RNS Number:6570J
London Security PLC
29 September 2006
London Security plc
INTERIM STATEMENT
For the six months ended 30 June 2006
Chairman's Statement
Financial highlights
Financial highlights of the unaudited results for the six months ended 30 June
2006 compared with the first half of 2005 are as follows:
* Turnover of #33.4 million (2005: #34.0 million)
* Earnings before interest, taxation, depreciation and amortisation
("EBITDA") of #7.7 million (2005: #7.6 million)
* Operating profit of #5.1 million (2005: #5.1 million)
* Profit on ordinary activities before taxation of #4.1 million (2005:
#4.7 million)
* Earnings per share of 18.3p (2005: 18.0p)
Trading and prospects
The financial highlights above illustrate that 2006 has been a period of
consolidation for the Group. Each of our subsidiaries produced profits broadly
in line with the prior year. This, however, hides work done in the period on
cost control and commercial performance which give reason for optimism for the
future. Increased profits are expected in the second half compared with 2005, in
particular from our Belgian and UK operations.
The alarm divisions of MK Fire and TVF have made significant progress towards
the end of this period and this has continued with improved results in July and
August.
Improved results have been reported in our Swiss operations in part due to lower
office costs.
Interest payable and similar charges have risen significantly as new borrowings
to finance the Tender Offer were drawn down in July 2005, hence this period has
suffered a full interest charge.
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.
In this period, management and staff have continued to perform well and I would
like to express thanks and appreciation for their contribution.
J.G. Murray
Chairman
29 September 2006
Consolidated Profit and Loss Account
for the six months to 30 June 2006
Unaudited Unaudited Audited
six months six months year to
to 30 June to 30 June 31 December
2006 2005 2005
#'000 #'000 #'000
------------------------- ---------- ---------- ---------
Turnover 33,398 33,981 64,811
Cost of sales (6,197) (6,686) (11,888)
------------------------- ---------- ---------- ---------
Gross profit 27,201 27,295 52,923
Distribution costs (12,779) (13,286) (24,640)
Administrative expenses (9,347) (8,889) (19,189)
------------------------- ---------- ---------- ---------
Operating profit 5,075 5,120 9,094
------------------------- ---------- ---------- ---------
EBITDA* 7,675 7,645 14,258
Depreciation (1,034) (1,006) (2,031)
Amortisation of goodwill (1,566) (1,519) (3,133)
------------------------- ---------- ---------- ---------
Operating profit 5,075 5,120 9,094
------------------------- ---------- ---------- ---------
Profit on disposal of fixed asset
investments - - 1,474
Net interest payable and similar
charges (915) (330) (2,062)
Other finance costs (49) (92) (366)
------------------------- ---------- ---------- ---------
Profit on ordinary activities before
taxation 4,111 4,698 8,140
Taxation (Note3) (1,859) (2,094) (3,663)
------------------------- ---------- ---------- ---------
Profit on ordinary activities after
taxation 2,252 2,604 4,477
Dividends (1,476) - -
------------------------- ---------- ---------- ---------
Retained profit 776 2,604 4,477
------------------------- ---------- ---------- ---------
Basic and diluted earnings per
ordinary share (Note 2) 18.3p 18.0p 33.4p
------------------------- ---------- ---------- ---------
All of the above results arose from continuing operations.
* Earnings before interest, taxation, depreciation and amortisation.
Consolidated Balance Sheet
as at 30 June 2006
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2006 2005 2005
#'000 #'000 #'000
---------------------- --------- ----------- ----------
Fixed assets
Intangible assets 44,710 47,850 46,230
Tangible assets 7,676 8,193 7,823
Investments - 70 -
---------------------- --------- ----------- ----------
52,386 56,113 54,053
---------------------- --------- ----------- ----------
Current assets
Stocks 5,328 4,428 4,897
Debtors 16,268 16,636 15,676
Cash at bank and in hand 6,658 6,937 8,253
---------------------- --------- ----------- ----------
28,254 28,001 28,826
---------------------- --------- ----------- ----------
Creditors: due within one year
Finance debt (5,204) (2,819) (5,330)
Other creditors (14,742) (16,392) (15,247)
---------------------- --------- ----------- ----------
(19,946) (19,211) (20,577)
---------------------- --------- ----------- ----------
Net current assets 8,308 8,790 8,249
---------------------- --------- ----------- ----------
Total assets less current liabilities 60,694 64,903 62,302
---------------------- --------- ----------- ----------
Creditors: due after more than one year
Finance debt (33,478) (10,334) (35,958)
Provisions for liabilities and charges (346) (315) (399)
---------------------- --------- ----------- ----------
Net assets excluding net pension liability 26,870 54,254 25,945
Net pension liability (3,065) (3,797) (2,999)
---------------------- --------- ----------- ----------
Net assets including net pension liability 23,805 50,457 22,946
---------------------- --------- ----------- ----------
Capital and reserves
Called up share capital 123 123 123
Merger reserve 2,033 2,033 2,033
Profit and loss account 21,649 48,301 20,790
---------------------- --------- ----------- ----------
Total equity shareholders' funds 23,805 50,457 22,946
---------------------- --------- ----------- ----------
Consolidated Cash Flow Statement
for the six months to 30 June 2006
Unaudited Unaudited Audited
six months six months year ended
to 30 June to 30 June 31 December
2006 2005 2005
#'000 #'000 #'000
----------------------- --------- ----------- ---------
Net cash inflow from operating
activities 6425 6,010 10,193
----------------------- --------- ----------- ---------
Return on investments and servicing of
finance
Interest received 64 59 120
Interest paid (962) (392) (1,326)
----------------------- --------- ----------- ---------
Net cash outflow from return on
investments (898) (333) (1,206)
and servicing of finance
----------------------- --------- ----------- ---------
Taxation
Corporation tax paid (2214) (3,262) (3,629)
----------------------- --------- ----------- ---------
Capital expenditure
Payments to acquire intangible fixed
assets (46) - (16)
Payments to acquire tangible fixed
assets (967) (1,099) (1,821)
Receipts from sales of tangible fixed
assets 187 199 292
Receipt from sale of investment - - 1544
----------------------- --------- ----------- ---------
Net cash outflow for capital
expenditure (826) (900) (1)
----------------------- --------- ----------- ---------
Net cash outflow for acquisitions - - (516)
----------------------- --------- ----------- ---------
Equity dividends paid to shareholders (1476) - -
----------------------- --------- ----------- ---------
Net cash inflow/(outflow) before
financing 1,011 1,515 (4,841)
----------------------- --------- ----------- ---------
Financing
Purchase of own shares - (104) (104)
New long-term loans - - 30,000
Tender offer - - (30,007)
Repayment of long-term loans (2,606) (2,197) (4,200)
----------------------- --------- ----------- ---------
Net cash outflow from financing (2,606) (2,301) (4,311)
----------------------- --------- ----------- ---------
(Decrease)/increase in cash in the
period (1,595) (786) 530
----------------------- --------- ----------- ---------
Consolidated Statement of Total Recognised Gains and Losses
Unaudited Unaudited Audited
6 months to 6 months to year ended
30 June 30 June 31 December
2006 2005 2005
#'000 #'000 #'000
------------------------ --------- --------- ----------
Profit for the financial period 2,252 2,604 4,477
Currency translation differences on
foreign currency net investments 83 (518) (264)
Actuarial (loss)/gain recognised in
pension - (62) 469
Movement on deferred tax relating to
pension scheme - 19 (143)
------------------------ --------- --------- ----------
Total recognised gains and losses
relating to the period 2,335 2,043 4,539
------------------------ --------- --------- ----------
Reconciliation of Movement in Group Shareholders' Funds
Unaudited Unaudited Audited
6 months to 6 months to year ended
30 June 30 June 31 December
2006 2005 2005
#'000 #'000 #'000
------------------------- --------- --------- ---------
Profit for the financial period 2,252 2,604 4,477
Dividends (1,476) - -
Consideration for the purchase of own
shares - (104) (104)
Currency translation differences on
foreign currency net investments 83 (518) (264)
Actuarial (loss)/gain recognised in
pension scheme (note 4) - (62) 469
Movement on deferred tax relating to
pension scheme 19 (143)
Tender Offer - - (30,007)
------------------------- --------- --------- ---------
Net increase/(decrease) in
shareholders' funds 859 1,939 (25,572)
Shareholders' funds at the beginning
of the period 22,946 48,518 48,518
------------------------- --------- --------- ---------
Shareholders' funds at the end of the
period 23,805 50,457 22,946
------------------------- --------- --------- ---------
Notes
1. Nature of information
The financial information contained in this unaudited interim statement does not
constitute statutory accounts within the meaning of section 240 of the Companies
Act 1985. The financial information for the six months ended 30 June 2006 is
unaudited and has been prepared on the basis of the accounting policies set out
in the Group's 2005 Report and Accounts. Comparative figures for the year ended
31 December 2005 have been extracted from the statutory accounts for the year
ended 31 December 2005 which have been delivered to the Registrar of Companies.
The report of the auditors on those accounts was unqualified and did not contain
a statement under sections 237(2) or 237(3) of the Companies Act 1985.
2. Earnings per share
The calculation of basic earnings per ordinary share is based on the profit on
ordinary activities after taxation of #2,252,000 (2005: #2,604,000) and on
12,323,198 (2005: 14,459,001) 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. The revised weighted average number of shares is 12,323,198 (2005:
14,473,038). After taking into account the effect of dilutive securities, the
basic EPS and adjusted EPS figures are unaltered.
The calculation of adjusted earnings per ordinary share is based on the above
weighted average and on adjusted earnings which comprise:
Unaudited Unaudited Audited
six months six months year ended
to 30 June to 30 June 31 December
2006 2005 2005
#'000 #'000 #'000
--------------------------- -------- ---------- ---------
Profit on ordinary activities after
taxation 2,252 2,604 4,477
Eliminate effect of:
Amortisation of goodwill 1,566 1,519 3,133
--------------------------- -------- ---------- ---------
Adjusted earnings 3,818 4,123 7,610
--------------------------- -------- ---------- ---------
Adjusted earnings per ordinary share 31.0p 28.5p 56.8p
Basic earnings per ordinary share 18.3p 18.0p 33.4p
--------------------------- -------- ---------- ---------
3. Taxation
The taxation charge for the period (45%) appears high due principally to the
non-deductibility for taxation purposes of the amortisation of goodwill.
4. Actuarial gain/(loss) recognised in pension scheme
In common with many other companies, the Group has not prepared an actuarial
valuation of pension scheme assets and liabilities for the 2006 interim
statement. In accordance with FRS17 such a valuation will be prepared for the
purposes of the Group's 2006 Report and Accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
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