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London Security PLC  -  LSC   

Final Results

Released 07:00 27-Apr-2017

RNS Number : 4637D
London Security PLC
27 April 2017
 

London Security plc

Final Results for the Year Ended 31 December 2016

 

CHAIRMAN'S STATEMENT

 

FINANCIAL HIGHLIGHTS

Financial highlights of the audited results for the year ended 31 December 2016 compared with the year ended 31 December 2015 are as follows:

·      revenue of £114.8 million (2015: £101.2 million);

·      operating profit before depreciation and amortisation of £26.3 million (2015: £23.2 million);

·      operating profit of £20.9 million (2015: £18.5 million);

·      profit after income tax of £13.8 million (2015: £12.3 million); and

·      a dividend per share of £0.80 (2015: £0.68).

TRADING REVIEW

The financial highlights illustrate that the Group's revenue increased by £13.6 million (13.4%) to £114.8 million. However, these results are impacted by the movement in the Euro to Sterling average exchange rate, which has decreased from 1.38 to 1.23. This movement in exchange rate had a favourable effect of £9.8 million on reported revenue. If the 2016 results had been translated at 2015 rates, revenue would have been £105.0 million instead of £114.8 million (increase of 3.8% on prior year).

Operating profit increased by £2.4 million (13.0%) to £20.9 million. Adjusting for the change in the exchange rate on the same basis as above, operating profit would have been £18.7 million instead of £20.9 million (increase of 1.1%). A more detailed review of this year's performance is given in the Financial Review and the Strategic Report.

ACQUISITIONS

It remains a principal aim of the Group to grow through acquisition.  Acquisitions are being sought throughout Europe and the Group will invest at prices where an adequate return is envisaged by the Board. In the year under review the Group has consolidated its presence in Belgium, the Netherlands and the UK with the acquisitions of service contracts from 15 smaller well established businesses for integration into the Group's existing subsidiaries. In addition, with the acquisition of One Protect in France and Ludwig in Germany the Group has expanded its business into two new countries.

MANAGEMENT AND STAFF

2016 was a year in which the staff performed well and, on your behalf, I would like to express thanks and appreciation for their contribution. The Group recognises that we can only achieve our aims with talented and dedicated colleagues who provide outstanding customer service in every area of the business.

DIVIDENDS

A final dividend in respect of 2015 of £0.40 per ordinary share was paid to shareholders on 8 July 2016. An interim dividend in respect of 2016 of £0.40 per ordinary share was paid to shareholders on 8 December 2016. The Board is recommending the payment of a final dividend in respect of 2016 of £0.40 per ordinary share to be paid on 5 July 2017 to shareholders on the register on 9 June 2017. The shares will be marked ex-dividend on 8 June 2017.

FUTURE PROSPECTS

We are experiencing increased competition in our core market and customer care is becoming increasingly important. To retain our valued customers we need to strive to serve them at the highest possible level. We do not expect the economic environment to get any easier in 2017. Nonetheless your Group remains in a strong position and will continue to focus on meeting the needs of our customers and our shareholders.

ANNUAL GENERAL MEETING

The Annual General Meeting will be held at 2 Eaton Gate, London SW1W 9BJ on 21 June 2017 at 2 pm.  You will find enclosed a form of proxy for use at that Meeting which you are requested to complete and return in accordance with the instructions on the form.  Your Directors look forward to meeting you at that time.

J.G. Murray

Chairman

27 April 2017

 

 

Consolidated income statement

for the year ended 31 December 2016

 

 

 

2016

2015

 

 

 

Note

£'000

£'000

 

 

Revenue


114,845

101,165

 

 

Cost of sales


(23,638)

(20,373)

 

 

Gross profit


91,207

80,792

 

 

Distribution costs


(42,191)

(37,304)

 

 

Administrative expenses


(28,154)

(25,010)

 

 

Operating profit


20,862

18,478

 

EBITDA*


26,321

23,191

Depreciation and amortisation


(5,459)

(4,713)

Operating profit


20,862

18,478

 

Finance income


176

179

 

 

Finance costs


(433)

(446)

 

 

Finance costs - net

 

(257)

(267)

 

 

Profit before income tax

 

20,605

18,211

 

 

Income tax expense

 

(6,822)

(5,942)

 

 

Profit for the year attributable to equity shareholders of the Company


13,783

12,269

 

 

Earnings per share




 

 

Basic and diluted

1

112.4p

100.1p

 

* Earnings before interest, tax, depreciation and amortisation.

 

The above results are all as a result of continuing operations.

 

Consolidated statement of comprehensive income

for the year ended 31 December 2016

 

 

2016

2015

 

 

£'000

£'000

Profit for the financial year


13,783

12,269

Other comprehensive income/(expense):




Items that may be reclassified subsequently to profit or loss:




- currency translation differences on foreign currency net investments


4,441

(1,168)

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




- actuarial gain/(loss) recognised in the Nu-Swift pension scheme

 

263

(406)

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

 

(92)

142

- actuarial (loss)/gain recognised in the Ansul pension scheme

 

(200)

163

- movement on deferred tax relating to Ansul pension scheme deficit

 

61

(56)

Other comprehensive income/(expense) for the year, net of tax


4,473

(1,325)

Total comprehensive income for the year


18,256

10,944

 

 



 

Consolidated statement of changes in equity

for the year ended 31 December 2016

 

 

Share

Capital

 

 

 

 

 

Share

premium

redemption

Merger

Other

Retained

Total

 

capital

account

reserve

reserve

reserve

earnings

equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2015

123

344

1

2,033

3,758

79,157

85,416

Total comprehensive income for the year








Profit for the financial year

-

-

-

-

-

12,269

12,269

Other comprehensive (expense)/income:








- exchange adjustments

-

-

-

-

(1,168)

-

(1,168)

- actuarial loss on pension schemes

-

-

-

-

-

(243)

(243)

- net movement on deferred tax relating to pension asset

                -

-

-

-

-

86

86

Total comprehensive income for the year

                -

-

-

-

(1,168)

12,112

10,944

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 and 1 January 2016

123

344

1

2,033

2,590

82,932

88,023

Total comprehensive income for the year








Profit for the financial year

-

-

-

-

-

13,783

13,783

Other comprehensive income/(expense):








- exchange adjustments

-

-

-

-

4,441

-

4,441

- actuarial gain on pension schemes

-

-

-

-

-

63

63

- net movement on deferred tax relating to pension asset

                -

-

-

-

-

(31)

(31)

Total comprehensive income for the year

-

-

-

-

4,441

13,815

18,256

Contributions by and distributions to owners of the Company:

- dividends

-

-

-

-

-

(9,808)

(9,808)

- release of accrual for unclaimed dividends

-

-

-

-

-

82

82

Total contributions by and distributions to owners of the Company

-

-

-

-

-

(9,726)

(9,726)

At 31 December 2016

123

344

1

2,033

7,031

87,021

96,553

 

The merger reserve is not a distributable reserve. The other reserve relates entirely to the effects of changes in foreign currency exchange rates.

 



 

Consolidated statement of financial position

as at 31 December 2016

 

 

2016

2015

 

 

£'000

£'000

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

 

10,937

9,789

Intangible assets

 

62,749

60,594

Deferred tax asset

 

919

690

Retirement benefit surplus

 

3,574

3,196

 

 

78,179

74,269

Current assets

 

 

 

Inventories

 

11,095

9,689

Trade and other receivables

 

23,138

19,901

Cash and cash equivalents

 

22,602

19,736

 

 

56,835

49,326

Total assets

 

135,014

123,595

Liabilities

 

 

 

Current liabilities

 

 

 

Trade and other payables

 

(19,344)

(16,666)

Income tax liabilities

 

(1,180)

(1,335)

Borrowings

 

(1,870)

(1,679)

Provision for liabilities and charges

 

(35)

(35)

 

 

(22,429)

(19,715)

Non-current liabilities

 

 

 

Trade and other payables

 

(957)

(669)

Borrowings

 

(10,789)

(11,417)

Derivative financial instruments

 

(172)

(190)

Deferred tax liabilities

 

(1,705)

(1,696)

Retirement benefit obligations

 

(2,279)

(1,684)

Provision for liabilities and charges

 

(130)

(201)

 

 

(16,032)

(15,857)

Total liabilities

 

(38,461)

(35,572)

Net assets

 

96,553

88,023

Shareholders' equity

 

 

 

Ordinary shares

 

123

123

Share premium

 

344

344

Capital redemption reserve

 

1

1

Merger reserve

 

2,033

2,033

Other reserves

 

7,031

2,590

Retained earnings

 

87,021

82,932

Total shareholders' equity

 

96,553

88,023

 

 

 

 

 

 

 



 

Consolidated statement of cash flow

for the year ended 31 December 2016

 

 

2016

2015

 

 

£'000

£'000

Cash flows from operating activities




Cash generated from operations


26,059

20,215

Interest paid


(408)

(425)

Income tax paid


(7,213)

(5,889)

Net cash generated from operating activities


18,438

13,901

Cash flows from investing activities




Acquisition of subsidiary undertakings (net of cash acquired)


(2,222)

(1,301)

Purchases of property, plant and equipment


(2,774)

(2,363)

Proceeds from sale of property, plant and equipment


323

236

Purchases of intangible assets


(1,662)

(974)

Interest received


43

27

Net cash used in investing activities


(6,292)

(4,375)

Cash flows from financing activities




Repayments of borrowings


(1,819)

(1,663)

Dividends paid to Company's shareholders


(9,726)

(8,337)

Net cash used in financing activities


(11,545)

(10,000)

Effects of exchange rates on cash and cash equivalents


2,265

(768)

Net increase/(decrease) in cash in the year


2,866

(1,242)

Cash and cash equivalents at the beginning of the year


19,736

20,978

Cash and cash equivalents at end of the year


22,602

19,736

 

 



 

Notes to the financial statements

for the year ended 31 December 2016

 

1 Earnings per share

The calculation of basic earnings per ordinary share ("EPS") is based on the profit on ordinary activities after taxation of £13,783,000 (2015: £12,269,000) and on 12,261,477 (2015: 12,261,477) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

For diluted EPS, the weighted average number of shares in issue is adjusted to assume conversion of all dilutive potential 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.

 

2016

 

2015

 

£'000

Pence

 

£'000

Pence

Profit on ordinary activities after taxation

13,783

112.4


12,269

100.1

 

2 This preliminary announcement does not constitute the Company's statutory accounts within the meaning of Section 434 of the Companies Act 2006.

The results for the year ended 31 December 2016 have been extracted from the full accounts of the Group for that year which received an unqualified auditor's report and which have not yet been delivered to the Registrar of Companies.  The financial information for the year ended 31 December 2015 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The report of the auditor on those filed accounts was unqualified.  The accounts for the year ended 31 December 2016 and 31 December 2015 did not contain a statement under s498 (1) to (4) of the Companies Act 2006 or under s237(1) to (4) of the Companies Act 1985.

This preliminary announcement has been prepared in accordance with International Financial Reporting Standards. The Group will post its annual report and accounts to shareholders on 11 May 2016. A copy of the annual report and accounts can be found on the company's webpage (www.londonsecurity.org).

 

Enquiries

London Security plc


Richard Pollard

Company Secretary

Tel: 01422 372 852



WH Ireland Limited


Chris Fielding

Tel: 0207 220 1666





 

 


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