Half Yearly Report

RNS Number : 7494Y
London Security PLC
11 September 2015
 

11 September 2015

LONDON SECURITY PLC

INTERIM RESULTS

 

Chairman's statement

 

 

Financial highlights

Revenue

£50.2m

2014: £51.3m

Operating profit

£7.9m

2014: £9.4m

 

TRADING

The financial highlights illustrate that the Group's revenue decreased by £1.1 million (2.1%) to £50.2 million. However these results are impacted by the movement in the Euro to Sterling average exchange rate which has increased from 1.22 to 1.36. This movement in exchange rates had an adverse effect of £4.3 million on reported turnover. If the 2015 results had been translated at 2014 rates, revenue would have been £54.5 million instead of £50.2 million, an increase of 6.2%. This real growth has come from acquisitions made in the second half of 2014 and first half of 2015, principally Pyrotec and Manus, which recorded turnover of £4.2 million.

Operating profit decreased by £1.5 million (16.0%) to £7.9 million. Adjusting for the change in exchange rates on the same basis as above, operating profit would have been £8.7 million instead of £7.9 million (an adjusted decrease of 7.4%). This is covered by increased competition and downward pressure on prices being experienced in our market.

ACQUISITIONS

In the six months to the end of June the Group has acquired a total of six well established businesses at a cost of £1.4 million (2014: five businesses at a cost of £0.6 million). 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.

PROSPECTS

Economic growth in the Group's market has been depressed 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 customer base, the Board is optimistic for further success in 2015 as growth improves.

DIVIDENDS

A final dividend in respect of 2014 of £0.31 per ordinary share was paid to shareholders on 8 July 2015.

 

J.G. Murray

Chairman

11 September 2015

 



 

Consolidated income statement

for the six months ended 30 June 2015

 

 

Unaudited

Unaudited

Audited

 

 

six months

six months

year

 

 

ended

ended

ended

 

 

30 June

30 June

31 December

 

 

2015

2014

2014

 

Note

£'000

£'000

£'000

Revenue

 

50,191

51,279

100,876

Cost of sales

 

(10,105)

(9,840)

(18,638)

Gross profit

 

40,086

41,439

82,238

Distribution costs

 

(19,297)

(19,585)

(38,106)

Administrative expenses

 

(12,872)

(12,430)

(24,451)

Operating profit

 

7,917

9,424

19,681

EBITDA*

 

10,341

11,544

23,938

Depreciation and amortisation

 

(2,424)

(2,120)

(4,257)

Operating profit

 

7,917

9,424

19,681

Finance income

 

84

93

188

Finance costs

 

(208)

(435)

(832)

Finance costs - net

 

(124)

(342)

(644)

Profit before income tax

 

7,793

9,082

19,037

Income tax expense

 

(2,561)

(2,907)

(6,362)

Profit for the period attributable to equity shareholders of the Company

5,232

6,175

12,675

Earnings per share

 



 

Basic and diluted

3

42.7p

50.4p

103.4p

Dividends

 



 

Dividends paid per share

 

Nil

Nil

62p

* 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 2015

 

Unaudited

Unaudited

Audited

 

six months

six months

year

 

ended

ended

ended

 

30 June

30 June

31 December

 

2015

2014

2014

 

£'000

£'000

£'000

Profit for the financial period

5,232

6,175

12,675

Other comprehensive (expense)/income:


 

 

Items that will not be reclassified subsequently to profit or loss


 

 

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

(2,194)

(1,108)

(1,955)

- actuarial gain recognised in the Nu-Swift pension scheme

-

-

127

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

-

-

(518)

- actuarial loss recognised in the Ansul pension scheme

-

-

(191)

- movement on deferred tax relating to the Ansul pension scheme

-

-

69

Other comprehensive expense for the period, net of tax

(2,194)

(1,108)

(2,468)

Total comprehensive income for the period

3,038

5,067

10,207

 



 

Consolidated statement of changes in equity

for the six months ended 30 June 2015

 

 

 

 

 

 

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 2014

123

344

1

2,033

5,713

74,597

82,811

Comprehensive income for the period








- profit for the period

-

-

-

-

-

6,175

6,175

- exchange adjustments

-

-

-

-

(1,108)

-

(1,108)

Total comprehensive income for the period

-

-

-

-

(1,108)

6,175

5,067

At 30 June 2014

123

344

1

2,033

 4,605

80,772

87,878

Comprehensive income for the period








- profit for the period

-

-

-

-

-

6,500

6,500

- exchange adjustments

-

-

-

-

(847)

-

(847)

- actuarial loss on pension schemes

-

-

-

-

-

(64)

(64)

- movement on deferred tax relating to pension schemes

-

-

-

-

-

(449)

(449)

Total comprehensive income for the period

-

-

-

-

(847)

5,987

5,140

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

Comprehensive income for the period








- profit for the period

-

-

-

-

-

5,232

5,232

- exchange adjustments

-

-

-

-

(2,194)

-

(2,194)

Total comprehensive income for the period

-

-

-

-

(2,194)

5,232

3,038

At 30 June 2015

123

344

1

2,033

1,564

84,389

88,454

 



 

Consolidated statement of financial position

for the six months ended 30 June 2015

 

Unaudited

Unaudited

Audited

 

as at

as at

as at

 

30 June

30 June

31 December

 

2015

2014

2014

 

£'000

£'000

£'000

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

9,335

9,751

9,747

Intangible assets

60,603

57,468

61,400

Deferred tax asset

699

604

753

Retirement benefit surplus

3,283

2,469

3,283


73,920

70,292

75,183

Current assets

 

 

 

Inventories

8,885

9,221

9,494

Trade and other receivables

19,953

20,117

19,573

Cash and cash equivalents

22,696

26,203

20,978


51,534

55,541

50,045

Total assets

125,454

125,833

125,228

Liabilities

 

 

 

Current liabilities

 

 

 

Trade and other payables

(18,279)

(17,617)

(18,232)

Income tax liabilities

(636)

(383)

(1,389)

Borrowings

(1,659)

(1,823)

(1,782)

Provision for liabilities and charges

-

(4)

-


(20,574)

(19,827)

(21,403)

Non-current liabilities

 

 

 

Trade and other payables

(703)

(535)

(739)

Borrowings

(11,965)

(14,890)

(13,678)

Derivative financial instruments

(163)

(86)

(227)

Deferred income tax liabilities

(1,667)

(987)

(1,701)

Retirement benefit obligations

(1,687)

(1,630)

(1,843)

Provision for liabilities and charges

(241)

-

(221)


(16,426)

(18,128)

(18,409)

Total liabilities

(37,000)

(37,955)

(39,812)

Net assets

88,454

87,878

85,416

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

1,564

4,605

3,758

Retained earnings

84,389

80,772

79,157

Total shareholders' equity

88,454

87,878

85,416

 



 

Consolidated statement of cash flow

for the six months ended 30 June 2015

 

Unaudited

Unaudited

Audited

 

six months

six months

year

 

ended

ended

ended

 

30 June

30 June

31 December

 

2015

2014

2014

 

£'000

£'000

£'000

Cash flows from operating activities

 

 

 

Cash generated from operations

9,865

11,764

24,338

Interest paid

(208)

(239)

(472)

Income tax paid

(3,560)

(2,676)

(5,218)

Net cash generated from operating activities

6,097

8,849

18,648

Cash flows from investing activities


 

 

Acquisition of subsidiary undertakings

(902)

-

(2,164)

Purchases of property, plant and equipment

(1,125)

(1,126)

(2,304)

Proceeds from sale of property, plant and equipment

91

133

242

Purchases of intangible assets

(373)

(667)

(3,519)

Proceeds from sale of intangible assets

-

39

-

Interest received

20

48

68

Net cash used in investing activities

(2,289)

(1,573)

(7,677)

Cash flows from financing activities


 

 

Repayments of borrowings

(844)

(914)

(1,855)

Dividends paid to Company's shareholders

-

-

(7,602)

Net cash used in financing activities

(844)

(914)

(9,457)

Effects of exchange rates on cash and cash equivalents

(1,246)

(724)

(1,101)

Net increase in cash in the period

1,718

5,638

413

Cash and cash equivalents at beginning of the period

20,978

20,565

20,565

Cash and cash equivalents at end of the period

22,696

26,203

20,978

 



 

Notes to the financial statements

for the six months ended 30 June 2015

 

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 2015 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 2014. 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 2014 have been extracted from the statutory accounts for the year ended 31 December 2014 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, 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 £5,232,000 (2014: £6,175,000) and on 12,261,477 (2014: 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

 

2015

2014

2014

 

£'000

£'000

£'000

Profit on ordinary activities after taxation

5,232

6,175

12,675

Basic earnings per ordinary share

42.7p

50.4p

103.4p

 

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 2015. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2015.

 

For further information, please contact:

 

London Security plc

Richard Pollard

Company Secretary                                                                            Tel : 01422 372852

 

WH Ireland Limited

Andrew Kitchingman                                                                          Tel : 0113 394 6600

Liam Gribben

                                                                    


 


This information is provided by RNS
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