Source - RNS
RNS Number : 8355K
London Security PLC
26 September 2016
 

Chairman's statement

 

 

Financial highlights

Revenue

£56.3m

2015: £50.2m

Operating profit

£9.3m

2015: £7.9m

 

TRADING

The financial highlights illustrate that the Group's revenue increased by £6.1 million (12.2%) to £56.3 million. However, these results are impacted by the movement in the Euro to Sterling average exchange rate which has decreased from 1.36 to 1.28. This movement in exchange rates had a positive effect of £2.5 million on reported turnover. If the 2016 results had been translated at 2015 rates, revenue would have been £53.7 million instead of £56.3 million, an adjusted increase of 7.0%. This revenue increase can be attributed to acquisition activity (£1.1 million) and improved organisation of work which results in services being performed earlier in the year.

Operating profit increased by £1.4 million (17.7%) to £9.3 million. Adjusting for the change in exchange rates on the same basis as above, operating profit would have been £8.8 million instead of £9.3 million (an adjusted increase of 11.4%). Operating profit as a percentage of turnover has risen from 15.7% to 16.5% as fixed costs, largely of an administrative nature, have been spread over increased turnover.

 

ACQUISITIONS

In the six months to the end of June, the Group has acquired a total of seven well established businesses at a cost of £1.7 million (2015: six businesses at a cost of £1.4 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

The fire security market is experiencing increased competition and downward pressure on prices. Our strategy is to continue to concentrate on the highest levels of customer service to mitigate this. The Board is optimistic for further success in 2016.

 

DIVIDENDS

A final dividend in respect of 2015 of £0.40 per ordinary share was paid to shareholders on 8 July 2016.

 

 

 

 

 

 

J.G. Murray

Chairman

26 September 2016

Consolidated income statement

for the six months ended 30 June 2016

 

 

 

Unaudited

Unaudited

Audited

 

 

six months

six months

year

 

 

ended

ended

ended

 

 

30 June

30 June

31 December

 

 

2016

2015

2015

 

Note

£'000

£'000

£'000

Revenue

 

56,295

50,191

101,165

Cost of sales

 

(12,053)

(10,105)

(20,373)

Gross profit

 

44,242

40,086

80,792

Distribution costs

 

(20,765)

(19,297)

(37,304)

Administrative expenses

 

(14,152)

(12,872)

(25,010)

Operating profit

 

9,325

7,917

18,478

EBITDA*

 

11,926

10,341

23,191

Depreciation and amortisation

 

(2,601)

(2,424)

(4,713)

Operating profit

 

9,325

7,917

18,478

Finance income

 

19

84

179

Finance costs

 

(258)

(208)

(446)

Finance costs - net

 

(239)

(124)

(267)

Profit before income tax

 

9,086

7,793

18,211

Income tax expense

 

(2,999)

(2,561)

(5,942)

Profit for the period attributable to equity shareholders of the Company

6,087

5,232

12,269

Earnings per share

 

 

 

 

Basic and diluted

3

49.6p

42.7p

100.1p

Dividends

 

 

 

 

Dividends paid per share

 

Nil

Nil

68.0p

 

* 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 2016

 

 

Unaudited

Unaudited

Audited

 

six months

six months

year

 

ended

ended

ended

 

30 June

30 June

31 December

 

2016

2015

2015

 

£'000

£'000

£'000

Profit for the financial period

6,087

5,232

12,269

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

3,503

(2,194)

(1,168)

- actuarial gain recognised in the Nu-Swift pension scheme

-

-

(406)

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

-

-

142

- actuarial loss recognised in the Ansul pension scheme

-

-

163

- movement on deferred tax relating to the Ansul pension scheme

-

-

(56)

Other comprehensive expense for the period, net of tax

3,503

(2,194)

(1,325)

Total comprehensive income for the period

9,590

3,038

10,944



 

Consolidated statement of changes in equity

for the six months ended 30 June 2016

 

 






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 2015

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

Comprehensive income for the period








- profit for the period

-

-

-

-

-

7,037

7,037

- exchange adjustments

-

-

-

-

1,026

-

1,026

- actuarial loss on pension schemes

-

-

-

-

-

(243)

(243)

- movement on deferred tax relating to pension schemes

-

-

-

-

-

86

86

Total comprehensive income for the period

-

-

-

-

1,026

6,880

7,906

Contributions by and distributions to owners of the Company








- dividends

-

-

-

-

-

(8,337)

(8,337)

Total contributions by and distributions to owners of the Company

-

-

-

-

-

(8,337)

(8,337)

At 31 December 2015

123

344

1

2,033

2,590

82,932

88,023

Comprehensive income for the period








- profit for the period

-

-

-

-

 

6,087

6,087

- exchange adjustments

-

-

-

-

3,503

-

3,503

Total comprehensive income for the period

-

-

-

-

3,503

6,087

9,590

At 30 June 2016

123

344

1

2,033

6,093

89,019

97,613



 

Consolidated statement of financial position

as at 30 June 2016

 

 

Unaudited

Unaudited

Audited

 

as at

as at

as at

 

30 June

30 June

31 December

 

2016

2015

2015

 

£'000

£'000

£'000

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

10,596

9,335

9,789

Intangible assets

62,358

60,603

60,594

Deferred tax asset

787

699

690

Retirement benefit surplus

3,196

3,283

3,196

 

76,937

73,920

74,269

Current assets

 

 

 

Inventories

11,166

8,885

9,689

Trade and other receivables

23,707

19,953

19,901

Cash and cash equivalents

25,997

22,696

19,736

 

60,870

51,534

49,326

Total assets

137,807

125,454

123,595

Liabilities

 

 

 

Current liabilities

 

 

 

Trade and other payables

(21,168)

(18,279)

(16,666)

Income tax liabilities

(839)

(636)

(1,335)

Borrowings

(1,836)

(1,659)

(1,679)

Provision for liabilities and charges

(35)

-

(35)

 

(23,878)

(20,574)

(19,715)

Non-current liabilities

 

 

 

Trade and other payables

(803)

(703)

(669)

Borrowings

(11,519)

(11,965)

(11,417)

Derivative financial instruments

(244)

(163)

(190)

Deferred income tax liabilities

(1,649)

(1,667)

(1,696)

Retirement benefit obligations

(1,909)

(1,687)

(1,684)

Provision for liabilities and charges

(192)

(241)

(201)

 

(16,316)

(16,426)

(15,857)

Total liabilities

(40,194)

(37,000)

(35,572)

Net assets

97,613

88,454

88,023

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

6,093

1,564

2,590

Retained earnings

89,019

84,389

82,932

Total shareholders' equity

97,613

88,454

88,023



 

Consolidated statement of cash flow

for the six months ended 30 June 2016

 

 

Unaudited

Unaudited

Audited

 

six months

six months

year

 

ended

ended

ended

 

30 June

30 June

31 December

 

2016

2015

2015

 

£'000

£'000

£'000

Cash flows from operating activities




Cash generated from operations

14,436

9,865

20,215

Interest paid

(204)

(208)

(425)

Income tax paid

(4,391)

(3,560)

(5,889)

Net cash generated from operating activities

9,841

6,097

13,901

Cash flows from investing activities




Acquisition of subsidiary undertakings

(1,324)

(902)

(1,301)

Purchases of property, plant and equipment

(1,333)

(1,125)

(2,363)

Proceeds from sale of property, plant and equipment

168

91

236

Purchases of intangible assets

(2,024)

(373)

(974)

Interest received

19

20

27

Net cash used in investing activities

(4,494)

(2,289)

(4,375)

Cash flows from financing activities




Repayments of borrowings

(869)

(844)

(1,663)

Dividends paid to Company's shareholders

-

-

(8,337)

Net cash used in financing activities

(869)

(844)

(10,000)

Effects of exchange rates on cash and cash equivalents

1,783

(1,246)

(768)

Net increase/(decrease) in cash in the period

6,261

1,718

(1,242)

Cash and cash equivalents at the beginning of the period

19,736

20,978

20,978

Cash and cash equivalents at end of the period

25,997

22,696

19,736

 

 



 

Notes to the financial statements

for the six months ended 30 June 2016

 

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 2016 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 2015. 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 2015 have been extracted from the statutory accounts for the year ended 31 December 2015, 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 andincome 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 £6,087,000 (2015: £5,232,000) and on 12,261,477 (2015: 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

 

2016

2015

2015

 

£'000

£'000

£'000

Profit on ordinary activities after taxation

6,087

5,232

12,269

Basic earnings per ordinary share

49.6p

42.7p

100.1p

 

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 2016. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2016.

 

For further information, please contact:

 

London Security plc

Richard Pollard

Company Secretary                                                                            Tel : 01422 372852

 

WH Ireland Limited

Liam Gribben                                                                                       Tel : 0113 394 6600

                                                               


 


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