REG - London Security PLC - Interim results for six months ended 30 June 2024
13/09/2024 07:00
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RNS Number : 0217E London Security PLC 13 September 2024
London Security PLC
(the "Group" or "Company")
Interim results for the six months ended 30 June 2024
Chairman's statement
J-J. Murray, Chairman
Financial highlights
• Revenue £110.9m (2023: £108.8m)
• Operating profit £13.4m (2023: £13.7m)
• Earnings per share 78.4p (2023: 81.0p)
Trading
The financial highlights illustrate that the Group's revenue increased by
£2.1 million (1.9%) to £110.9 million.
Operating profit decreased by £0.3 million (2.2%) to £13.4 million.
These results include the adverse movement in the Euro to Sterling average
exchange rate, which has increased from 1.15 to 1.17. If the 2024 results from
the European subsidiaries had been translated at 2023 rates, revenue would
have been £113.2 million instead of £110.9 million, which would represent an
increase of 4.0% on the prior year. On the same basis, operating profit would
have been £13.7 million instead of £13.4 million, stable compared to 2023.
The first six months of 2024 were a period of consolidation for the Group
following the 26% increase in operating profit that was enjoyed in 2023.
Whilst operating profit is broadly stable versus 2023, this still represents a
23% increase on 2022.
The core servicing business remains very consistent with a slight fall in
special projects, the instance of which is unpredictable.
Although inflation has moderated since last year, we continue to experience
upward input price pressures. These supply price increases have been passed on
to our customers where possible. Interest rates which were increased to combat
inflation remain high and are depressing growth and reducing our customers'
appetite to invest. All the countries in which we operate are experiencing low
or no growth.
Acquisitions
In the six months to the end of June 2024, the Group strengthened its presence
in Belgium, the Netherlands, Germany, Austria, Luxembourg and France through
the acquisition of service contracts to be integrated into the Group's
existing subsidiaries. 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.
Cash and financing
The Group's cash balance as at 30 June 2024 was £39.5 million. This is an
increase of £6.8 million on the 31 December 2023 balance of £32.7 million.
Prospects
Cash management is a key consideration in difficult economic times. The London
Security Group has a healthy balance sheet, strong cash reserves and a track
record for good cash generation. The Board therefore considers that with its
strong balance sheet and material net cash position the Group is well placed
to cope with a period of low growth.
Dividends
A final dividend in respect of 2023 of £0.42 per ordinary share was paid to
shareholders on 12 July 2024.
J-J. Murray
Chairman
13 September 2024
Consolidated income statement
for the six months ended 30 June 2024
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
Note £'000 £'000 £'000
Revenue 110,864 108,845 219,705
Cost of sales (30,088) (29,452) (58,988)
Gross profit 80,776 79,393 160,717
Distribution costs (41,835) (41,304) (81,373)
Administrative expenses (25,589) (24,357) (47,762)
Operating profit 13,352 13,732 31,582
Finance income 213 5 226
Finance costs (162) (110) (264)
Finance income/(cost) - net 51 (105) (38)
Profit before income tax 13,403 13,627 31,544
Income tax expense (3,813) (3,692) (8,280)
Profit for the period 9,590 9,935 23,264
Earnings per share
Basic and diluted 3 78.4p 81.0p 189.8p
Dividends
Dividends paid per share Nil Nil 124p
The above are all as a result of continuing operations.
Consolidated statement of comprehensive income
for the six months ended 30 June 2024
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Profit for the financial period 9,590 9,935 23,264
Other comprehensive (expense)/income:
Items that will not be reclassified subsequently to profit or loss:
- currency translation differences on foreign operation consolidation, net of (2,096) (2,851) (1,579)
tax
- actuarial gain recognised in the Nu-Swift pension scheme - - 52
- movement on deferred tax relating to the Nu-Swift pension scheme - - (18)
- actuarial loss recognised in the Ansul pension scheme - - (171)
- movement on deferred tax relating to the Ansul pension scheme - - 43
Other comprehensive expense for the period, net of tax (2,096) (2,851) (1,673)
Total comprehensive income for the period 7,494 7,084 21,591
Consolidated statement of changes in equity
for the six months ended 30 June 2024
Share Share Capital Merger Other Retained
capital premium redemption reserve reserve earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 123 344 1 2,033 8,658 134,722 145,881
Comprehensive income for the period:
- profit for the period - - - - - 9,935 9,935
- exchange adjustments - - - - (2,851) - (2,851)
Total comprehensive (expense)/income for the period - - - - (2,851) 9,935 7,084
Purchase of own shares - - - - - (30) (30)
At 30 June 2023 123 344 1 2,033 5,807 144,627 152,935
Comprehensive income for the period:
- profit for the period - - - - - 13,329 13,329
- exchange adjustments - - - - 1,272 - 1,272
- actuarial gain on pension schemes - - - - - (119) (119)
- movement on deferred tax relating to pension schemes - - - - - 25 25
Total comprehensive income for the period - - - - 1,272 13,235 14,507
Contributions by and distributions to owners of the Company:
- dividends - - - - (15,196) (15,196)
Purchase of own shares - - - - - (3) (3)
At 31 December 2023 123 344 1 2,033 7,079 142,663 152,243
Comprehensive income for the period:
- profit for the period - - - - - 9,590 9,590
- exchange adjustments - - - - (2,096) - (2,096)
Total comprehensive (expense)/income for the period - - - - (2,096) 9,590 7,494
At 30 June 2024 123 344 1 2,033 4,983 152,253 159,737
Consolidated statement of financial position
as at 30 June 2024
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 18,216 16,430 17,749
Right-of-use assets 7,100 5,531 6,549
Intangible assets 76,719 77,848 77,382
Deferred tax asset 740 654 749
Retirement benefit surplus 342 276 342
103,117 100,739 102,771
Current assets
Inventories 21,401 22,934 22,143
Trade and other receivables 47,321 43,907 44,488
Cash and cash equivalents 39,452 33,206 32,737
108,174 100,047 99,368
Total assets 211,291 200,786 202,139
Liabilities
Current liabilities
Trade and other payables (38,326) (35,902) (36,403)
Income tax liabilities (1,406) (1,448) (2,275)
Borrowings (264) (344) (381)
Lease liabilities (2,347) (1,228) (2,274)
Provision for liabilities and charges (6) (9) (6)
(42,349) (38,931) (41,339)
Non-current liabilities
Trade and other payables (1,291) (1,016) (1,090)
Borrowings (82) (228) (97)
Lease liabilities (4,894) (4,417) (4,402)
Deferred income tax liabilities (1,810) (2,188) (1,811)
Retirement benefit obligations (995) (921) (1,021)
Provision for liabilities and charges (133) (150) (136)
(9,205) (8,920) (8,557)
Total liabilities (51,554) (47,851) (49,896)
Net assets 159,737 152,935 152,243
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 4,983 5,807 7,079
Retained earnings 152,253 144,627 142,663
Total equity 159,737 152,935 152,243
Consolidated statement of cash flow
for the six months ended 30 June 2024
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations 20,137 14,608 38,234
Interest paid (162) (39) (256)
Income tax paid (6,440) (4,737) (8,229)
Net cash generated from operating activities 13,535 9,832 29,749
Cash flows from investing activities
Acquisition of subsidiary undertakings - (2,522) (1,582)
Purchases of property, plant and equipment (3,429) (4,164) (7,665)
Proceeds from sale of property, plant and equipment 323 273 721
Purchases of intangible assets (1,781) (902) (3,033)
Interest received 213 5 212
Net cash used in investing activities (4,674) (7,310) (11,347)
Cash flows from financing activities
Repayments of borrowings (132) (1,173) (1,443)
Payment of lease liabilities (1,344) (1,250) (2,484)
Dividends paid to Company's shareholders - - (15,196)
Purchase of own shares - (30) (33)
Net cash used in financing activities (1,476) (2,453) (19,156)
Net increase/(decrease) in cash in the period 7,385 69 (754)
Cash and cash equivalents at the beginning of the period 32,737 33,962 33,962
Effects of exchange rates on cash and cash equivalents (670) (825) (471)
Cash and cash equivalents at the end of the period 39,452 33,206 32,737
Notes to the financial statements
for the six months ended 30 June 2024
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 2024 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 2023. 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 2023 have been extracted
from the statutory accounts for the year ended 31 December 2023, 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 and
income 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 £9,590,000 (2023: £9,935,000) and on
12,259,877 (2023: 12,260,684) 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
2024 2023 2023
£'000 £'000 £'000
Profit on ordinary activities after taxation 9,590 9,935 23,264
Basic earnings per ordinary share 78.4p 81.0p 189.8p
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 2024. In
accordance with IAS 19 such a valuation will be prepared for the purposes of
the Group's Annual Report and Accounts 2024.
For further information, please contact:
London Security plc
Richard Pollard
Company
Secretary
Tel : 01422
372852
Zeus Capital Limited
Chris Fielding / Sarah
Mather
Tel : 0203 829 5000
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