TIDMLSC
RNS Number : 7034R
London Security PLC
05 May 2009
LONDON SECURITY PLC
05 May 2009
PRELIMINARY RESULTS
FINANCIAL HIGHLIGHTS
Set out below are the financial highlights of the audited results for the year
ended 31 December 2008:
* Turnover of GBP74.9million (2007: GBP66.6million)
* Operating profit before depreciation of GBP21.6million (2007: GBP18.8million)
* Operating profit of GBP18.9million (2007: GBP16.8million)
TRADING REVIEW
The financial highlights illustrate that the Group's turnover increased by 12.4%
to GBP74.9 million and operating profit increased by 12% to GBP18.9 million.
However these results partially reflect the movement in the Sterling to Euro
exchange rate which has declined from 1.46 to 1.26. If the 2008 results from the
European subsidiaries had been translated at 2007 rates turnover would have
increased by 1.5% to GBP67.6 million and operating profit would have decreased
by 0.6% to GBP16.7 million, compared to 2007.
In mainland Europe, the Group has continued to build upon its strong position in
servicing fire extinguishers and hose reels and growing our new activities
through our multi-service strategy offering customers a complete range of
services around the first intervention on fires and first-aid. This strategy has
enabled the Group's evolution from solely an extinguisher supplier to the
customers' safety partner. In addition the Group has made a significant
acquisition in Belgium.
In the UK, the profit decrease reflects a reduction in the number of
extinguisher units serviced. This has been partially offset by stable turnover
in our alarms business which generated increased operating profit in 2008.
Management continues to invest in training of the field force, and identifying
cost efficiencies.
ACQUISITIONS
In September 2008, the Group acquired the contracts, and use of the brand name
Somati in Belgium. This business unit has added GBP2.3 million to turnover since
the acquisition in September. In the UK we have acquired contracts to service
fire equipment from acquisitions. No fixed overhead was added as a result of
these UK acquisitions.
It remains a principal aim of the Group to grow through acquisitions.
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.
A strategy was implemented in 2006 to replace the cold-calling field sales force
with an acquisition team. This has started to escalate and is proving successful
in growing the business for the future.
MANAGEMENT AND STAFF
2008 was a year in which the staff performed well and, on your behalf, I would
like to express thanks and appreciation for their contribution.
DIVIDENDS
A first interim dividend in respect of 2008 of GBP0.57 per ordinary share was
paid to shareholders on 25 April 2008. A second interim dividend of GBP0.73 per
ordinary share was paid on 22 May 2008 to shareholders on the register at 30
April 2008.
The Board is not recommending the payment of a final dividend in respect of
2008.
Dividend policy continues to be reviewed regularly by the Board.
FINANCING
In order to pay the interim dividends referred to above the Group arranged an
additional GBP15 million of bank loans with Lloyds Bank plc.
In order to finance the acquisition of Somati's assets, customer list, and brand
name referred to above, the Group arranged GBP3million of bank loans with Lloyds
Bank plc.
FUTURE PROSPECTS
The outlook for 2009 is for a downturn in revenue and profitability due to world
economic conditions. Despite this, our Group is in a strong position to deal
with the recession.
Consolidated Income Statement
For the year ended 31 December 2008
+------------+-----------+-----------------------------+---+------------+------------+-----------+------------+------------+------------+------------+
| | | | | | | | | 2008 | 2007 |
+------------+-----------+---------------------------------+------------+------------+-----------+------------+------------+------------+------------+
| | | | | | | | Note | GBP'000 | GBP'000 |
+------------+-----------+---------------------------------+------------+------------+-----------+------------+------------+------------+------------+
| Revenue | | | | | | | | 74,892 | 66,605 |
+------------+-----------+---------------------------------+------------+------------+-----------+------------+------------+------------+------------+
| Cost of | | | | | | | | (12,618) | (11,351) |
| sales | | | | | | | | | |
+------------+-----------+---------------------------------+------------+------------+-----------+------------+------------+------------+------------+
| Gross | | | | | | | | 62,274 | 55,254 |
| profit | | | | | | | | | |
+------------+-----------+---------------------------------+------------+------------+-----------+------------+------------+------------+------------+
| Distribution costs | | | | | | | (27,051) | (22,453) |
+------------------------+---------------------------------+------------+------------+-----------+------------+------------+------------+------------+
| Administrative | | | | | | | (16,346) | (16,008) |
| expenses | | | | | | | | |
+------------------------+---------------------------------+------------+------------+-----------+------------+------------+------------+------------+
| EBITDA* | | | | 21,592 | 18,785 |
+------------------------------------------------------------------------------------+-----------+------------+------------+------------+------------+
| Depreciation and amortisation | | | | | (2,715) | (1,992) |
+-----------------------------------------------------------------------+------------+-----------+------------+------------+------------+------------+
| Operating profit | | | | | | | 18,877 | 16,793 |
+------------------------+---------------------------------+------------+------------+-----------+------------+------------+------------+------------+
| Profit on disposal of subsidiary undertakings | | | | | -- | 4,216 |
+-----------------------------------------------------------------------+------------+-----------+------------+------------+------------+------------+
| Finance income | | | | | | | 1,679 | 952 |
+------------------------------------------------------+---+------------+------------+-----------+------------+------------+------------+------------+
| Finance | | | | | | | | (3,362) | (2,652) |
| costs | | | | | | | | | |
+------------+-----------------------------------------+---+------------+------------+-----------+------------+------------+------------+------------+
| Exchange loss on foreign currency | | | | | | | (7,654) | (2,097) |
+------------------------------------------------------+---+------------+------------+-----------+------------+------------+------------+------------+
| Finance costs - net | | | | | | | (9,337) | (3,797) |
+------------------------------------------------------+---+------------+------------+-----------+------------+------------+------------+------------+
| Profit before income tax | | | | | | | 9,540 | 17,212 |
+------------------------------------------------------+---+------------+------------+-----------+------------+------------+------------+------------+
| Income tax expense | | | | | | | (3,983) | (4,017) |
+------------------------------------------------------+---+------------+------------+-----------+------------+------------+------------+------------+
| Profit for the year attributable to equity shareholders of the Company | | | 5,557 | 13,195 |
+------------------------------------------------------------------------------------------------+------------+------------+------------+------------+
| Earnings per share | | | | | | | | |
+------------------------+---------------------------------+------------+------------+-----------+------------+------------+------------+------------+
| Basic and diluted | | | | | | 1 | 45.2p | 107.3p |
+------------------------+---------------------------------+------------+------------+-----------+------------+------------+------------+------------+
| Dividends | | | | | | | | | |
+------------+-----------+---------------------------------+------------+------------+-----------+------------+------------+------------+------------+
| Dividends paid per | | | | | | | 130.0p | 50.0p |
| share | | | | | | | | |
+------------+-----------+-----------------------------+---+------------+------------+-----------+------------+------------+------------+------------+
* Earnings before interest, depreciation, amortisation and impairment charges.
Consolidated Balance Sheet
As at 31 December 2008
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| | | | | | | | | 2008 | 2007 |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| | | | | | | | | GBP'000 | GBP'000 |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Assets | | | | | | | | | |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Non-current assets | | | | | | | | |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Property, plant and equipment | | | | | | 9,787 | 7,863 |
+-------------------------------------+-----------+-----------+-----------+------------+------------+------------+------------+
| Intangible assets | | | | | | | 53,210 | 47,236 |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Deferred tax asset | | | | | | | 743 | 743 |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| | | | | | | | | 63,740 | 55,842 |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Current assets | | | | | | | | |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Inventories | | | | | | | | 8,545 | 5,687 |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Trade and other receivables | | | | | | 20,820 | 14,358 |
+-------------------------------------+-----------+-----------+-----------+------------+------------+------------+------------+
| Cash and cash | | | | | | | 10,875 | 11,807 |
| equivalents | | | | | | | | |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| | | | | | | | | 40,240 | 31,852 |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Total | | | | | | | | 103,980 | 87,694 |
| assets | | | | | | | | | |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Liabilities | | | | | | | | | |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Current liabilities | | | | | | | | |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Trade and other | | | | | | | (17,148) | (14,475) |
| payables | | | | | | | | |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Income tax liabilities | | | | | | | (1,548) | (1,891) |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Borrowings | | | | | | | | (7,488) | (5,388) |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Provision for liabilities and | | | | | | -- | (49) |
| charges | | | | | | | |
+-------------------------------------+-----------+-----------+-----------+------------+------------+------------+------------+
| | | | | | | | | (26,184) | (21,803) |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Non-current liabilities | | | | | | | | |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Trade and other | | | | | | | -- | (43) |
| payables | | | | | | | | |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Borrowings | | | | | | | | (46,241) | (27,022) |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Derivative financial instruments | | | | | | (212) | (19) |
+-------------------------------------+-----------+-----------+-----------+------------+------------+------------+------------+
| Deferred tax | | | | | | | (41) | (100) |
| liabilities | | | | | | | | |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Retirement benefit obligations | | | | | | (742) | (949) |
+-------------------------------------+-----------+-----------+-----------+------------+------------+------------+------------+
| Provision for liabilities and | | | | | | (46) | (130) |
| charges | | | | | | | |
+-------------------------------------+-----------+-----------+-----------+------------+------------+------------+------------+
| | | | | | | | | (47,282) | (28,263) |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Total liabilities | | | | | | | (73,466) | (50,066) |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Net assets | | | | | | | | 30,514 | 37,628 |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Shareholders' equity | | | | | | | | |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Ordinary shares | | | | | | | 123 | 123 |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Merger reserve | | | | | | | 2,033 | 2,033 |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Other | | | | | | | | 5,124 | 1,071 |
| reserves | | | | | | | | | |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Retained earnings | | | | | | | 23,234 | 34,401 |
+-------------------------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
| Total shareholders' equity | | | | | | 30,514 | 37,628 |
+-------------+-----------+-----------+-----------+-----------+-----------+------------+------------+------------+------------+
Consolidated Cash Flow Statement
For the year ended 31 December 2008
+------------+------------+------------+------------+------------+------------+------------+------------+------------+------------+
| | | | | | | | | 2008 | 2007 |
+------------+------------+------------+------------+------------+------------+------------+------------+------------+------------+
| | | | | | | | | GBP'000 | GBP'000 |
+------------+------------+------------+------------+------------+------------+------------+------------+------------+------------+
| Cash flows from operating activities | | | | | | | |
+--------------------------------------+------------+------------+------------+------------+------------+------------+------------+
| Cash generated from operations | | | | | | 15,552 | 19,328 |
+--------------------------------------+------------+------------+------------+------------+------------+------------+------------+
| Interest | | | | | | | | (2,687) | (2,033) |
| paid | | | | | | | | | |
+------------+------------+------------+------------+------------+------------+------------+------------+------------+------------+
| Income tax paid | | | | | | | (4,826) | (4,556) |
+-------------------------+------------+------------+------------+------------+------------+------------+------------+------------+
| Net cash generated from operating activities | | | | | 8,039 | 12,739 |
+---------------------------------------------------+------------+------------+------------+------------+------------+------------+
| Cash flows from investing activities | | | | | | | |
+--------------------------------------+------------+------------+------------+------------+------------+------------+------------+
| Acquisition of subsidiary | | | | | | (222) | (231) |
| undertakings | | | | | | | |
+--------------------------------------+------------+------------+------------+------------+------------+------------+------------+
| Net proceeds from sale of subsidiary undertakings | | | | | -- | 4,587 |
+---------------------------------------------------+------------+------------+------------+------------+------------+------------+
| Purchases of property, plant and equipment | | | | | (2,923) | (2,707) |
+---------------------------------------------------+------------+------------+------------+------------+------------+------------+
| Proceeds from sale of property, plant and equipment | | | | 426 | 401 |
+----------------------------------------------------------------+------------+------------+------------+------------+------------+
| Purchases of intangible assets | | | | | | (5,156) | (578) |
+--------------------------------------+------------+------------+------------+------------+------------+------------+------------+
| Proceeds from sale of intangible assets | | | | | 31 | 18 |
+---------------------------------------------------+------------+------------+------------+------------+------------+------------+
| Interest received | | | | | | | 1,188 | 278 |
+-------------------------+------------+------------+------------+------------+------------+------------+------------+------------+
| Net cash generated by/(used in) investing activities | | | | (6,656) | 1,768 |
+----------------------------------------------------------------+------------+------------+------------+------------+------------+
| Cash flows from financing activities | | | | | | | |
+--------------------------------------+------------+------------+------------+------------+------------+------------+------------+
| Purchase of own shares | | | | | | | -- | (97) |
+-------------------------+------------+------------+------------+------------+------------+------------+------------+------------+
| Repayments of borrowings | | | | | | (4,535) | (5,133) |
+--------------------------------------+------------+------------+------------+------------+------------+------------+------------+
| New long term loans | | | | | | 18,200 | -- |
+--------------------------------------+------------+------------+------------+------------+------------+------------+------------+
| Dividends paid to Company's shareholders | | | | | (15,980) | (6,146) |
+---------------------------------------------------+------------+------------+------------+------------+------------+------------+
| Net cash used in financing | | | | | | (2,315) | (11,376) |
| activities | | | | | | | |
+--------------------------------------+------------+------------+------------+------------+------------+------------+------------+
| Net (decrease)/increase in cash in | | | | | | (932) | 3,131 |
| the year | | | | | | | |
+--------------------------------------+------------+------------+------------+------------+------------+------------+------------+
| Cash and cash equivalents at beginning of the | | | | | 11,807 | 8,676 |
| year | | | | | | |
+---------------------------------------------------+------------+------------+------------+------------+------------+------------+
| Cash and cash equivalents at the end of the year | | | | 10,875 | 11,807 |
+------------+------------+------------+------------+------------+------------+------------+------------+------------+------------+
Consolidated statement of recognised income and expense
for the year ended 31 December 2008
+-----------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| | | | | | | | | 2008 | 2007 |
+-----------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| | | | | | | | Notes | GBP'000 | GBP'000 |
+-----------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Profit for the financial | | | | | | | 5,557 | 13,195 |
| year | | | | | | | | |
+-----------------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Currency translation differences on foreign currency net investments | | 25 | 4,053 | 1,328 |
+-----------------------------------------------------------------------------+-----------+-----------+-----------+-----------+
| Actuarial (loss)/gain recognised in pension scheme | | | | 22 | (708) | 1,473 |
+-----------------------------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Movement on deferred tax relating to pension scheme | | | | 20 | (36) | (988) |
+-----------------------------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Net income recognised directly in equity | | | | | 3,309 | 1,813 |
+-----------------------------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Total recognised income for the year attributable to equity shareholders | | | | |
+-----------------------------------------------------------------------------+-----------+-----------+-----------+-----------+
| of the Company | | | | | | | | 8,866 | 15,008 |
+-----------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
1 Earnings per Share
The calculation of basic earnings per ordinary share ("EPS") is based on the
profit on ordinary activities after taxation of GBP5,557,000 (2007:
GBP13,195,000) and on 12,294,798 (2007: 12,295,811) ordinary shares, being the
weighted average number of ordinary shares in issue during the year.
For diluted earnings per ordinary share, the weighted average number of shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. The only potential ordinary shares in the Group are in respect of the
unapproved share option scheme. The revised weighted average number of shares is
12,296,487 (2007: 12,297,500). After taking into account the effect of dilutive
securities, the basic EPS and adjusted EPS figures are unaltered.
+------------+------------+------------+------------+------------+------------+------------+------------+---+-------------------------------+------------+
| | | | | | | 2008 | | 2007 |
+------------+------------+------------+------------+------------+------------+-------------------------+---+--------------------------------------------+
| | | | | | | GBP'000 | Pence | GBP'000 | Pence |
+------------+------------+------------+------------+------------+------------+------------+------------+-----------------------------------+------------+
| Profit on ordinary activities after taxation | | | 5,557 | 45.2 | 13,195 | 107.3 |
+---------------------------------------------------+------------+------------+------------+------------+-----------------------------------+------------+
| Eliminate effect of: | | | | | | | | |
+-------------------------+------------+------------+------------+------------+------------+------------+-----------------------------------+------------+
| - Profit on disposal of subsidiary undertakings | | | -- | -- | (4,216) | (34.3) |
+---------------------------------------------------+------------+------------+------------+------------+-----------------------------------+------------+
| Adjusted profit for the period | | | | 5,557 | 45.2 | 8,979 | 73.0 |
+------------+------------+------------+------------+------------+------------+------------+------------+---+-------------------------------+------------+
2This preliminary announcement does not constitute the Company's statutory
accounts within the meaning of Section 240 of the Companies Act 1985.
The results for the year ended 31 December 2008 have been extracted from the
full accounts of the Group for that year which received an unqualified auditors'
report and which have not yet been delivered to the Registrar of Companies. The
financial information for the year ended 31 December 2007 is derived from the
statutory accounts for that year, which have been delivered to the Registrar of
Companies. The report of the auditors on those filed accounts was unqualified.
The accounts for the year ended 31 December 2008 and 31 December 2007 did not
contain a statement under s237(2) or s237(3) 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 15 May 2009. 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 372852
This information is provided by RNS
The company news service from the London Stock Exchange
END
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