Lon.sec Regulatory News (LSC)

London Security plc

Final Results for the Year Ended 31 December 2016

CHAIRMAN'S STATEMENT

FINANCIAL HIGHLIGHTS

Financial highlights of the audited results for the year ended 31 December 2016 compared with the year ended 31 December 2015 are as follows:

· revenue of £114.8 million (2015: £101.2 million);

· operating profit before depreciation and amortisation of £26.3 million (2015: £23.2 million);

· operating profit of £20.9 million (2015: £18.5 million);

· profit after income tax of £13.8 million (2015: £12.3 million); and

· a dividend per share of £0.80 (2015: £0.68).

TRADING REVIEW

The financial highlights illustrate that the Group's revenue increased by £13.6 million (13.4%) to £114.8 million. However, these results are impacted by the movement in the Euro to Sterling average exchange rate, which has decreased from 1.38 to 1.23. This movement in exchange rate had a favourable effect of £9.8 million on reported revenue. If the 2016 results had been translated at 2015 rates, revenue would have been £105.0 million instead of £114.8 million (increase of 3.8% on prior year).

Operating profit increased by £2.4 million (13.0%) to £20.9 million. Adjusting for the change in the exchange rate on the same basis as above, operating profit would have been £18.7 million instead of £20.9 million (increase of 1.1%). A more detailed review of this year's performance is given in the Financial Review and the Strategic Report.

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 prices where an adequate return is envisaged by the Board. In the year under review the Group has consolidated its presence in Belgium, the Netherlands and the UK with the acquisitions of service contracts from 15 smaller well established businesses for integration into the Group's existing subsidiaries. In addition, with the acquisition of One Protect in France and Ludwig in Germany the Group has expanded its business into two new countries.

MANAGEMENT AND STAFF

2016 was a year in which the staff performed well and, on your behalf, I would like to express thanks and appreciation for their contribution. The Group recognises that we can only achieve our aims with talented and dedicated colleagues who provide outstanding customer service in every area of the business.

DIVIDENDS

A final dividend in respect of 2015 of £0.40 per ordinary share was paid to shareholders on 8 July 2016. An interim dividend in respect of 2016 of £0.40 per ordinary share was paid to shareholders on 8 December 2016. The Board is recommending the payment of a final dividend in respect of 2016 of £0.40 per ordinary share to be paid on 5 July 2017 to shareholders on the register on 9 June 2017. The shares will be marked ex-dividend on 8 June 2017.

FUTURE PROSPECTS

We are experiencing increased competition in our core market and customer care is becoming increasingly important. To retain our valued customers we need to strive to serve them at the highest possible level. We do not expect the economic environment to get any easier in 2017. Nonetheless your Group remains in a strong position and will continue to focus on meeting the needs of our customers and our shareholders.

ANNUAL GENERAL MEETING

The Annual General Meeting will be held at 2 Eaton Gate, London SW1W 9BJ on 21 June 2017 at 2 pm. 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. Your Directors look forward to meeting you at that time.

J.G. Murray

Chairman

27 April 2017

Consolidated income statement

for the year ended 31 December 2016

* Earnings before interest, tax, depreciation and amortisation.

The above results are all as a result of continuing operations.

Consolidated statement of comprehensive income

for the year ended 31 December 2016

Consolidated statement of changes in equity

for the year ended 31 December 2016

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 2016

Consolidated statement of cash flow

for the year ended 31 December 2016

Notes to the financial statements

for the year ended 31 December 2016

1 Earnings per share

The calculation of basic earnings per ordinary share ("EPS") is based on the profit on ordinary activities after taxation of £13,783,000 (2015: £12,269,000) and on 12,261,477 (2015: 12,261,477) 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. 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.

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 2016 have been extracted from the full accounts of the Group for that year which received an unqualified auditor's report and which have not yet been delivered to the Registrar of Companies. The financial information for the year ended 31 December 2015 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The report of the auditor on those filed accounts was unqualified. The accounts for the year ended 31 December 2016 and 31 December 2015 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 11 May 2016. A copy of the annual report and accounts can be found on the company's webpage (www.londonsecurity.org).

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