REG - London Security PLC - Final Results for the Year Ended 31 December 2023
15/05/2024 09:30
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RNS Number : 5353O London Security PLC 15 May 2024
London Security plc
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7
OF THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH IS PART OF UK LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Final Results for the Year Ended 31 December 2023
Chairman's statement
J.J. Murray, Chairman
Financial Highlights
Financial highlights of the audited results for the year ended 31 December
2023 compared with the year ended 31 December 2022 are as follows:
• revenue of £219.7 million (2022: £188.9 million);
• operating profit of £31.6 million (2022: £27.2 million);
• profit for the year of £23.3 million (2022: £20.2 million);
• cash of £32.7 million (2022: £34.0 million);
• earnings per share for the year of £1.90 (2022: £1.65); and
• a dividend per share of £1.24 (2022: £0.84).
Trading review
The financial highlights illustrate that the Group's revenue increased by
£30.8 million (16.3%) to £219.7 million and operating profit increased by
£4.4 million (16.2%) to £31.6 million. These results reflect:
• the effect of input inflation which our companies initially
absorbed, but as it became clear that it was a longer term trend we passed on
appropriate price increases to our customers;
• the positive impact of acquisitions in 2023 and the full year's
trading of acquisitions in 2022;
• 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 positive effect of £3.0 million on reported revenue and £0.5 million
on operating profit. 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 acquired two security businesses in Belgium. The Group has
also continued with the acquisition of service contracts from smaller
well-established businesses for integration into the Group's existing
subsidiaries and has grown its presence in Austria, the Netherlands, the
United Kingdom and Germany.
Management and staff
2023 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.
Jacques Gaston Murray
Mr. Murray sadly passed away on 7 June 2023. Mr. Murray was appointed to the
Board in January 2000, following his acquisition of a controlling interest in
the Company, and he has had a prominent role in guiding the Company's
successful performance and strategy since that time. The Board would like to
place on record its immense appreciation for the many years of service that
Mr. Murray dedicated to the Company.
Dividends
An exceptional one-off interim dividend in respect of 2023 of £0.82 per
ordinary share was paid to shareholders on 7 December 2023. The Board is
recommending the payment of a final dividend in respect of 2023 at the same
level as 2022 of £0.42 per ordinary share. This would be paid on 12 July 2024
to shareholders on the register on 14 June 2024 with the shares marked
ex-dividend on 13 June 2024.
Future prospects
The markets in which we operate are entering what is likely to be a period of
low growth albeit with declining inflation from high levels in 2023. The
London Security Group however has a healthy balance sheet, strong cash
reserves and a track record for good cash generation. The Board therefore
considers that the Group is well placed to weather any downturn. We will also
continue to invest in our future and the Group plans to continue to grow
through acquisitions.
Annual General Meeting
The Annual General Meeting ("AGM") will be held at 2 Jubilee Way, Elland, West
Yorkshire HX5 9DY, on 25 June 2024 at 11.30 am. The Company confirms that
shareholders are able to attend in person should they wish to do so. However,
we strongly encourage shareholders to vote on all resolutions by completing
the enclosed form of proxy for use at that Meeting, which you are requested to
return in accordance with the instructions on the form.
J-J. Murray
Chairman
14 May 2024
Consolidated income statement
for the year ended 31 December 2023
2023 2022
Note £'000 £'000
Revenue 219,705 188,898
Cost of sales (58,988) (49,748)
Gross profit 160,717 139,150
Distribution costs (81,373) (70,565)
Administrative expenses (47,762) (41,420)
Operating profit 31,582 27,165
EBITDA* 42,660 37,269
Depreciation and amortisation (11,078) (10,104)
Operating profit 31,582 27,165
Finance income 226 31
Finance costs (264) (242)
Finance costs - net (38) (211)
Profit before income tax 31,544 26,954
Income tax expense (8,280) (6,729)
Profit for the year 23,264 20,225
Profit is attributable to:
Equity shareholders of the Company 23,264 20,216
Non-controlling interest - 9
23,264 20,225
Earnings per share
Basic and diluted 1 189.8p 164.9p
* 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 2023
2023 2022
£'000 £'000
Profit for the financial year 23,264 20,216
Other comprehensive (expense)/income:
Items that may be reclassified subsequently to profit or loss:
- currency translation differences on foreign currency net investments (1,579) 3,602
Items that will not be reclassified subsequently to profit or loss:
- actuarial gain/(loss) recognised in the Nu-Swift Pension Scheme 52 (111)
- movement on deferred tax relating to the Nu-Swift Pension Scheme surplus (18) 38
- actuarial (loss)/gain recognised in the Ansul Pension Scheme (171) 1,249
- movement on deferred tax relating to the Ansul Pension Scheme deficit 43 (285)
Other comprehensive expense for the year, net of tax (1,673) 4,493
Equity shareholders of the Company 21,591 24,709
Non-controlling interest - 9
Total comprehensive income for the year 21,591 24,718
Consolidated statement of changes in equity
for the year ended 31 December 2023
Capital
Ordinary Share redemption Merger Other Retained Non-controlling Total
shares premium reserve reserve reserves earnings interest equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2022 as previously presented 123 344 1 2,033 5,056 124,072 118 131,747
Impact of IAS 12 amendment - - - - - 12 - 12
At 1 January 2022 as restated 123 344 1 2,033 5,056 124,084 118 131,759
Total comprehensive income for the year
Profit for the financial year - - - - - 20,216 9 20,225
Other comprehensive income/(expense):
- exchange adjustments - - - - 3,602 - - 3,602
- actuarial gain on pension schemes - - - - - 1,138 - 1,138
- net movement on deferred tax relating to pension deficit - - - - - (247) - (247)
Total comprehensive income/(expense) for the year - - - - 3,602 21,107 9 24,718
Contributions by and distributions to owners of the Company:
- purchase of own shares - - - - - (13) - (13)
- dividends - - - - - (10,298) - (10,298)
- - - - - ((10,311) - ((10,311)
Reduction in non-controlling interest - - - - - (158) (127) (285)
At 31 December 2022 and 1 January 2023 123 344 1 2,033 8,658 134,722 - 145,881
Total comprehensive income for the year
Profit for the financial year - - - - - 23,264 - 23,264
Other comprehensive income:
- exchange adjustments - - - - (1,579) - - (1,579)
- actuarial loss on pension schemes - - - - - (119) - (119)
- net movement on deferred tax relating to pension schemes - - - - - 25 - 25
Total comprehensive income for the year - - - - (1,579) 23,170 - 21,591
Contributions by and distributions to owners of the Company:
- purchase of own shares - - - - - (33) - (33)
- dividends - - - - - (15,196) - (15,196)
- - - - - (15,229) - (15,229)
At 31 December 2023 123 344 1 2,033 7,079 142,663 - 152,243
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 2023
2023 2022
£'000 £'000
Assets
Non-current assets
Property, plant and equipment 17,749 14,940
Right of use assets 6,549 5,975
Intangible assets 77,382 77,076
Deferred tax asset 749 719
Retirement benefit surplus 342 276
102,771 98,986
Current assets
Inventories 22,143 22,260
Trade and other receivables 44,488 40,699
Cash and cash equivalents 32,737 33,962
99,368 96,921
Total assets 202,139 195,907
Liabilities
Current liabilities
Trade and other payables (36,403) (36,431)
Income tax liabilities (2,275) (1,440)
Borrowings (381) (1,598)
Lease liabilities (2,274) (2,040)
Provision (6) (10)
(41,339) (41,519)
Non-current liabilities
Trade and other payables (1,090) (936)
Borrowings (97) (236)
Lease liabilities (4,402) (4,033)
Derivative financial instruments - -
Deferred tax liabilities (1,811) (2,211)
Retirement benefit obligations (1,021) (953)
Provision (136) (138)
(8,557) (8,507)
Total liabilities (49,896) (50,026)
Net assets 152,243 145,881
Shareholders' equity
Ordinary shares 123 123
Share premium 344 344
Capital redemption reserve 1 1
Merger reserve 2,033 2,033
Other reserves 7,079 8,658
Retained earnings 142,663 134,722
Total equity 152,243 145,881
Consolidated statement of cash flows
for the year ended 31 December 2023
2023 2022
£'000 £'000
Cash flows from operating activities
Cash generated from operations 38,234 30,489
Interest paid (256) (111)
Income tax paid (8,229) (7,055)
Net cash generated from operating activities 29,749 23,323
Cash flows from investing activities
Acquisition of subsidiary undertakings (net of cash acquired) (1,582) (4,078)
Purchases of property, plant and equipment (7,665) (4,626)
Proceeds from the sale of property, plant and equipment 721 730
Purchases of intangible assets (3,033) (3,193)
Interest received 212 4
Net cash used in investing activities (11,347) (11,163)
Cash flows from financing activities
Repayments of borrowings (1,443) (2,312)
Payment of lease liabilities (2,484) (2,356)
Dividends paid to the Company's shareholders (15,196) (10,298)
Purchase of own shares (33) (13)
Reduction in non-controlling interest - (285)
Net cash used in financing activities (19,156) (15,264)
Net increase in cash in the year (754) (3,104)
Cash and cash equivalents at the beginning of the year 33,962 35,681
Effects of exchange rates on cash and cash equivalents (471) 1,385
Cash and cash equivalents at the end of the year 32,737 33,962
Notes to the financial statements
for the year ended 31 December 2023
1 Earnings per share
The calculation of basic earnings per ordinary share ("EPS") is based on the
profit on ordinary activities after taxation of £23,264,000 (2022:
£20,225,000) and on 12,260,286 (2022: 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.
2023 2022
£'000 Pence £'000 Pence
Profit on ordinary activities after taxation 23,264 189.8 20,225 164.9
2 This financial information within 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 2023
have been extracted from the full accounts of the Group for that year which
received an unmodified auditor's report, and which have not yet been delivered
to the Registrar of Companies. The financial information for the year ended
31 December 2022 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 unmodified and does not include a statement under
section 498(2) or (3) of the Companies Act 2006.
This preliminary announcement has been prepared in accordance with the
recognition and measurement principles of UK adopted international accounting
standards in conformity with the requirements of the Companies Act 2006 and in
accordance with the AIM rules. The financial information included in this
preliminary announcement does not include all the disclosures required in
accounts prepared in accordance with UK adopted international accounting
standards in conformity with the requirements of the Companies Act 2006 and
accordingly it does not itself comply with UK adopted international accounting
standards in conformity with the requirements of the Companies Act 2006. The
accounting policies used in the preparation of this preliminary announcement
have remained unchanged from those set out in the statutory accounts for the
year ended 31 December 2022. They are also consistent with those in the full
accounts for the year ended 31 December 2023, which have yet to be published.
The Group will post its annual report and accounts to shareholders on 23 May
2024, a copy of the annual report and accounts will be available on the
company's website (www.londonsecurity.org (http://www.londonsecurity.org/) ).
The person responsible for arranging the release of this announcement on
behalf of the Company is Richard Pollard, Company Secretary.
Enquiries
London Security plc
Richard Pollard Tel: 01422 372 852
Company Secretary
WH Ireland Limited
Chris Fielding Tel: 0207 220 1666
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