Interim Results

London Securities PLC 20 October 2000 CHAIRMAN'S STATEMENT As I explained in the Chairman's Statement included with the 1999 Annual Report, the Company acquired Ansul s.a. on 29 December 1999 and disposed of all its property subsidiaries at the same date. With effect from 29 December 1999, the Group's primary business is the manufacture, sale and service of portable fire equipment in the UK, Belgium, Holland, Austria and Switzerland. Consequently, the comparative figures included in the profit and loss account are not relevant to our present activities as they relate to the group's former activities as a property investment group. An unaudited proforma profit and loss account setting out financial information for our new business was included in the 1999 Annual Report and a comparison thereto is detailed below: Unaudited Unaudited 6 months to 30 proforma 12 June 2000 months to 31 December 1999 £'000 £'000 EBITDA 4551 7092 Add back non-recurring costs - 1244 ______ ______ Adjusted EBITDA 4551 8336 Depreciation (848) (1506) Amortisation of goodwill (1319) (1005) ______ ______ Operating profit 2384 5825 Despite the continuing weakening of the Euro (60% of profits arise from activities in Euro denominated countries), adjusted EBITDA has improved from 1999. Basic earnings per ordinary share are 4.9p and adjusted earnings per share in which amortisation of goodwill is added back are 13.9p for the six-month period. It was always forecast that cashflows would be tight in the first year of the new operations. The weakness of the Euro has had a negative influence on the sterling denominated cashflows and, as the directors wish to retain a level of cash to allow greater flexibility, the Board has decided not to propose an interim dividend in line with previous years. It is a requirement of the Alternative Investment Market (AIM) that the ordinary shares of the Company can be traded electronically within the CREST system. Your board has approved the necessary resolution and it is expected that the company's shares will become transferable by means of the CREST system on 20th November, 2000. Further information is provided at the end of this statement. Prospects for the second half remain promising with results to date being broadly in line with those experienced in the first six months. JG Murray Chairman LONDON SECURITIES PLC Consolidated Profit and Loss Account Unaudited 6 Unaudited 6 Audited months to months to year ended 30 June 30 June 31 December 2000 1999 1999 £'000s £'000s £'000s Turnover 19,046 - - Gross rents receivable 1,006 2,006 Cost of sales (3,134) Direct property outgoings - (52) (107) ______ ______ ______ Gross profit/net rents receivable 15,912 954 1,899 Distribution costs (7,842) - - Administrative expenses (5,686) (64) (113) ______ ______ ______ Operating profit 2,384 890 1,786 EBITDA** 4,551 890 1,786 Depreciation (848) - - Amortisation of goodwill (1,319) - - ______ ______ ______ Operating profit 2,384 890 1,786 Income from fixed asset investments 95 - - Profit on sale of property investment - - 1,878 companies Net interest payable (739) (365) (683) Exchange gain on foreign currency - - 25 ______ ______ ______ Profit on ordinary activities before 1,740 525 3,006 taxation Taxation (1,021) (148) (376) ______ ______ ______ Profit on ordinary activities after 719 377 2,630 taxation Dividends - - (102) ______ ______ ______ Retained profit 719 377 2,528 ______ ______ ______ Basic earnings per ordinary share 4.9p 7.4p 50.7p Adjusted earnings per ordinary share 13.9p 7.4p 14.2p (note 2) Dividend per ordinary share Nil Nil 2.0p All of the above results for 1999, excluding the exchange gain on foreign currency, arose from discontinued operations. ** Earnings Before Interest, Taxation, Depreciation and Amortisation LONDON SECURITIES PLC Consolidated Balance Sheet Unaudited Unaudited Audited as at as at as at 31 30 June 30 June December 2000 1999 1999 £'000s £'000s £'000s Fixed assets Intangible assets 51,427 - 52,568 Tangible assets 6,016 19,595 5,843 Investments 70 - 70 ______ ______ ______ 57,513 19,595 58,481 ______ ______ ______ Current assets Stocks 2,851 - 2,421 Debtors 8,414 225 7,622 Cash at bank and in hand 3,236 2,510 3,633 ______ ______ ______ 14,501 2,735 13,676 ______ ______ ______ Creditors: due within one year Finance debt (3,235) (10,075) (3,169) Other creditors (10,349) (1,206) (10,781) ______ ______ ______ (13,584) (11,281) (13,950) ______ _______ ______ Net current assets/(liabilities) 917 (8,546) (274) ______ ______ ______ Total assets less current liabilities 58,430 11,049 58,207 ______ ______ ______ Creditors: due after more than one year Finance debt (18,244) - (19,007) Other creditors (356) - (40) Provisions for liabilities & charges (1,442) - (1,481) ______ ______ ______ (20,042) 0 (20,528) ______ ______ ______ Net assets 38,388 11,049 37,679 ______ ______ ______ Capital and reserves Called up share capital 1,457 512 1,459 Share premium 27,476 3,925 27,476 Capital redemption reserve 107 103 105 Revaluation reserve 8 1,985 - Merger reserve 2,033 2,033 2,033 Profit and loss account 7,307 2,491 6,606 ______ ______ ______ Total equity shareholders' funds 38,388 11,049 37,679 ______ ______ ______ LONDON SECURITIES PLC Consolidated Cashflow Statement Unaudited Unaudited Audited 6 months 6 months year ended to 30 June to 30 June 31 2000 1999 December £'000s £'000s 1999 £'000s Net cash inflow from operating activities 3,118 802 1,291 ______ ______ ______ Return on investments and servicing of finance Interest received 46 56 115 Interest paid (785) (417) (798) Dividends received 95 ______ ______ ______ Net cash outflow from return on (644) (361) (683) investments and servicing of finance ______ ______ ______ Taxation Corporation tax paid (451) - (405) ______ ______ ______ Capital expenditure Payments to acquire tangible fixed assets (1,022) - - Receipts from sales of tangible fixed 197 - - assets ______ ______ ______ Net cash outflow for capital expenditure (825) 0 0 ______ ______ ______ Acquisitions and disposals Payments to acquire subsidiary (273) - (23,910) undertakings Net cash acquired with the purchase of 17 - 3,391 subsidiary undertakings Receipts from sale of subsidiary - - 11,013 undertakings Net cash transferred with the sale of - - (112) subsidiary undertakings ______ ______ ______ Net cash outflow for acquisitions and (256) 0 (9,618) disposals ______ ______ ______ Equity dividends paid to shareholders 0 (102) (102) ______ ______ ______ Net cash inflow/(outflow) before use of 942 339 (9,517) liquid resources and financing ______ ______ ______ Management of liquid resources Decrease in short term deposits with banks 0 - 1,759 ______ ______ ______ Financing Purchase of own shares (62) - (21) New long term loans 181 - 11,000 Repayment of long term loans (1,458) - - ______ ______ ______ Net cash (outflow)/inflow from financing (1,339) 0 10,979 ______ ______ ______ (Decrease)/increase in cash and (397) 339 3,221 equivalents ______ ______ ______ NOTES 1. NATURE OF INFORMATION The financial information contained in this interim statement does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The financial information for the six months ended 30 June 2000 is unaudited and has been prepared on the basis of the accounting policies set out in the Group's 1999 Report and Accounts. Statutory accounts for the period ended 31 December 1999 have been delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain a statement under sections 237(2) or 237(3) of the Companies Act 1985. 2. EARNINGS PER SHARE The calculation of basic earnings per ordinary share is based on the profit on ordinary activities after taxation of £719,000 (1999: £377,000) and on 14,591,162 (1999: 5,120,495) ordinary shares, being the weighted average number of ordinary shares in issue during the period. The calculation of adjusted earnings per ordinary share based on the above weighted average and on adjusted earnings which comprise: Six months Six months Year ended to 30 June to 30 June 31 December 2000 1999 1999 £'000 £'000 Profit on ordinary activities after 719 377 2,630 taxation Eliminate effect of: Profit on disposal of property - - (1,878) investment companies Exchange gain on foreign currency loan - - (25) Amortisation of goodwill 1,319 - - ______ ______ ______ Adjusted earnings 2,038 377 727 ______ ______ ______ 3. ACQUISITIONS During the year the group acquired the entire share capital of Al Protec s.a. and Gremplmayr GmbH at a cost of £273,000. The principal activity of both companies is the provision of fire protection equipment and maintenance services. The acquisitions have been accounted for using the acquisition method of accounting. The net assets acquired were as follows: Book and fair value £'000 Net assets required: Fixed assets 25 Stocks 33 Debtors 157 Cash at bank 17 Creditors (137) ______ Net assets required 95 Goodwill arising on acquisition 178 ______ 273 ______ Purchase price Satisfied by: Bank loan 181 Cash 92 ______ Paid to vendors 273 ______ The companies contributed £13,000 to the group's retained profit for the period. 4. TAXATION The taxation charge for the period (59%) appears high due to the non- deductibility for taxation purposes of the amortisation of goodwill. 5. RESERVES Capital Revaluation Merger Profit Redemption Reserve Reserve and Loss Reserve Account £'000 £'000 £'000 £'000 As at 1 January 2000 105 2,033 6,606 Arising on revaluation of fixed - 8 - - assets Purchase of own shares 2 - - (63) Profit for the period - - - 719 Currency movement - - - 45 ______ ______ ______ ______ As at 30 June 2000 107 8 2,033 7,307 _____ ______ ______ ______ Copies of this statement are being sent to all shareholders and are available to the public from the company's registered office at Wistons Lane, Elland, West Yorkshire, HX5 9DS. PARTICIPATION IN CREST NOTICE TO SHAREHOLDERS Shareholders should note that, in accordance with the Uncertificated Securities Regulations 1995 ('the Regulations'), on 13 September 2000, the Company resolved by a resolution of its directors that title to the ordinary shares of 10 pence each in the capital of the Company, in issue or to be issued, may be transferred by means of a relevant system. The resolution of the directors became effective immediately. The above paragraph contains the notice that the Company is obliged to give to its members, under the Regulations, of the passing of a 'directors' resolution' (as defined in the Regulations) in relation to its ordinary shares to join CREST in due course. The shares have not become transferable by means of the CREST system merely by virtue of the passing of the directors' resolution; the permission of the Operator of the system, CRESTCo Limited, must also be given before the shares can become so transferable. It is anticipated that this will take place on 20 November 2000. The effect of the directors' resolution is to disapply, in relation to the ordinary shares, those provisions of the Company's articles of association that are inconsistent with the holding and transfer of those shares in CREST and any provision of the Regulations, as and when the shares concerned enter the CREST system.

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