TIDMLSC
RNS Number : 4209L
London Security PLC
06 May 2010
LONDON SECURITY PLC
6 MAY 2010
PRELIMINARY RESULTS
FINANCIAL HIGHLIGHTS
Financial highlights of the audited results for the year ended 31 December 2009
compared with the year ended 31 December 2008 are as follows:
· turnover of GBP86.0 million (2008: GBP74.9 million);
· operating profit before depreciation and amortisation of GBP23.2 million
(2008: GBP21.6 million); and
· operating profit of GBP19.8 million (2008: GBP18.9 million).
TRADING REVIEW
The financial highlights illustrate that the Group's turnover increased by
GBP11.1 million (14.8%) to GBP86.0 million and operating profit increased by
GBP0.9 million (4.8%) to GBP19.8 million.
The Group has continued to support and develop its traditional business roots in
servicing fire extinguishers, hose reels and fire alarms and growing our new
activities through our multi-service strategy offering. This was achieved
through a series of training and employee development programmes, which has
resulted in improved customer retention and greater motivation of the workforce.
The Group continues its evolution from solely an extinguisher supplier to the
customers' safety partner.
In summary 2009 was a difficult year, but with the benefit of acquisitions and a
favourable exchange rate we have still recorded creditable results despite the
testing economic environment.
ACQUISITIONS
In 2008 the Group acquired the contracts and brand name of Somati FIE N.V. in
Belgium. This new business unit has now been integrated into our operations and
has contributed fully towards our results in 2009.
In the UK we have continued to acquire further contracts to service fire
equipment through smaller acquisitions. No fixed overhead was added as a result
of these UK 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.
MANAGEMENT AND STAFF
2009 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
The Board is not recommending the payment of a final dividend in respect of
2009.
Dividend policy continues to be reviewed regularly by the Board.
FINANCING
In 2008 the Group suffered a charge of GBP7.7 million as a result of exchange
losses on foreign currency loans. In 2009 the Group implemented a net investment
hedge against this risk which permits the Group to recognise exchange rate
volatility through reserves. Falling interest rates have resulted in lower
interest payable and receivable within finance costs.
FUTURE PROSPECTS
2010 will also be a challenging year, but with the effect of past and potential
acquisitions and our multi-service offering, we are in a strong position to face
the challenges that will invariably present. Therefore we expect to continue to
deliver strong results in the future.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held at 10 Bruton Street, 5th Floor, London
W1J 6PX on 9 June 2010 at 11a.m. You will find enclosed a form of proxy for use
at that Meeting which you are requested to complete and return in accordance
with the instructions on the form. I shall, along with your Directors, look
forward to meeting you at that time.
J.G. MURRAY
Chairman
4 May 2010
Consolidated Income Statement
For the year ended 31 December 2009
+--------------------------------------+----------+----------+----------+
| | | 2009 | 2008 |
+--------------------------------------+----------+----------+----------+
| | Note | GBP'000 | GBP'000 |
+--------------------------------------+----------+----------+----------+
| Revenue | | 85,968 | 74,892 |
+--------------------------------------+----------+----------+----------+
| Cost of sales | | (14,507) | (12,618) |
+--------------------------------------+----------+----------+----------+
| Gross profit | | 71,461 | 62,274 |
+--------------------------------------+----------+----------+----------+
| Distribution costs | | (32,520) | (27,051) |
+--------------------------------------+----------+----------+----------+
| Administrative expenses | | (19,177) | (16,346) |
+--------------------------------------+----------+----------+----------+
| EBITDA* | | 23,171 | 21,592 |
+--------------------------------------+----------+----------+----------+
| Depreciation and amortisation | | (3,407) | (2,715) |
+--------------------------------------+----------+----------+----------+
| Operating profit | | 19,764 | 18,877 |
+--------------------------------------+----------+----------+----------+
| Finance income | | 560 | 1,679 |
+--------------------------------------+----------+----------+----------+
| Finance costs | | (2,021) | (3,362) |
+--------------------------------------+----------+----------+----------+
| Exchange loss on foreign currency | | - | (7,654) |
+--------------------------------------+----------+----------+----------+
| Finance costs - net | | (1,461) | (9,337) |
+--------------------------------------+----------+----------+----------+
| Profit before income tax | | 18,303 | 9,540 |
+--------------------------------------+----------+----------+----------+
| Income tax expense | | (3,772) | (3,983) |
+--------------------------------------+----------+----------+----------+
| Profit for the year attributable to | | 14,531 | 5,557 |
| equity shareholders of the Company | | | |
+--------------------------------------+----------+----------+----------+
| Earnings per share | | | |
+--------------------------------------+----------+----------+----------+
| Basic and diluted | 1 | 118.2p | 45.2p |
+--------------------------------------+----------+----------+----------+
| Dividends | | | |
+--------------------------------------+----------+----------+----------+
| Dividends paid per share | | - | 130.0p |
+--------------------------------------+----------+----------+----------+
* Earnings before interest, tax, depreciation, amortisation and impairment
charges.
Consolidated statement of comprehensive income
for the year ended 31 December 2009
+--------------------------------------+----------+----------+----------+
| | | 2009 | 2008 |
+--------------------------------------+----------+----------+----------+
| | | GBP'000 | GBP'000 |
+--------------------------------------+----------+----------+----------+
| Profit for the financial year | | 14,531 | 5,557 |
+--------------------------------------+----------+----------+----------+
| Other comprehensive income: | | | |
+--------------------------------------+----------+----------+----------+
| Currency translation differences on | | (1,366) | 4,053 |
| foreign currency net investments net | | | |
| of tax | | | |
+--------------------------------------+----------+----------+----------+
| Foreign currency loan hedges net of | | 2,552 | - |
| tax | | | |
+--------------------------------------+----------+----------+----------+
| Actuarial loss recognised in pension | | (397) | (708) |
| scheme | | | |
+--------------------------------------+----------+----------+----------+
| Movement on deferred tax relating to | | (177) | (36) |
| pension scheme | | | |
+--------------------------------------+----------+----------+----------+
| Other comprehensive income for the | | 612 | 3,309 |
| year, net of tax | | | |
+--------------------------------------+----------+----------+----------+
| Total comprehensive income for the | | 15,143 | 8,866 |
| year | | | |
+--------------------------------------+----------+----------+----------+
Consolidated Statement of Changes in Equity
For the year ended 31 December 2009
+-------------------+----------+----------+----------+----------+----------+
| | | | | Profit | |
+-------------------+----------+----------+----------+----------+----------+
| | Share | Merger | Other | and loss | |
+-------------------+----------+----------+----------+----------+----------+
| | capital | reserve | reserve | account | Total |
+-------------------+----------+----------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------+----------+----------+----------+----------+----------+
| At 1 January 2008 | 123 | 2,033 | 1,071 | 34,401 | 37,628 |
+-------------------+----------+----------+----------+----------+----------+
| Profit for the | - | - | - | 5,557 | 5,557 |
| financial period | | | | | |
+-------------------+----------+----------+----------+----------+----------+
| Transactions with | | | | | - |
| owners: | | | | | |
+-------------------+----------+----------+----------+----------+----------+
| Dividends | - | - | - | (15,980) | (15,980) |
+-------------------+----------+----------+----------+----------+----------+
| Other | | | | | |
| comprehensive | | | | | |
| income: | | | | | |
+-------------------+----------+----------+----------+----------+----------+
| Exchange | - | - | 4,053 | - | 4,053 |
| adjustments | | | | | |
+-------------------+----------+----------+----------+----------+----------+
| Actuarial loss on | - | - | - | (708) | (708) |
| pension scheme | | | | | |
+-------------------+----------+----------+----------+----------+----------+
| Movement on | - | - | - | (36) | (36) |
| deferred tax | | | | | |
| relating to | | | | | |
| pension asset | | | | | |
+-------------------+----------+----------+----------+----------+----------+
| At 1 January 2009 | 123 | 2,033 | 5,124 | 23,234 | 30,514 |
+-------------------+----------+----------+----------+----------+----------+
| Profit for the | - | - | - | 14,531 | 14,531 |
| financial period | | | | | |
+-------------------+----------+----------+----------+----------+----------+
| Other | | | | | |
| comprehensive | | | | | |
| income: | | | | | |
+-------------------+----------+----------+----------+----------+----------+
| Exchange | - | - | (1,366) | - | (1,366) |
| adjustments | | | | | |
+-------------------+----------+----------+----------+----------+----------+
| Actuarial loss on | - | - | - | (397) | (397) |
| pension scheme | | | | | |
+-------------------+----------+----------+----------+----------+----------+
| Movement on | - | - | - | (177) | (177) |
| deferred tax | | | | | |
| relating to | | | | | |
| pension asset | | | | | |
+-------------------+----------+----------+----------+----------+----------+
| Foreign currency | - | - | 2,552 | - | 2,552 |
| loan hedges net | | | | | |
| of tax | | | | | |
+-------------------+----------+----------+----------+----------+----------+
| At 31 December | 123 | 2,033 | 6,310 | 37,191 | 45,657 |
| 2009 | | | | | |
+-------------------+----------+----------+----------+----------+----------+
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 2009
+------------------------------------+---------+----------+----------+
| | | 2009 | 2008 |
+------------------------------------+---------+----------+----------+
| | | GBP'000 | GBP'000 |
+------------------------------------+---------+----------+----------+
| Assets | | | |
+------------------------------------+---------+----------+----------+
| Non-current assets | | | |
+------------------------------------+---------+----------+----------+
| Property, plant and equipment | | 8,552 | 9,787 |
+------------------------------------+---------+----------+----------+
| Intangible assets | | 52,427 | 53,210 |
+------------------------------------+---------+----------+----------+
| Deferred tax asset | | 604 | 743 |
+------------------------------------+---------+----------+----------+
| | | 61,583 | 63,740 |
+------------------------------------+---------+----------+----------+
| Current assets | | | |
+------------------------------------+---------+----------+----------+
| Inventories | | 7,804 | 8,545 |
+------------------------------------+---------+----------+----------+
| Trade and other receivables | | 17,849 | 20,820 |
+------------------------------------+---------+----------+----------+
| Cash and cash equivalents | | 19,070 | 10,875 |
+------------------------------------+---------+----------+----------+
| | | 44,723 | 40,240 |
+------------------------------------+---------+----------+----------+
| Total assets | | 106,306 | 103,980 |
+------------------------------------+---------+----------+----------+
| Liabilities | | | |
+------------------------------------+---------+----------+----------+
| Current liabilities | | | |
+------------------------------------+---------+----------+----------+
| Trade and other payables | | (15,534) | (17,148) |
+------------------------------------+---------+----------+----------+
| Income tax liabilities | | (902) | (1,548) |
+------------------------------------+---------+----------+----------+
| Borrowings | | (7,597) | (7,488) |
+------------------------------------+---------+----------+----------+
| Provision for liabilities and | | (18) | - |
| charges | | | |
+------------------------------------+---------+----------+----------+
| | | (24,051) | (26,184) |
+------------------------------------+---------+----------+----------+
| Non-current liabilities | | | |
+------------------------------------+---------+----------+----------+
| Trade and other payables | | (18) | - |
+------------------------------------+---------+----------+----------+
| Borrowings | | (35,596) | (46,241) |
+------------------------------------+---------+----------+----------+
| Derivative financial instruments | | (296) | (212) |
+------------------------------------+---------+----------+----------+
| Deferred tax liabilities | | (83) | (41) |
+------------------------------------+---------+----------+----------+
| Retirement benefit obligations | | (605) | (742) |
+------------------------------------+---------+----------+----------+
| Provision for liabilities and | | - | (46) |
| charges | | | |
+------------------------------------+---------+----------+----------+
| | | (36,598) | (47,282) |
+------------------------------------+---------+----------+----------+
| Total liabilities | | (60,649) | (73,466) |
+------------------------------------+---------+----------+----------+
| Net assets | | 45,657 | 30,514 |
+------------------------------------+---------+----------+----------+
| Shareholders' equity | | | |
+------------------------------------+---------+----------+----------+
| Ordinary shares | | 123 | 123 |
+------------------------------------+---------+----------+----------+
| Merger reserve | | 2,033 | 2,033 |
+------------------------------------+---------+----------+----------+
| Other reserves | | 6,310 | 5,124 |
+------------------------------------+---------+----------+----------+
| Retained earnings | | 37,191 | 23,234 |
+------------------------------------+---------+----------+----------+
| Total shareholders' equity | | 45,657 | 30,514 |
+------------------------------------+---------+----------+----------+
Consolidated Statement of Cash Flow
For the year ended 31 December 2009
+--------------------------------------+----------+----------+----------+
| | | 2009 | 2008 |
+--------------------------------------+----------+----------+----------+
| | | GBP'000 | GBP'000 |
+--------------------------------------+----------+----------+----------+
| Cash flow from operating activities | | | |
+--------------------------------------+----------+----------+----------+
| Cash generated from operations | | 24,355 | 15,552 |
+--------------------------------------+----------+----------+----------+
| Interest paid | | (1,422) | (2,687) |
+--------------------------------------+----------+----------+----------+
| Income tax paid | | (4,386) | (4,826) |
+--------------------------------------+----------+----------+----------+
| Net cash generated from operating | | 18,547 | 8,039 |
| activities | | | |
+--------------------------------------+----------+----------+----------+
| Cash flow from investing activities | | | |
+--------------------------------------+----------+----------+----------+
| Acquisition of subsidiary | | (375) | (222) |
| undertakings | | | |
+--------------------------------------+----------+----------+----------+
| Purchases of property, plant and | | (1,777) | (2,923) |
| equipment | | | |
+--------------------------------------+----------+----------+----------+
| Proceeds from sale of property, | | 271 | 426 |
| plant and equipment | | | |
+--------------------------------------+----------+----------+----------+
| Purchases of intangible assets | | (607) | (5,156) |
+--------------------------------------+----------+----------+----------+
| Proceeds from sale of intangible | | - | 31 |
| assets | | | |
+--------------------------------------+----------+----------+----------+
| Interest received | | 120 | 1,188 |
+--------------------------------------+----------+----------+----------+
| Net cash used in investing | | (2,368) | (6,656) |
| activities | | | |
+--------------------------------------+----------+----------+----------+
| Cash flows from financing activities | | | |
+--------------------------------------+----------+----------+----------+
| Repayments of borrowings | | (7,984) | (4,535) |
+--------------------------------------+----------+----------+----------+
| New long-term loans | | - | 18,200 |
+--------------------------------------+----------+----------+----------+
| Dividends paid to Company's | | - | (15,980) |
| shareholders | | | |
+--------------------------------------+----------+----------+----------+
| Net cash used in financing | | (7,984) | (2,315) |
| activities | | | |
+--------------------------------------+----------+----------+----------+
| Net increase/(decrease) in cash in | | 8,195 | (932) |
| the year | | | |
+--------------------------------------+----------+----------+----------+
| Cash and cash equivalents at | | 10,875 | 11,807 |
| beginning of the year | | | |
+--------------------------------------+----------+----------+----------+
| Cash and cash equivalents at end of | | 19,070 | 10,875 |
| the year | | | |
+--------------------------------------+----------+----------+----------+
1 Earnings per Share
The calculation of basic earnings per ordinary share ("EPS") is based on the
profit on ordinary activities after taxation of GBP14,531,000 (2008:
GBP5,557,000) and on 12,294,798 (2008: 12,294,798) 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. 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 12,294,798 (2008:
12,296,487). After taking into account the effect of dilutive securities, the
basic EPS and adjusted EPS figures are unaltered.
+-----------------------------+----------+----------+-+--------+----------+
| | 2009 | | 2008 |
+-----------------------------+---------------------+-+-------------------+
| | GBP'000 | Pence | GBP'000 | Pence |
+-----------------------------+----------+----------+----------+----------+
| Profit on ordinary | 14,531 | 118.2 | 5,557 | 45.2 |
| activities after taxation | | | | |
+-----------------------------+----------+----------+----------+----------+
| | | | | | |
+-----------------------------+----------+----------+-+--------+----------+
2 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 2009 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 2008 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 2009 and 31 December 2008 did not
contain a statement under s498 (1) to (4) of the Companies Act 2006 or under
s237(1) to (4) 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 14 May 2010. 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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