Interim results for six months ended 30 June 2023

London Security PLC
22 September 2023
 

London Security PLC

 

(the "Group" or "Company")

 

Interim results for the six months ended 30 June 2023

 

 

 

Chairman's statement

J.J. Murray, Chairman

Financial Highlights

•     Revenue £108.8m (2022: £88.6m)

•     Operating profit £13.7m (2022: £10.9m)

•     Earnings per share 81.0p (2022: 68.3p)

 

Trading

The financial highlights illustrate that the Group's revenue increased by £20.2 million (22.8%) to £108.8 million.

Operating profit increased by £2.8 million (25.7%) to £13.7 million. This increase is partly attributed to the Group being able to recruit more direct staff.  This enabled us to address delayed inspections in the period, in turn delivering a non-recurring benefit to the business' revenue and profit.

These results reflect the favourable movement in the Euro to Sterling average exchange rate, which has decreased from 1.19 to 1.14. If the 2023 results from the European subsidiaries had been translated at 2022 rates, revenue would have been £105.2 million instead of £108.8 million, which would have represented an increase of 18.7% on the prior year. On the same basis, operating profit would have been £13.1 million instead of £13.7 million, an increase of 20.2% compared to 2022.

The period under review also reflects the impact from upward input price pressures in all of the countries in which we operate. These increases are being driven by worldwide supply chain disruption and energy and wage inflation following the recovery from the coronavirus pandemic and the war in Ukraine. These supply price increases have been passed on to our customers where possible.

Acquisitions

In the six months to the end of June, at an aggregate cost of £2.5 million, the Group acquired two companies in Belgium, and it strengthened its presence in Germany and the United Kingdom through the acquisition of service contracts which have been integrated into the Group's existing subsidiaries.

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.

Cash and financing

The Group's cash balance as at 30 June 2023 was £33.2 million. This is a decrease of £0.8 million on the 31 December 2022 balance of £34.0 million.

Prospects

Cash management is a key consideration in difficult economic times. The London Security Group has a healthy balance sheet, strong cash reserves and a track record for good cash generation. The Board therefore considers that with its strong balance sheet and material net cash position the Group is well placed to cope with any economic downturn.

Dividends

A final dividend in respect of 2022 of £0.42 per ordinary share was paid to shareholders on 7 July 2023.

J.J. Murray

Chairman

22 September 2023



 

Consolidated income statement

for the six months ended 30 June 2023




Unaudited

Unaudited

Audited




six months

six months

year




ended

ended

ended




30 June

30 June

31 December




2023

2022

2022


 

Note

£'000

£'000

£'000


Revenue


108,845

88,613

188,898


Cost of sales

 

(29,452)

(23,380)

(49,748)


Gross profit


79,393

65,233

139,150


Distribution costs


(41,304)

(33,937)

(70,565)


Administrative expenses

 

(24,357)

(20,394)

(41,420)

 

Operating profit

 

13,732

10,902

27,165


EBITDA*


19,009

15,742

37,269

 

Depreciation and amortisation

 

(5,277)

(4,840)

(10,104)

 

Operating profit

 

13,732

10,902

27,165


Finance income


5

1

31


Finance costs

 

(110)

(100)

(242)


Finance costs - net

 

(105)

(99)

(211)


Profit before income tax


13,627

10,803

26,954


Income tax expense

 

(3,692)

(2,423)

(6,742)


Profit for the period

 

9,935

8,380

20,212


Profit is attributable to:






Equity shareholders of the Company


9,935

8,374

20,203


Non-controlling interest

 

-

6

9


 

 

9,935

8,380

20,212


Earnings per share






Basic and diluted

3

81.0p

68.3p

164.8p


Dividends






Dividends paid per share

 

Nil

Nil

84p

 

* 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 2023


Unaudited

Unaudited

Audited


six months

six months

year


ended

ended

ended


30 June

30 June

31 December


2023

2022

2022

 

£'000

£'000

£'000

Profit for the financial period

9,935

8,380

20,203

Other comprehensive income/(expense):




Items that will not be reclassified subsequently to profit or loss:




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

(2,851)

1,087

3,602

- actuarial gain recognised in the Nu-Swift pension scheme

-

-

(111)

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

-

-

38

- actuarial loss recognised in the Ansul pension scheme

-

-

1,249

- movement on deferred tax relating to the Ansul pension scheme

-

-

(285)

Other comprehensive income for the period, net of tax

(2,851)

1,087

4,493

Equity shareholders of the Company

7,084

9,467

24,696

 Non-controlling interest

-

-

9

Total comprehensive income for the period

7,084

9,467

24,705

 



 

Consolidated statement of changes in equity

for the six months ended 30 June 2023


Share

Share

Capital

Merger

Other

Retained

Non-controlling



capital

premium

redemption

reserve

reserve

earnings

interest

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2022

123

344

1

2,033

5,056

124,072

118

131,747

Comprehensive income for the period:









- profit for the period

-

-

-

-

-

8,374

6

8,380

- exchange adjustments

-

-

-

-

1,087

-

-

1,087

Total comprehensive income for the period

-

-

-

-

1,087

8,374

6

9,467

At 30 June 2022

123

344

1

2,033

6,143

132,446

124

141,214

Comprehensive income for the period:









- profit for the period

-

-

-

-

-

11,829

3

11,832

- exchange adjustments

-

-

-

-

2,515

-

-

2,515

- actuarial gain on pension schemes

-

-

-

-

-

1,138

-

1,138

- movement on deferred tax relating to pension schemes

-

-

-

-

-

(247)

-

(247)

Total comprehensive income for the period

-

-

-

-

2,515

12,720

3

15,238

Contributions by and distributions to owners of the Company:









- dividends

-

-

-

-

-

(10,298)

-

(10,298)

Purchase of own shares

-

-

-

-

-

(13)

-

(13)

Reduction in non-controlling interest

-

-

-

-

-

(158)

(127)

(285)

At 31 December 2022

123

344

1

2,033

8,658

134,697

-

145,856

Comprehensive income for the period:









- profit for the period

-

-

-

-

-

9,935

-

9,935

- exchange adjustments

-

-

-

-

(2,851)

-

-

(2,851)

Total comprehensive income for the period

-

-

-

-

(2,851)

9,935

-

7,084

Purchase of own shares

-

-

-

-

-

(30)

-

(30)

At 30 June 2023

123

344

1

2,033

5,807

144,602

-

152,910

 



 

Consolidated statement of financial position

as at 30 June 2023


Unaudited

Unaudited

Audited


as at

as at

as at


30 June

30 June

31 December


2023

2022

2022

 

£'000

£'000

£'000

Assets




Non-current assets




Property, plant and equipment

16,430

14,186

14,940

Right-of-use assets

5,531

5,297

5,975

Intangible assets

77,848

73,643

77,076

Deferred tax asset654

654

814

694

Retirement benefit surplus

276

380

276

 

100,739

94,320

98,961

Current assets




Inventories

22,934

18,326

22,260

Trade and other receivables

43,907

37,800

40,699

Cash and cash equivalents

33,206

35,256

33,962

 

100,047

91,382

96,921

Total assets

200,786

185,702

195,882

Liabilities




Current liabilities




Trade and other payables

(35,902)

(30,336)

(36,431)

Income tax liabilities

(1,448)

(564)

(1,440)

Borrowings

(344)

(2,437)

(1,598)

Lease liabilities

(1,228)

(1,722)

(2,040)

Derivative financial instruments

-

(20)

-

Provision for liabilities and charges

(9)

(14)

(10)

 

(38,931)

(35,093)

(41,519)

Non-current liabilities




Trade and other payables

(1,016)

(1,033)

(936)

Borrowings

(228)

(431)

(236)

Lease liabilities

(4,417)

(3,627)

(4,033)

Deferred income tax liabilities

(2,213)

(1,982)

(2,211)

Retirement benefit obligations

(921)

(2,180)

(953)

Provision for liabilities and charges

(150)

(142)

(138)

 

(8,945)

(9,395)

(8,507)

Total liabilities

(47,876)

(44,488)

(50,026)

Net assets

152,910

141,214

145,856

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

5,807

6,143

8,658

Retained earnings

144,602

132,446

134,697

Equity attributable to owners of the Parent Company

152,910

141,090

145,856

Non-controlling interest

-

124

-

Total equity

152,910

141,214

145,856

 



 

Consolidated statement of cash flow

for the six months ended 30 June 2023


Unaudited

Unaudited

Audited


six months

six months

year


ended

ended

ended


30 June

30 June

31 December


2023

2022

2022

 

£'000

£'000

£'000

Cash flows from operating activities




Cash generated from operations

14,608

13,501

30,489

Interest paid

(39)

(50)

(111)

Income tax paid

(4,737)

(5,617)

(7,055)

Net cash generated from operating activities

9,832

7,834

23,323

Cash flows from investing activities




Acquisition of subsidiary undertakings

(2,522)

(3,058)

(4,078)

Purchases of property, plant and equipment

(4,164)

(1,923)

(4,626)

Proceeds from sale of property, plant and equipment

273

380

730

Purchases of intangible assets

(902)

(1,661)

(3,193)

Interest received

5

1

4

Net cash used in investing activities

(7,310)

(6,261)

(11,163)

Cash flows from financing activities




Repayments of borrowings

(1,173)

(1,332)

(2,312)

Payment of lease liabilities

(1,250)

(1,057)

(2,356)

Dividends paid to Company's shareholders

-

-

(10,298)

Purchase of own shares

(30)

-

(13)

Reduction in non-controlling interest

-

-

(285)

Net cash used in financing activities

(2453)

(2,389)

(15,264)

Net (decrease)/increase in cash in the period

69

(816)

(3,104)

Cash and cash equivalents at the beginning of the period

33,962

35,681

35,681

Effects of exchange rates on cash and cash equivalents

(825)

391

1,385

Cash and cash equivalents at the end of the period

33,206

35,256

33,962

 



 

Notes to the financial statements

for the six months ended 30 June 2023

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 2023 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 2022. 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 2022 have been extracted from the statutory accounts for the year ended 31 December 2022, 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 and 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 £9,935,000 (2022: £8,374,000) and on 12,260,684 (2022: 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


2023

2022

2022

 

£'000

£'000

£'000

Profit on ordinary activities after taxation

9,935

8,374

20,212

Basic earnings per ordinary share

81.0p

68.3p

164.8p

 

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 2023. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2023.

 

The person responsible for arranging the release of this announcement on behalf of the Company is Richard Pollard, Company Secretary of London Security plc.

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

 

For further information, please contact:

 

London Security plc

Richard Pollard

Company Secretary                                                                            Tel : 01422 372852

 

WH Ireland Limited

Chris Fielding                                                                                       Tel : 0207 220 1666

 

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
UK 100

Latest directors dealings