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London Security PLC   -  LSC   

Final Results for the Year Ended 31 December 2018

Released 09:54 09-May-2019

RNS Number : 5069Y
London Security PLC
09 May 2019
 

London Security plc

 

Final Results for the Year Ended 31 December 2018

 

Chairman's statement

J.G. Murray, Chairman

 

Financial highlights

Financial highlights of the audited results for the year ended 31 December 2018 compared with the year ended 31 December 2017 are as follows:

•     revenue of £137.7 million (2017: £125.9 million);

•     EBITDA of £29.6 million (2017: £27.9 million);

•     operating profit of £23.2 million (2017: £21.7 million);

•     profit for the year of £16.2 million (2017: £14.3 million); and

•     a dividend per share of £0.80 (2017: £0.80).

Trading review

The financial highlights illustrate that the Group's revenue increased by £11.8 million (9.4%) to £137.7 million and operating profit increased by £1.5 million (6.9%) to £23.2 million. These results reflect:

·      the positive impact of acquisitions in 2017 and 2018 in the United Kingdom, Austria and Denmark;

·      improved performance from our service business in continental Europe;

·      continued improvement from newer service offerings (e.g. emergency lights and passive fire protection); and

·      the movement in the Euro to Sterling average exchange rate, which had a favourable effect of £1.0 million on reported revenue and £0.2 million on operating profit.

 

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 acquired four established fire protection businesses and strengthened its position in the passive fire protection market with the acquisition of Amberfire Limited. The Group has grown its presence in the Netherlands, Belgium, Austria and the UK with the acquisition of service contracts from smaller well-established businesses for integration into the Group's existing subsidiaries. In addition, with the acquisition of Linde Brandmateriel Aps the Group has expanded its business into Denmark.

Management and staff

2018 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.

The Group was saddened by the sad loss of Michael Gailer following a short illness and is grateful to him for his 19 years of service.

Dividends

A final dividend in respect of 2017 of £0.40 per ordinary share was paid to shareholders on 5 July 2018. An interim dividend in respect of 2018 of £0.40 per ordinary share was paid to shareholders on 30 November 2018. The Board is recommending the payment of a final dividend in respect of 2018 of £0.40 per ordinary share to be paid on 5 July 2019 to shareholders on the register on 7 June 2019. The shares will be marked ex-dividend on 6 June 2019.

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 18 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

8 May 2019

 

 

 

Consolidated income statement

for the year ended 31 December 2018

 

 

 

 

2018

2017

 

 

Note

£'000

£'000

 

Revenue

 

137,711

125,873

 

Cost of sales

 

(31,780)

(26,626)

 

Gross profit

 

105,931

99,247

 

Distribution costs

 

(50,593)

(47,751)

 

Administrative expenses

 

(32,163)

(29,757)

 

Operating profit

 

23,175

21,739

 

EBITDA*

 

29,557

27,934

 

Depreciation and amortisation

 

(6,382)

(6,195)

 

Operating profit

 

23,175

21,739

 

Finance income

 

131

237

 

Finance costs

 

(171)

(392)

 

Finance costs - net

 

(40)

(155)

 

Profit before income tax

 

23,135

21,584

 

Income tax expense

 

(6,945)

(7,239)

 

Profit for the year

 

16,190

14,345

 

Profit is attributable to:

 

 

 

 

Equity shareholders of the Company

 

16,077

14,310

 

Non-controlling interest

 

113

35

 

 

 

16,190

14,345

 

Earnings per share

 

 

 

 

Basic and diluted

1

131.1p

116.7p

 

*     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 2018

 

 

 

2018

2017

 

 

£'000

£'000

Profit for the financial year

 

16,190

14,345

Other comprehensive income/(expense):

 

 

 

Items that may be reclassified subsequently to profit or loss:

 

 

 

- currency translation differences on foreign currency net investments

 

361

1,439

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

 

 

 

- actuarial gain recognised in the Nu-Swift Pension Scheme

 

16

734

- movement on deferred tax relating to Nu-Swift Pension Scheme surplus

 

(6)

(257)

- actuarial (loss)/gain recognised in the Ansul Pension Scheme

 

(145)

721

- movement on deferred tax relating to Ansul Pension Scheme deficit

 

36

(313)

Other comprehensive income for the year, net of tax

 

262

2,324

Total comprehensive income for the year

 

16,452

16,669

 

 

 

Consolidated statement of changes in equity

for the year ended 31 December 2018

 

 

 

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 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 and 1 January 2018

123

344

1

2,033

8,470

92,408

189

103,568

Total comprehensive income for the year

 

 

 

 

 

 

 

 

Profit for the financial year

-

-

-

-

-

16,077

113

16,190

Other comprehensive income/(expense):

 

 

 

 

 

 

 

 

- exchange adjustments

-

-

-

-

361

-

-

361

- actuarial loss on pension schemes

-

-

-

-

-

(129)

-

(129)

- net movement on deferred tax relating to pension asset

-

-

-

-

-

30

-

30

Total comprehensive income for the year

-

-

-

-

361

15,978

113

16,452

Contributions by and distributions to owners of the Company:

 

 

 

 

 

 

 

 

- dividends

-

-

-

-

-

(9,809)

-

(9,809)

At 31 December 2018

123

344

1

2,033

8,831

98,577

302

110,211

 

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 2018

 

 

 

2018

2017

 

 

£'000

£'000

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

 

12,077

11,589

Intangible assets

 

63,695

61,724

Deferred tax asset

 

811

589

Retirement benefit surplus

 

4,430

4,397

 

 

81,013

78,299

Current assets

 

 

 

Inventories

 

13,293

11,749

Trade and other receivables

 

28,732

26,063

Cash and cash equivalents

 

26,110

24,652

 

 

68,135

62,464

Total assets

 

149,148

140,763

Liabilities

 

 

 

Current liabilities

 

 

 

Trade and other payables

 

(22,713)

(19,576)

Income tax liabilities

 

(1,731)

(1,699)

Borrowings

 

(2,125)

(11,125)

Derivative financial instruments

 

-

(54)

Provision for liabilities and charges

 

(5)

-

 

 

(26,574)

(32,454)

Non-current liabilities

 

 

 

Trade and other payables

 

(922)

(1,003)

Borrowings

 

(7,441)

-

Derivative financial instruments

 

(41)

-

Deferred tax liabilities

 

(1,898)

(1,830)

Retirement benefit obligations

 

(1,880)

(1,721)

Provision for liabilities and charges

 

(181)

(187)

 

 

(12,363)

(4,741)

Total liabilities

 

(38,937)

(37,195)

Net assets

 

110,211

103,568

Shareholders' equity

 

 

 

Ordinary shares

 

123

123

Share premium

 

344

344

Capital redemption reserve

 

1

1

Merger reserve

 

2,033

2,033

Other reserves

 

8,831

8,470

Retained earnings

 

98,577

92,408

Equity attributable to owners of the Parent Company

 

109,909

103,379

Non-controlling interest

 

302

189

Total equity

 

110,211

103,568

 

 

 

Consolidated statement of cash flows

for the year ended 31 December 2018

 

 

 

2018

2017

 

 

£'000

£'000

Cash flows from operating activities

 

 

 

Cash generated from operations

 

28,385

25,182

Interest paid

 

(147)

(368)

Income tax paid

 

(7,393)

(7,249)

Net cash generated from operating activities

 

20,845

17,565

Cash flows from investing activities

 

 

 

Acquisition of subsidiary undertakings (net of cash acquired)

 

(4,274)

(1,220)

Purchases of property, plant and equipment

 

(3,551)

(3,384)

Proceeds from the sale of property, plant and equipment

 

398

349

Purchases of intangible assets

 

(746)

(600)

Interest received

 

12

30

Net cash used in investing activities

 

(8,161)

(4,825)

Cash flows from financing activities

 

 

 

Repayments of borrowings

 

(1,614)

(1,809)

Dividends paid to Company's shareholders

 

(9,809)

(9,808)

Contribution from non-controlling interest

 

-

154

Net cash used in financing activities

 

(11,423)

(11,463)

Effects of exchange rates on cash and cash equivalents

 

197

773

Net increase in cash in the year

 

1,458

2,050

Cash and cash equivalents at the beginning of the year

 

24,652

22,602

Cash and cash equivalents at the end of the year

 

26,110

24,652

 

 

 

Notes to the financial statements

for the year ended 31 December 2018

 

1 Earnings per share

The calculation of basic earnings per ordinary share ("EPS") is based on the profit on ordinary activities after taxation of £16,077,000 (2017: £14,310,000) and on 12,261,477 (2017: 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.

 

2018

 

2017

 

£'000

Pence

 

£'000

Pence

Profit on ordinary activities after taxation

16,077

131.1

 

14,310

116.7

 

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 2018 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 2017 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 2018 and 31 December 2017 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 20 May 2019. 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

 

 

 

 

 

 


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Final Results for the Year Ended 31 December 2018 - RNS