Half Yearly Report

RNS Number : 3827N
London Security PLC
28 September 2012
 



LONDON SECURITY plc

 

FINANCIAL HIGHLIGHTS

 

Financial highlights of the unaudited results for the six months ended 30 June 2012 compared with the six months ended 30 June 2011 are as follows:

Revenue

£47.6 million

(2011: £47.9 million)

Operating profit

£9.8 million

(2011: £9.9 million)

Profit before income tax

£15.5million

(2011: £9.7 million)

 

TRADING AND PROSPECTS

 

The financial highlights illustrate that the Group's revenue decreased by £0.3 million (0.6%) to £47.6 million and operating profit decreased by £0.1 million (1%) to £9.8 million. The movement in the Sterling to Euro average exchange rate (1.14 to 1.21) has decreased like for like revenue by £2.3 million and operating profit by £0.5 million. These results reflect a consolidation of the strong growth experienced in 2011 in our core market, entry into fixed suppression systems and greater investment in customer retention. The profit before income tax of £15.5 million includes £5.9 million which is discussed further below. Adjusting for this item profit before income tax would be £9.6 million, a decrease of £0.1 million on 2011.

 

During the period under review the Group sold part of its Elland, West Yorkshire site. The sale realised £7.2 million and the profit on sale was £5.9 million. A new factory and office building at Elland is under construction and is expected to be operational later this year. The cost of this building and associated new equipment is expected to be £3.4 million.

 

The Group's borrowings are due for repayment by June 2013 and are therefore disclosed as current liabilities. Negotiations are taking place with several interested financial institutions with the purpose of refinancing these borrowings. Your Directors are confident of successfully concluding these negotiations early in 2013.

 

In the six months to the end of June the Group has acquired a total of eight small well established businesses in the UK, the Netherlands and Austria at a cost of £1.2 million (2011: ten businesses at a cost of £2.0 million). In July three further acquisitions were made at a cost of £1.7 million in the Netherlands and Luxembourg. 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.

 

Trading prospects for the second half of 2012 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. In 2011 the Group benefitted from certain legislative changes which will not be repeated in 2012. Despite this, and the depreciation of the Euro against the reporting currency of Sterling, the Group is likely to report a similar level of operating profit in 2012.

 

DIVIDENDS

 

An interim dividend in respect of 2012 of £0.25 per ordinary share was paid to shareholders on 22 June 2012.

 

 

 

J.G. MURRAY

Chairman

28 September 2012


 



Unaudited

Unaudited

Audited



six months

six months

year



ended

ended

ended



30 June

30 June

31 December



2012

2011

2011


Note

£'000

£'000

£'000

Revenue

 

47,647

47,900

96,267

Cost of sales

 

(8,856)

(9,762)

(19,481)

Gross profit

 

38,791

38,138

76,786

Distribution costs

 

(18,426)

(17,861)

(35,474)

Administrative expenses

 

(10,584)

(10,402)

(20,554)

Operating profit

 

9,781

9,875

20,758

EBITDA*

 

11,629

11,723

24,549

Depreciation and amortisation

 

(1,848)

(1,848)

(3,791)

Operating profit

 

9,781

9,875

20,758

Profit on the disposal of fixed assets

3

5,921

-

-

Finance income

 

379

319

855

Finance costs

 

(566)

(523)

(1,286)

Finance costs - net

 

(187)

(204)

(431)

Profit before income tax

 

15,515

9,671

20,327

Income tax expense

 

(3,174)

(3,067)

(6,199)

Profit for the period attributable to equity shareholders of the Company

 

12,341

6,604

14,128

Earnings per share

 

 

 

 

Basic and diluted

4

100.6p

53.8p

115.2p

Dividends

 

 

 

 

Dividends paid per share

 

25.0p

24.0p

24.0p

* Earnings before interest, taxation, depreciation, amortisation and impairment charges.

The above are all as a result of continuing operations.


 


Unaudited

Unaudited

Audited


six months

six months

year


ended

ended

ended


30 June

30 June

31 December


2012

2011

2011


£'000

£'000

£'000

Profit for the financial period

12,341

6,604

14,128

Other comprehensive (expense)/income:

 

 

 

- currency translation differences on foreign operation consolidation, net of tax

(718)

472

(421)

- actuarial gain recognised in pension scheme

-

-

(68)

- movement on deferred tax relating to pension scheme

-

-

16

- net pension asset not recognised due to uncertainty over future recoverability

-

-

(568)

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

(718)

472

(1,041)

Total comprehensive income for the period

11,623

7,076

13,087








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 2011

123

-

-

2,033

6,310

47,567

56,033

Comprehensive income for the period

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

-

6,604

6,604

Exchange adjustments

-

-

-

-

472

-

472

Total comprehensive income for the period

-

-

-

-

472

6,604

7,076

Contributions by and distributions to owners of the Company:

 

 

 

 

 

 

 

- issue of shares

-

344

-

-

-

-

344

- dividends

-

-

-

-

-

(2,944)

(2,944)

- purchase of own shares

-

-

1

-

-

(454)

(453)

Total contributions by and distributions to owners of the Company

-

344

1

-

-

(3,398)

(3,053)

At 30 June 2011

123

344

1

2,033

6,782

50,773

60,056

Comprehensive income for the period

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

-

7,524

7,524

Exchange adjustments

-

-

-

-

(893)

-

(893)

Actuatrial loss on pension scheme

-

-

-

-

-

(68)

(68)

Movement on deferred tax relating to pension scheme

-

-

-

-

-

16

16

Net pension asset not recognised due to uncertainty over future recoverability

-

-

-

-

-

(568)

(568)

Total comprehensive income for the period

-

-

 

-

(893)

6,904

6,011

Contributions by and distributions to owners of the Company:

 

 

 

 

 

 

 

- purchase of own shares

-

-

-

-

-

(29)

(29)

Total contributions by and distributions to owners of the Company

-

-

-

-

-

(29)

(29)

At 31 December 2011

123

344

1

2,033

5,889

57,648

66,038

Comprehensive income for the period

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

-

12,341

12,341

Exchange adjustments

-

-

-

-

(718)

-

(718)

Total comprehensive income for the period

-

-

-

-

(718)

12,341

11,623

Contributions by and distributions to owners of the Company:

 

 

 

 

 

 

 

- dividends

-

-

-

-

-

(3,065)

(3065)

- purchase of own shares

-

-

-

-

-

(5)

(5)

Total contributions by and distributions to owners of the Company

-

-

-

-

-

(3,070)

(3,070)

At 30 June 2012

123

344

1

2,033

5,171

66,919

74,591

 


 


Unaudited

Unaudited

Audited


as at

as at

as at


30 June

30 June

31 December


2012

2011

2011


£'000

£'000

£'000

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

7,997

8,195

7,389

Intangible assets

53,374

53,711

53,454

Deferred income tax asset

498

623

500

 

61,869

62,529

61,343

Current assets

 

 


Inventories

8,656

8,794

8,329

Trade and other receivables

22,088

19,245

18,373

Cash and cash equivalents

18,706

20,267

23,043

 

49,450

48,306

49,745

Total assets

111,319

110,835

111,088

Liabilities

 

 


Current liabilities

 

 


Trade and other payables

(16,057)

(16,998)

(15,919)

Income tax liabilities

(520)

(339)

(1,004)

Borrowings

(18,367)

(7,487)

(7,030)

Derivative financial instruments

(150)

-

-

Provision for liabilities and charges

(231)

(4)

(109)

 

(35,325)

(24,828)

(24,062)

Non-current liabilities

 

 


Trade and other payables

(505)

(536)

(526)

Borrowings

-

(24,396)

(19,329)

Derivative financial instruments

-

(17)

(103)

Deferred income tax liabilities

(254)

(330)

(359)

Retirement benefit obligations

(644)

(672)

(671)

 

(1,403)

(25,951)

(20,988)

Total liabilities

(36,728)

(50,779)

(45,050)

Net assets

74,591

60,056

66,038

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

5,171

6,782

5,889

Retained earnings

66,919

50,773

57,648

Total shareholders' equity

74,591

60,056

66,038


 


Unaudited

Unaudited

Audited


six months

six months

year


ended

ended

ended


30 June

30 June

31 December


2012

2011

2011


£'000

£'000

£'000

Cash flows from operating activities

 

 

 

Cash generated from operations

10,637

11,010

22,887

Interest paid

(229)

(323)

(626)

Income tax paid

(4,000)

(3,674)

(6,027)

Net cash generated from operating activities

6,408

7,013

16,234

Cash flows from investing activities

 

 


Acquisition of subsidiary undertakings

(276)

(948)

(1,390)

Purchases of property, plant and equipment

(2,968)

(1,382)

(2,332)

Proceeds from sale of property, plant and equipment

3,901

142

300

Purchases of intangible assets

(624)

(1,065)

(1,653)

Interest received

89

106

266

Net cash used in investing activities

122

(3,147)

(4,809)

Cash flows from financing activities

 

 


Repayments of borrowings

(7,265)

(3,703)

(7,252)

Purchase of own shares

(5)

(453)

(482)

Issue of shares

-

344

344

Dividends paid to Company's shareholders

(3,065)

(2,944)

(2,944)

Net cash used in financing activities

(10,335)

(6,756)

(10,334)

Effects of exchange rates on cash and cash equivalents

(532)

871

(334)

Net (decrease)/increase in cash in the period

(4,337)

(2,019)

757

Cash and cash equivalents at beginning of the period

23,043

22,286

22,286

Cash and cash equivalents at end of the period

18,706

20,267

23,043


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 2012 is unaudited and has been prepared on the basis of the recognition and measurement requirements of adopted International Financial Reporting Standards ("IFRS") as at 30 June 2012 that are effective as at 31 December 2011 and the accounting policies set out in the Group's Annual Report and Accounts 2011. Comparative figures for the year ended 31 December 2011 have been extracted from the statutory accounts for the year ended 31 December 2011 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 and did not contain 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, income and expense. Actual results may differ from these estimates.

3 Profit on the disposal of fixed assets

In January 2012, one of the Group's subsidiaries sold part of its site. The sale realised £7.2 million and the profit on the sale was £5.9 million.

4 Earnings per share

The calculation of basic earnings per ordinary share is based on the profit on ordinary activities after taxation of £12,341,000 (2011: £6,604,000) and on 12,261,496 (2011: 12,268,014) 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


2012

2011

2011

 

£'000

£'000

£'000

Profit on ordinary activities after taxation

12,341

6,604

14,128

Basic earnings per ordinary share

100.6p

53.8p

115.2p

 

5 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 2012. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2012.

 

For further information, please contact:

 

London Security plc

Richard Pollard

Company Secretary                                                            Tel : 01422 372852

 

WH Ireland Limited

Andrew Kitchingman                                                         Tel : 0113 394 6619

Nick Field                                                                             Tel : 0207 220 1658


 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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