Source - LSE Regulatory
RNS Number : 0585N
London Security PLC
27 September 2021
 

 

London Security PLC

 

(the "Group" or "Company")

 

Interim Results for the Six Months Ended 30 June 2021

 

Chairman's Statement

J.G. Murray, Chairman

 

Financial Highlights

 

•     Revenue £82.7m (2020: £67.2m)

•     Operating profit £12.3m (2020: £7.6m)

•     Earnings per share 75.6p (2020: 39.9p)

 

TRADING

The financial highlights illustrate that the Group's revenue increased by £15.5 million (23.1%) to £82.7 million.

Operating profit increased by £4.7 million (61.8%) to £12.3 million.

Earnings per share increased by 35.7p (89.5%) to 75.6p.

The period under review reflects the impact from the coronavirus outbreak, which significantly impacted all the countries in which we operate in quarter 1 and quarter 2 of 2020. In 2021 there has largely been a return to normality in our business although some customers remain closed and there are still some restrictions on our operations to help reduce transmission. We must be prepared for further disruption should further waves materialise in any of the countries in which we operate.

 

ACQUISITIONS

In the six months to the end of June, the Group made four acquisitions. It remains a principal aim of the Group to grow through acquisition.  Acquisitions are being sought throughout Europe and the Group will invest where an adequate return is envisaged by the Board.

 

CASH AND FINANCING

The Group's cash balance as at 30 June 2021 was £43.7 million. This is an increase of £6.2 million on the 31 December 2020 balance of £37.5 million.

In May 2018 the Group entered into a five year multi-currency facility until 2023 comprising £3.15 million and €8.40 million. To limit our exposure to increasing interest rates these loans are subject to interest rate caps of 1.5% LIBOR on the Sterling loan and 0.25% EURIBOR on the Euro loan.

 

PROSPECTS

As the situation continues, cash management will be a key consideration; 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 prosper from the rebound in the economy as the vaccine programmes gain momentum in 2021.

 

DIVIDENDS

A final dividend in respect of 2020 of £0.40 per ordinary share was paid to shareholders on 9 July 2021.

 

 

J.G. Murray

Chairman

27 September 2021

 

 

Consolidated income statement

for the six months ended 30 June 2021

 

 

 

 

Unaudited

Unaudited

Audited

 

 

 

six months

six months

year

 

 

 

ended

ended

ended

 

 

 

30 June

30 June

31 December

 

 

 

2021

2020

2020

 

 

Note

£'000

£'000

£'000

 

Revenue

 

82,739

67,164

152,723

 

Cost of sales

 

(21,601)

(16,452)

(37,387)

 

Gross profit

 

61,138

50,712

115,336

 

Distribution costs

 

(30,188)

(26,310)

(56,281)

 

Administrative expenses

 

(18,670)

(16,768)

(34,355)

 

Operating profit

 

12,280

7,634

24,700

 

EBITDA[*]

 

16,799

11,951

33,547

 

Depreciation and amortisation

 

(4,519)

(4,317)

(8,847)

 

Operating profit

 

12,280

7,634

24,700

 

Finance income

 

21

21

78

 

Finance costs

 

(99)

(96)

(201)

 

Finance costs - net

 

(78)

(75)

(123)

 

Profit before income tax

 

12,202

7,559

24,577

 

Income tax expense

 

(2,862)

(2,602)

(6,536)

 

Profit for the period

 

9,340

4,957

18,041

 

Profit is attributable to

 

 

 

 

 

Equity shareholders of the Company

 

9,267

4,895

17,853

 

Non-controlling interest

 

73

62

188

 

 

 

9,340

4,957

18,041

 

Earnings per share

 

 

 

 

 

Basic and diluted

3

75.6p

39.9p

145.6p

 

Dividends

 

 

 

 

 

Dividends paid per share

 

Nil

Nil

60p

 

* 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 2021

 

 

Unaudited

Unaudited

Audited

 

six months

six months

year

 

ended

ended

ended

 

30 June

30 June

31 December

 

2021

2020

2020

 

£'000

£'000

£'000

Profit for the financial period

9,340

4,957

18,041

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

(2,679)

3,196

2,396

- actuarial gain recognised in the Nu-Swift pension scheme

-

-

(4,554)

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

-

-

1,594

- actuarial loss recognised in the Ansul pension scheme

-

-

(17)

- movement on deferred tax relating to the Ansul pension scheme

-

-

5

Other comprehensive income for the period, net of tax

(2,679)

3,196

(576)

Total comprehensive income for the period

6,661

8,153

17,653

 

 

Consolidated statement of changes in equity

for the six months ended 30 June 2021

 

 

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 2020

123

344

1

2,033

6,442

106,882

349

116,174

Comprehensive income for the period:

 

 

 

 

 

 

 

 

- profit for the period

-

-

-

-

-

4,895

62

4,957

- exchange adjustments

-

-

-

-

3,196

-

-

3,196

Total comprehensive income for the period

-

-

-

-

3,196

4,895

62

8,153

Distribution to non-controlling interest

-

-

-

-

-

-

(159)

(159)

At 30 June 2020

123

344

1

2,033

9,638

111,777

252

124,168

Comprehensive income for the period:

 

 

 

 

 

 

 

 

- profit for the period

-

-

-

-

-

12,958

126

13,084

- exchange adjustments

-

-

-

-

(800)

-

-

(800)

- actuarial loss on pension schemes

-

-

-

-

-

(4,571)

-

(4,571)

- movement on deferred tax relating to pension schemes

-

-

-

-

-

1,599

-

1,599

Total comprehensive income for the period

-

-

-

-

(800)

9,986

126

9,312

Contributions by and distributions to owners of the Company:

 

 

 

 

 

 

 

 

- dividends

-

-

-

-

-

(7,356)

-

(7,356)

Distribution to non-controlling interest

-

-

-

-

-

-

(1)

(1)

At 31 December 2020

123

344

1

2,033

8,838

114,407

377

126,123

Comprehensive income for the period:

 

 

 

 

 

 

 

 

- profit for the period

-

-

-

-

-

9,267

73

9,340

- exchange adjustments

-

-

-

-

(2,679)

-

-

(2,679)

Total comprehensive income for the period

-

-

-

-

(2,679)

9,267

73

6,661

Distribution to non-controlling interest

-

-

-

-

-

-

(28)

(28)

Reduction in non-controlling interest

--

-

-

-

-

(123)

(103)

(226)

At 30 June 2021

123

344

1

2,033

6,159

123,551

319

132,530

 

 

Consolidated statement of financial position

as at 30 June 2021

 

 

Unaudited

Unaudited

Audited

 

as at

as at

as at

 

30 June

30 June

31 December

 

2021

2020

2020

 

£'000

£'000

£'000

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

13,634

13,308

13,046

Right-of-use assets

3,223

2,382

3,254

Intangible assets

66,009

67,502

66,311

Deferred tax asset

799

779

790

Retirement benefit surplus

445

4,959

445

 

84,110

88,930

83,846

Current assets

 

 

 

Inventories

15,861

15,182

14,953

Trade and other receivables

30,415

32,499

33,174

Cash and cash equivalents

43,678

34,422

37,456

 

89,954

82,103

85,583

Total assets

174,064

171,033

169,429

Liabilities

 

 

 

Current liabilities

 

 

 

Trade and other payables

(27,110)

(29,119)

(27,582)

Income tax liabilities

(2,300)

(2,311)

(2,074)

Borrowings

(2,397)

(2,139)

(2,518)

Lease liabilities

(1,376)

(1,169)

(1,451)

Provision for liabilities and charges

-

-

(16)

 

(33,183)

(34,738)

(33,641)

Non-current liabilities

 

 

 

Trade and other payables

(923)

(1,275)

(941)

Borrowings

(2,051)

(4,270)

(3,170)

Lease liabilities

(1,851)

(1,209)

(1,851)

Derivative financial instruments

(28)

(43)

(36)

Deferred income tax liabilities

(1,081)

(2,873)

(1,146)

Retirement benefit obligations

(2,249)

(2,282)

(2,349)

Provision for liabilities and charges

(168)

(175)

(172)

 

(8,351)

(12,127)

(9,665)

Total liabilities

(41,534)

(46,865)

(43,306)

Net assets

132,530

124,168

126,123

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

6,159

9,638

8,838

Retained earnings

123,551

111,777

114,407

Equity attributable to owners of the Parent Company

132,211

123,916

125,746

Non-controlling interest

319

252

377

Total equity

132,530

124,168

126,123

 

 

Consolidated statement of cash flow

for the six months ended 30 June 2021

 

 

Unaudited

Unaudited

Audited

 

six months

six months

year

 

ended

ended

ended

 

30 June

30 June

31 December

 

2021

2020

2020

 

£'000

£'000

£'000

Cash flows from operating activities

 

 

 

Cash generated from operations

20,342

12,319

32,862

Interest paid

(61)

(66)

(118)

Income tax paid

(4,687)

(2,323)

(5,524)

Net cash generated from operating activities

15,594

9,930

27,220

Cash flows from investing activities

 

 

 

Acquisition of subsidiary undertakings

(1,496)

-

(516)

Purchases of property, plant and equipment

(2,977)

(2,344)

(5,063)

Proceeds from sale of property, plant and equipment

384

137

462

Purchases of intangible assets

(1,644)

(969)

(1,244)

Interest received

13

17

27

Net cash used in investing activities

(5,720)

(3,159)

(6,334)

Cash flows from financing activities

 

 

 

Repayments of borrowings

(1,071)

(1,015)

(2,121)

Payment of lease liabilities

(1,097)

(987)

(2,036)

Dividends paid to Company's shareholders

-

-

(7,356)

Distribution to non-controlling interest

(28)

(159)

(160)

Net cash used in financing activities

(2,196)

(2,161)

(11,673)

Net increase in cash in the period

7,678

4,610

9,213

Cash and cash equivalents at the beginning of the period

37,456

27,143

27,143

Effects of exchange rates on cash and cash equivalents

(1,456) 

           2,669

 1,100

Cash and cash equivalents at the end of the period

43,678

34,422

37,456

 

 

 

Notes to the financial statements

for the six months ended 30 June 2021

 

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 2021 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 2020. 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 2020 have been extracted from the statutory accounts for the year ended 31 December 2020, 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 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 £9,267,000 (2020: £4,895,000) and on 12,261,477 (2020: 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

 

2021

2020

2020

 

£'000

£'000

£'000

Profit on ordinary activities after taxation

9,267

4,895

17,853

Basic earnings per ordinary share

75.6p

39.9p

145.6p

 

 

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 2021. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2021.

 

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No. 596/2014, and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

 

For further information, please contact:

 

London Security plc

Richard Pollard

Company Secretary                                                                             Tel : 01422 372852

 

WH Ireland Limited

Chris Fielding                                                                                       Tel : 0207 220 1666

Ben Good

 

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