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Share Name Share Symbol Market Type Share ISIN Share Description
London Security Plc LSE:LSC London Ordinary Share GB0005314363 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -10.00 -0.43% 2,300.00 2,200.00 2,400.00 2,300.00 2,300.00 2,300.00 0.00 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 146.9 24.0 135.8 16.9 282

London Security PLC Interim results for six months ended 30 June 2020

15/09/2020 7:00am

UK Regulatory (RNS & others)


London Security (LSE:LSC)
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From Aug 2020 to Oct 2020

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TIDMLSC

RNS Number : 9415Y

London Security PLC

15 September 2020

London Security PLC

(the "Group" or "Company")

Interim results for the six months ended 30 June 2020

Chairman's statement

J.G. Murray, Chairman

Financial highlights

   --     Revenue GBP67.2m (2019: GBP71.7m) 
   --     Operating profit GBP7.6m (2019: GBP10.5m) 
   --     Earnings per share 39.9p (2019: 57.9p) 

TRADING

The financial highlights illustrate that the Group's revenue decreased by GBP4.5 million (6.3%) to GBP67.2 million

Operating profit decreased by GBP2.9 million (27.6%) to GBP7.6 million.

The period under review reflects the impact from the coronavirus outbreak, which has significantly impacted all the countries in which we operate. Although there has been some return to normality in our business some customers remain closed and there are still restrictions on our operations. We must be prepared for further disruption should a second wave materialise in any of the countries in which we operate.

ACQUISITIONS

In the six months to the end of June, the Group has made no 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 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 2020 was GBP34.4 million. This is an increase of GBP7.3 million on the 31 December 2019 balance of GBP27.1 million

In May 2018 the Group entered into a new five year multi-currency facility until 2023 comprising GBP3.15 million and EUR8.40 million. To limit our exposure to increasing interest rates these loans are subject to interest rate caps of 1.5% LIBOR on the Sterling loan and 0.25% EURIBOR on the Euro loan.

PROSPECTS

As the situation continues, cash management will be a key consideration; the London Security Group has a healthy balance sheet, strong cash reserves and a track record for good cash generation. Debt recovery remains consistent with previous years and staff costs will be controlled using the furlough process where applicable. The Board therefore considers that its strong balance sheet and material net cash position means that it is well placed to navigate through the impact of the coronavirus outbreak.

DIVIDS

A final dividend in respect of 2019 of GBP0.20 per ordinary share was paid to shareholders on 10 July 2020.

J.G. Murray

Chairman

15 September 2020

Consolidated income statement

for the six months ended 30 June 2020

 
                                             Unaudited   Unaudited      Audited 
                                            six months  six months         year 
                                                 ended       ended        ended 
                                               30 June     30 June  31 December 
                                                  2020        2019         2019 
                                      Note     GBP'000     GBP'000      GBP'000 
 -----------------------------------  ----  ----------  ----------  ----------- 
 Revenue                                        67,164      71,737      146,920 
 Cost of sales                                (16,452)    (17,932)     (36,293) 
 -----------------------------------  ----  ----------  ----------  ----------- 
 Gross profit                                   50,712      53,805      110,627 
 Distribution costs                           (26,310)    (26,253)     (54,140) 
 Administrative expenses                      (16,768)    (17,025)     (32,333) 
 -----------------------------------  ----  ----------  ----------  ----------- 
 Operating profit                                7,634      10,527       24,154 
 -----------------------------------  ----  ----------  ----------  ----------- 
 EBITDA*                                        11,951      14,474       32,503 
 Depreciation and amortisation                 (4,317)     (3,947)      (8,349) 
 -----------------------------------  ----  ----------  ----------  ----------- 
 Operating profit                                7,634      10,527       24,154 
 -----------------------------------  ----  ----------  ----------  ----------- 
 Finance income                                     21          23          142 
 Finance costs                                    (96)       (121)        (254) 
 -----------------------------------  ----  ----------  ----------  ----------- 
 Finance costs - net                              (75)        (98)        (112) 
 -----------------------------------  ----  ----------  ----------  ----------- 
 Profit before income tax                        7,559      10,429       24,042 
 Income tax expense                            (2,602)     (3,237)      (7,229) 
 -----------------------------------  ----  ----------  ----------  ----------- 
 Profit for the period                           4,957       7,192       16,813 
 -----------------------------------  ----  ----------  ----------  ----------- 
 Profit is attributable to 
 Equity shareholders of the Company              4,895       7,103       16,653 
 Non-controlling interest                           62          89          160 
 -----------------------------------  ----  ----------  ----------  ----------- 
                                                 4,957       7,192       16,813 
 -----------------------------------  ----  ----------  ----------  ----------- 
 Earnings per share 
 Basic and diluted                       3       39.9p       57.9p       135.8p 
 Dividends 
 Dividends paid per share                          Nil         Nil        80.0p 
 -----------------------------------  ----  ----------  ----------  ----------- 
 

* Earnings before interest, taxation, depreciation, amortisation and impairment charges.

The above are all as a result of continuing operations.

Consolidated statement of comprehensive income

for the six months ended 30 June 2020

 
                                                            Unaudited   Unaudited      Audited 
                                                           six months  six months         year 
                                                                ended       ended        ended 
                                                              30 June     30 June  31 December 
                                                                 2020        2019         2019 
                                                              GBP'000     GBP'000      GBP'000 
---------------------------------------------------------  ----------  ----------  ----------- 
Profit for the financial period                                 4,957       7,192       16,813 
---------------------------------------------------------  ----------  ----------  ----------- 
Other comprehensive income/(expense): 
Items that will not be reclassified subsequently to 
 profit or loss: 
- currency translation differences on foreign operation 
 consolidation, net of tax                                      3,196          47      (2,389) 
- actuarial gain recognised in the Nu-Swift pension 
 scheme                                                             -           -          414 
- movement on deferred tax relating to the Nu-Swift 
 pension scheme                                                     -           -        (145) 
- actuarial loss recognised in the Ansul pension scheme             -           -        (412) 
- movement on deferred tax relating to the Ansul pension 
 scheme                                                             -           -          103 
---------------------------------------------------------  ----------  ----------  ----------- 
Other comprehensive income for the period, net of tax           3,196          47      (2,429) 
---------------------------------------------------------  ----------  ----------  ----------- 
Total comprehensive income for the period                       8,153       7,239       14,384 
---------------------------------------------------------  ----------  ----------  ----------- 
 

Consolidated statement of changes in equity

for the six months ended 30 June 2020

 
                                                               Share    Share     Capital   Merger    Other  Retained  Non-controlling 
                                                             capital  premium  redemption  reserve  reserve  earnings         interest    Total 
                                                             GBP'000  GBP'000     GBP'000  GBP'000  GBP'000   GBP'000          GBP'000  GBP'000 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
At 1 January 2019                                                123      344           1    2,033    8,831   100,078              302  111,712 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
Comprehensive income 
 for the period: 
- profit for the period                                            -        -           -        -        -     7,103               89    7,192 
- exchange adjustments                                             -        -           -        -       47         -                -       47 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
Total comprehensive income 
 for the period                                                    -        -           -        -       47     7,103               89    7,239 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
Distribution to non-controlling 
 interest                                                          -        -           -        -        -         -             (23)     (23) 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
At 30 June 2019                                                  123      344           1    2,033    8,878   107,181              368  118,928 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
Comprehensive income 
 for the period: 
- profit for the period                                            -        -           -        -        -     9,550               71    9,621 
- exchange adjustments                                             -        -           -        -  (2,436)         -                -  (2,436) 
- actuarial gain on pension 
 schemes                                                           -        -           -        -                  2                -        2 
 
  *    movement on deferred tax relating to pension schemes        -        -           -        -        -      (42)                -     (42) 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
Total comprehensive income 
 for the period                                                    -        -           -        -  (2,436)     9,510               71    7,145 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
Contributions by and 
 distributions to owners 
 of the Company: 
- dividends                                                        -        -           -        -        -   (9,809)                -  (9,809) 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
Distribution to non-controlling 
 interest                                                          -        -           -        -        -         -             (90)     (90) 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
At 31 December 2019                                              123      344           1    2,033    6,442   106,882              349  116,174 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
Comprehensive income 
 for the period: 
- profit for the period                                            -        -           -        -        -     4,895               62    4,957 
- exchange adjustments                                             -        -           -        -    3,196         -                -    3,196 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
Total comprehensive income 
 for the period                                                    -        -           -        -    3,196     4,895               62    8,153 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
Distribution to non-controlling 
 interest                                                          -        -           -        -        -         -            (159)    (159) 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
At 30 June 2020                                                  123      344           1    2,033    9,638   111,777              252  124,168 
-----------------------------------------------------------  -------  -------  ----------  -------  -------  --------  ---------------  ------- 
 

Consolidated statement of financial position

as at 30 June 2020

 
                                                      Unaudited  Unaudited      Audited 
                                                          as at      as at        as at 
                                                        30 June    30 June  31 December 
                                                           2020       2019         2019 
                                                        GBP'000    GBP'000      GBP'000 
----------------------------------------------------  ---------  ---------  ----------- 
Assets 
Non-current assets 
Property, plant and equipment                            13,308     12,921       12,164 
Right-of-use assets                                       2,382      2,752        2,360 
Intangible assets                                        67,502     67,548       67,504 
Deferred tax asset                                          779        807          683 
Retirement benefit surplus                                4,959      4,430        4,959 
----------------------------------------------------  ---------  ---------  ----------- 
                                                         88,930     88,458       87,670 
----------------------------------------------------  ---------  ---------  ----------- 
Current assets 
Inventories                                              15,182     14,613       13,434 
Trade and other receivables                              32,499     29,129       27,822 
Cash and cash equivalents                                34,422     28,869       27,143 
----------------------------------------------------  ---------  ---------  ----------- 
                                                         82,103     72,611       68,399 
----------------------------------------------------  ---------  ---------  ----------- 
Total assets                                            171,033    161,069      156,069 
----------------------------------------------------  ---------  ---------  ----------- 
Liabilities 
Current liabilities 
Trade and other payables                               (29,119)   (23,808)     (23,158) 
Income tax liabilities                                  (2,311)    (1,145)        (987) 
Borrowings                                              (2,139)    (2,125)      (2,048) 
Lease liabilities                                       (1,169)    (1,239)      (1,134) 
Provision for liabilities and charges                         -        (5)            - 
----------------------------------------------------  ---------  ---------  ----------- 
                                                       (34,738)   (28,322)     (27,327) 
----------------------------------------------------  ---------  ---------  ----------- 
Non-current liabilities 
Trade and other payables                                (1,275)    (1,026)        (850) 
Borrowings                                              (4,270)    (6,379)      (5,122) 
Lease liabilities                                       (1,209)    (1,535)      (1,256) 
Derivative financial instruments                           (43)       (54)         (47) 
Deferred income tax liabilities                         (2,873)    (2,756)      (2,909) 
Retirement benefit obligations                          (2,282)    (1,880)      (2,215) 
Provision for liabilities and charges                     (175)      (189)        (169) 
----------------------------------------------------  ---------  ---------  ----------- 
                                                       (12,127)   (13,819)     (12,568) 
----------------------------------------------------  ---------  ---------  ----------- 
Total liabilities                                      (46,865)   (42,141)     (39,895) 
----------------------------------------------------  ---------  ---------  ----------- 
Net assets                                              124,168    118,928      116,174 
----------------------------------------------------  ---------  ---------  ----------- 
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                                            9,638      8,878        6,442 
Retained earnings                                       111,777    107,181      106,882 
----------------------------------------------------  ---------  ---------  ----------- 
Equity attributable to owners of the Parent Company     123,916    118,560      115,825 
Non-controlling interest                                    252        368          349 
----------------------------------------------------  ---------  ---------  ----------- 
Total equity                                            124,168    118,928      116,174 
----------------------------------------------------  ---------  ---------  ----------- 
 

Consolidated statement of cash flow

for the six months ended 30 June 2020

 
                                                            Unaudited   Unaudited      Audited 
                                                           six months  six months         year 
                                                                ended       ended        ended 
                                                              30 June     30 June  31 December 
                                                                 2020        2019         2019 
                                                              GBP'000     GBP'000      GBP'000 
---------------------------------------------------------  ----------  ----------  ----------- 
Cash flows from operating activities 
Cash generated from operations                                 12,319      13,953       32,363 
Interest paid                                                    (66)        (74)        (160) 
Income tax paid                                               (2,323)     (4,414)      (7,639) 
---------------------------------------------------------  ----------  ----------  ----------- 
Net cash generated from operating activities                    9,930       9,465       24,564 
---------------------------------------------------------  ----------  ----------  ----------- 
Cash flows from investing activities 
Acquisition of subsidiary undertakings                              -     (1,007)      (2,264) 
Purchases of property, plant and equipment                    (2,344)     (2,536)      (3,974) 
Proceeds from sale of property, plant and equipment               137         109          329 
Purchases of intangible assets                                  (969)     (2,001)      (2,068) 
Interest received                                                  17          23           27 
---------------------------------------------------------  ----------  ----------  ----------- 
Net cash used in investing activities                         (3,159)     (5,412)      (7,950) 
---------------------------------------------------------  ----------  ----------  ----------- 
Cash flows from financing activities 
Repayments of borrowings                                      (1,015)     (1,040)      (2,091) 
Payment of lease liabilities                                    (987)       (831)      (1,750) 
Dividends paid to Company's shareholders                            -           -      (9,809) 
Distribution to non-controlling interest                        (159)        (23)        (113) 
---------------------------------------------------------  ----------  ----------  ----------- 
Net cash used in financing activities                         (2,161)     (1,894)     (13,763) 
---------------------------------------------------------  ----------  ----------  ----------- 
Effects of exchange rates on cash and cash equivalents          2,669         600      (1,818) 
---------------------------------------------------------  ----------  ----------  ----------- 
Net increase in cash in the period                              7,279       2,759        1,033 
Cash and cash equivalents at the beginning of the period       27,143      26,110       26,110 
---------------------------------------------------------  ----------  ----------  ----------- 
Cash and cash equivalents at the end of the period             34,422      28,869       27,143 
---------------------------------------------------------  ----------  ----------  ----------- 
 

Notes to the financial statements

for the six months ended 30 June 2020

1 Nature of information

The financial information contained in this Interim Statement has been neither audited nor reviewed by the auditors 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 2020 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 2019. 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 2019 have been extracted from the statutory accounts for the year ended 31 December 2019, which have been delivered to the Registrar of Companies. The Independent Auditors' 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 GBP4,895,000 (2019: GBP7,103,000) and on 12,261,477 (2019: 12,261,477) 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 
                                                     2020        2019         2019 
                                                  GBP'000     GBP'000      GBP'000 
---------------------------------------------  ----------  ----------  ----------- 
Profit on ordinary activities after taxation        4,895       7,103       16,653 
---------------------------------------------  ----------  ----------  ----------- 
Basic earnings per ordinary share                   39.9p       57.9p       135.8p 
---------------------------------------------  ----------  ----------  ----------- 
 

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 2020. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2020.

For further information, please contact:

London Security plc

Richard Pollard

Company Secretary Tel : 01422 372852

WH Ireland Limited

Chris Fielding Tel : 0207 220 1666

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