4,974

14,531

Earnings per share





Basic and diluted

2

52.7p

40.5p

118.2p

Dividends





Dividends paid per share


-

-

-

* 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 2010



Unaudited

Unaudited

Audited


six months

six months

year


ended

ended

ended


30 June

30 June

31 December


2010

2009

2009


£'000

£'000

£'000

Profit for the financial period

6,481

4,974

14,531

Other comprehensive income:




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

(363)

(1,996)

(1,366)

- foreign currency loan hedges, net of tax

465

3,560

2,552

- actuarial loss recognised in pension scheme

-

-

(397)

- movement on deferred tax relating to pension scheme

(57)

(59)

(177)

- purchase of own shares

(89)

-

-

Other comprehensive (expense) / income for the period, net of tax

(44)

1,505

612

Total comprehensive income for the period

6,437

6,479

15,143

 

 

Consolidated statement of changes in equity

 

for the six months ended 30 June 2010


Unaudited

Unaudited

Audited


six months

six months

year


ended

ended

ended


30 June

30 June

31 December


2010

2009

2009


£'000

£'000

£'000

Profit for the financial period

6,481

4,974

14,531

- other comprehensive income:




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

(363)

(1,996)

(1,366)

- foreign currency loan hedges net of tax

465

3,560

2,552

- actuarial loss recognised in pension scheme

-

-

(397)

- movement on deferred tax relating to pension scheme

(57)

(59)

(177)

- purchase of own shares

(89)

-

-

Net increase in shareholders' funds

6,437

6,479

15,143

Shareholders' funds at beginning of the period

45,657

30,514

30,514

Shareholders' funds at end of the period

52,094

36,993

45,657

 

 

                              Consolidated statement of financial position
                       as at 30 June 2010



Unaudited

Unaudited

Audited


as at

as at

as at


30 June

30 June

31 December


2010

2009

2009


£'000

£'000

£'000

Assets




Non-current assets




Property, plant and equipment

7,840

8,810

8,552

Intangible assets

51,787

52,762

52,427

Deferred income tax asset

611

779

604


60,238

62,351

61,583

Current assets




Inventories

7,501

8,243

7,804

Trade and other receivables

17,985

18,756

17,849

Cash and cash equivalents

20,036

14,382

19,070


45,522

41,381

44,723

Total assets

105,760

103,732

106,306

Liabilities




Current liabilities




Trade and other payables

(16,029)

(17,229)

(15,534)

Income tax liabilities

(652)

(2,540)

(902)

Borrowings

(6,695)

(7,730)

(7,597)

Provision for liabilities and charges

(14)

(21)

(18)


(23,390)

(27,520)

(24,051)

Non-current liabilities




Trade and other payables

-

(34)

(18)

Borrowings

(29,615)

(38,223)

(35,596)

Derivative financial instruments

(177)

(388)

(296)

Deferred income tax liabilities

(197)

(91)

(83)

Retirement benefit obligations

(266)

(483)

(605)

Provision for liabilities and charges

(21)

-

-


(30,276)

(39,219)

(36,598)

Total liabilities

(53,666)

(66,739)

(60,649)

Net assets

52,094

36,993

45,657

Shareholders' equity




Ordinary shares

123

123

123

Merger reserve

2,033

2,033

2,033

Other reserves

6,412

6,688

6,310

Retained earnings

43,526

28,149

37,191

Total shareholders' equity

52,094

36,993

45,657

 

                               Consolidated statement of cash flow
                        for the six months ended 30 June 2010



Unaudited

Unaudited

Audited


six months

six months

year


ended

ended

ended


30 June

30 June

31 December


2010

2009

2009


£'000

£'000

£'000

Cash flows from operating activities




Cash generated from operations

10,548

11,472

24,355

Interest paid

(560)

(878)

(1,422)

Income tax paid

(3,526)

(1,986)

(4,386)

Net cash generated from operating activities

6,462

8,608

18,547

Cash flows from investing activities




Acquisition of subsidiary undertaking

-

-

(375)

Purchases of property, plant and equipment

(885)

(992)

(1,777)

Proceeds from sale of property, plant and equipment

128

142

271

Purchases of intangible assets

(385)

(757)

(607)

Interest received

201

93

120

Net cash used in investing activities

(941)

(1,514)

(2,368)

Cash flows from financing activities




Purchase of own shares

(89)

-

-

Repayments of borrowings

(4,466)

(3,587)

(7,984)

Net cash used in financing activities

(4,555)

(3,587)

(7,984)

Net increase in cash in the period

966

3,507

8,195

Cash and cash equivalents at beginning of the period

19,070

10,875

10,875

Cash and cash equivalents at end of the period

20,036

14,382

19,070

 


Notes to the financial statements
for the six months ended 30 June 2010

 

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 2010 is unaudited and has been prepared on the basis of the accounting policies set out in the Group's Annual Report and Accounts 2009. Comparative figures for the year ended 31 December 2009 have been extracted from the statutory accounts for the year ended 31 December 2009 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 and did not contain any statement under Section 498 of the Companies Act 2006.

 

2    Earnings per share

The calculation of basic earnings per ordinary share is based on the profit on ordinary activities after taxation of £6,481,000 (2009: £4,974,000) and on 12,293,938 (2009: 12,294,798) 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. The revised weighted average number of shares is 12,293,938 (2009: 12,294,798). After taking into account the effect of dilutive securities, the basic earnings per ordinary share and adjusted earnings per ordinary share figures are unaltered.


Unaudited

Unaudited

Audited


six months

six months

year


ended

ended

ended


30 June

30 June

31 December


2010

2009

2009


£'000

£'000

£'000

Profit on ordinary activities after taxation

6,481

4,974

14,531

Basic earnings per ordinary share

52.7p

40.5p

118.2p

 

3    Actuarial valuation of pension scheme

As permitted under IAS 19, the Group has not prepared an actuarial valuation of pension scheme assets and liabilities for the Interim Statement 2010. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2010.

 

For further information, please contact:

 

London Security plc

Richard Pollard

Company Secretary                                                            01422 372852

 

Brewin Dolphin

Sandy Fraser / Iain Marlow                                                0845 2134730


 


This information is provided by RNS
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