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London Security PLC  -  LSC   

Final Results for the Year Ended 31 December 2017

Released 07:00 04-May-2018

RNS Number : 0834N
London Security PLC
04 May 2018
 

London Security plc

 

Final Results for the Year Ended 31 December 2017

 

Chairman's statement

 

Financial highlights

Financial highlights of the audited results for the year ended 31 December 2017 compared with the year ended 31 December 2016 are as follows:

·     revenue of £125.9 million (2016: £114.8 million);

·     EBITDA of £27.9 million (2016: £26.3 million);

·     operating profit of £21.7 million (2016: £20.9 million);

·     profit for the year of £14.3 million (2016: £13.8 million); and

·     a dividend per share of £0.80 (2016: £0.80).

Trading review

The financial highlights illustrate that the Group's revenue increased by £11.1 million (9.7%) to £125.9 million. However, these results are impacted by the movement in the Euro to Sterling average exchange rate, which has decreased from 1.23 to 1.14. This movement in exchange rate had a favourable effect of £7.3 million on reported revenue. If the 2017 results had been translated at 2016 rates, revenue would have been £118.6 million instead of £125.9 million (increase of 3.3% on the prior year).

Operating profit increased by £0.8 million (3.8%) to £21.7 million. Adjusting for the change in the exchange rate on the same basis as above, operating profit would have been £20.2 million instead of £21.7 million (decrease of 3.3%). 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 the Netherlands, Germany and the UK with the acquisitions of service contracts from nine smaller well-established businesses for integration into the Group's existing subsidiaries. In addition, the Group has taken a 75% interest in a further business in the United Kingdom which will allow us to bring in house a partner with which we have previously subcontracted.

Management and staff

2017 was a year in which the staff performed well and, on behalf of the shareholders, 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.

Michael Gailer

Following a short illness Michael Gailer sadly passed away on 5 March 2018. Michael had provided wise counsel to the Company for over 19 years. Michael will be deeply missed by his fellow Directors and our thoughts and condolences are with his family at this difficult time.

 

Dividends

A final dividend in respect of 2016 of £0.40 per ordinary share was paid to shareholders on 5 July 2017. An interim dividend in respect of 2017 of £0.40 per ordinary share was paid to shareholders on 7 December 2017. The Board is recommending the payment of a final dividend in respect of 2017 of £0.40 per ordinary share to be paid on 5 July 2018 to shareholders on the register on 8 June 2018. The shares will be marked ex-dividend on 7 June 2018.

Future prospects

The Group will continue to grow and consolidate the fire protection industry with the finest customer care.

Annual General Meeting

The Annual General Meeting will be held at 2 Eaton Gate, London SW1W 9BJ, on 20 June 2018 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

3 May 2018

 

Consolidated income statement

for the year ended 31 December 2017

 

 

 

2017

2016

 

Note

£'000

£'000

Revenue

 

125,873

114,845

Cost of sales

 

(26,626)

(23,638)

Gross profit

 

99,247

91,207

Distribution costs

 

(47,751)

(42,191)

Administrative expenses

 

(29,757)

(28,154)

Operating profit

 

21,739

20,862

EBITDA*

 

27,934

26,321

Depreciation and amortisation

 

(6,195)

(5,459)

Operating profit

 

21,739

20,862

Finance income

 

237

176

Finance costs

 

(392)

(433)

Finance costs - net

 

(155)

(257)

Profit before income tax

 

21,584

20,605

Income tax expense

 

(7,239)

(6,822)

Profit for the year

 

14,345

13,783

Profit is attributable to:

 

 

 

Equity shareholders of the Company

 

14,310

13,783

Non-controlling interest

 

35

-

 

 

14,345

13,783

Earnings per share

 

 

 

Basic and diluted

1

116.7p

112.4p

 

*     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 2017

 

 

 

2017

2016

 

 

£'000

£'000

Profit for the financial year

 

14,345

13,783

Other comprehensive income/(expense):

 

 

 

Items that may be reclassified subsequently to profit or loss:

 

 

 

- currency translation differences on foreign currency net investments

 

1,439

4,441

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

 

 

 

- actuarial gain recognised in the Nu-Swift pension scheme

 

734

263

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

 

(257)

(92)

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

 

721

(200)

- movement on deferred tax relating to Ansul pension scheme deficit

 

(313)

61

Other comprehensive income for the year, net of tax

 

2,324

4,473

Total comprehensive income for the year

 

16,669

18,256

 

 

 

Consolidated statement of changes in equity

for the year ended 31 December 2017

 

 

 

Share

Capital

 

 

 

 

 

 

Share

premium

redemption

Merger

Other

Retained

Non-controlling

Total

 

capital

account

reserve

reserve

reserve

earnings

interest

equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 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 and 1 January 2017

123

344

1

2,033

7,031

87,021

-

96,553

Total comprehensive income for the year

 

 

 

 

 

 

 

 

Profit for the financial year

-

-

-

-

-

14,310

35

14,345

Other comprehensive income/(expense):

 

 

 

 

 

 

 

 

- exchange adjustments

-

-

-

-

1,439

-

-

1,439

- actuarial gain on pension schemes

-

-

-

-

-

1,455

-

1,455

- net movement on deferred tax relating to pension asset

-

-

-

-

-

(570)

-

(570)

Total comprehensive income for the year

-

-

-

-

1,439

15,195

35

16,669

Contributions by and distributions to owners of the Company:

- dividends

-

-

-

-

-

(9,808)

-

(9,808)

Contribution from non-controlling interest on business combination

-

-

-

-

-

-

154

154

At 31 December 2017

123

344

1

2,033

8,470

92,408

189

103,568

 

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 2017

 

 

 

2017

2016

 

 

£'000

£'000

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

 

11,589

10,937

Intangible assets

 

61,724

62,749

Deferred tax asset

 

589

919

Retirement benefit surplus

 

4,397

3,574

 

 

78,299

78,179

Current assets

 

 

 

Inventories

 

11,749

11,095

Trade and other receivables

 

26,063

23,138

Cash and cash equivalents

 

24,652

22,602

 

 

62,464

56,835

Total assets

 

140,763

135,014

Liabilities

 

 

 

Current liabilities

 

 

 

Trade and other payables

 

(19,576)

(19,344)

Income tax liabilities

 

(1,699)

(1,180)

Borrowings

 

(11,125)

(1,870)

Derivative financial instruments

 

(54)

-

Provision for liabilities and charges

 

-

(35)

 

 

(32,454)

(22,429)

Non-current liabilities

 

 

 

Trade and other payables

 

(1,003)

(957)

Borrowings

 

-

(10,789)

Derivative financial instruments

 

-

(172)

Deferred tax liabilities

 

(1,830)

(1,705)

Retirement benefit obligations

 

(1,721)

(2,279)

Provision for liabilities and charges

 

(187)

(130)

 

 

(4,741)

(16,032)

Total liabilities

 

(37,195)

(38,461)

Net assets

 

103,568

96,553

Shareholders' equity

 

 

 

Ordinary shares

 

123

123

Share premium

 

344

344

Capital redemption reserve

 

1

1

Merger reserve

 

2,033

2,033

Other reserves

 

8,470

7,031

Retained earnings

 

92,408

87,021

Equity attributable to owners of the Parent Company

 

103,379

96,553

Non-controlling interest

 

189

-

Total equity

 

103,568

96,553

 

Consolidated statement of cash flow

for the year ended 31 December 2017

 

 

 

2017

2016

 

 

£'000

£'000

Cash flows from operating activities

 

 

 

Cash generated from operations

 

25,182

26,059

Interest paid

 

(368)

(408)

Income tax paid

 

(7,249)

(7,213)

Net cash generated from operating activities

 

17,565

18,438

Cash flows from investing activities

 

 

 

Acquisition of subsidiary undertakings (net of cash acquired)

 

(1,220)

(2,222)

Purchases of property, plant and equipment

 

(3,384)

(2,774)

Proceeds from the sale of property, plant and equipment

 

349

323

Purchases of intangible assets

 

(600)

(1,662)

Interest received

 

30

43

Net cash used in investing activities

 

(4,825)

(6,292)

Cash flows from financing activities

 

 

 

Repayments of borrowings

 

(1,809)

(1,819)

Dividends paid to Company's shareholders

 

(9,808)

(9,726)

Contribution from non-controlling interest

 

154

-

Net cash used in financing activities

 

(11,463)

(11,545)

Effects of exchange rates on cash and cash equivalents

 

773

2,265

Net increase in cash in the year

 

2,050

2,866

Cash and cash equivalents at the beginning of the year

 

22,602

19,736

Cash and cash equivalents at the end of the year

 

24,652

22,602

 

 

Notes to the financial statements

for the year ended 31 December 2017

 

1 Earnings per share

The calculation of basic earnings per ordinary share ("EPS") is based on the profit on ordinary activities after taxation of £14,310,000 (2016: £13,783,000) and on 12,261,477 (2016: 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.

 

2017

 

2016

 

£'000

Pence

 

£'000

Pence

Profit on ordinary activities after taxation

14,310

116.7

 

13,783

112.4

 

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 2017 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 2016 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 2017 and 31 December 2016 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 16 May 2018. 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 for the Year Ended 31 December 2017 - RNS