Lon.sec Regulatory News (LSC)

5 May 2005 07:01

London Security PLC05 May 2005 LONDON SECURITY PLC ("the Company) 5 May 2005 Preliminary results for the year ended 31 December 2004 London Security presents its results for the year ended 31 December 2004. Financial highlights of the results for the year ended 31 December 2004: • Turnover of £52.3million • Operating profit of £9.5million • Earnings before interest, taxation, depreciation and amortisation ("EBITDA") of £14.2 million • Profit on ordinary activities before taxation of £9.2million Chairman's statement Trading Review The changes in the results are primarily due to marketing cost increases andslightly less buoyant market conditions in some European countries. During 2002and 2003 the Company benefited from a number of market opportunities which arenow levelling. Operating profit at 18.1% of turnover and EBITDA at 27.1% of turnover continueto be industry leading results. We aim to continue to acquire companies in thefire and security sectors to complement and build upon the organic growthdemonstrated in recent times. Acquisitions In December 2004 we acquired MK Fire Limited and TVF (UK) Plc. Both companies are very well represented in fire extinguisher service, firealarm service and fire alarm installation and operate on a nationwide scalewhilst having the majority of the UK business in the more prosperous south ofEngland. These acquisitions will substantially increase turnover in our alarms division,fulfilling our objective to provide a one-stop shop for customers' fireprotection needs. Future prospects The outlook for 2005 is cautiously optimistic. MK Fire and TVF have immediately contributed to the Group's profits. We arecontinuing to expand the alarm operations in the UK and Belgium. The Group is actively developing new improved ranges of extinguishers and plansto launch these products in 2005. As well as being better extinguishers, weexpect to achieve cost efficiencies from implementation of these new ranges. Management and Staff 2004 was a year in which the staff performed well and, on your behalf, I wouldlike to express thanks and appreciation for their contribution. Tender Offer Your Board has been examining ways of returning value to Shareholders and it ispleased to announce that it now proposes, subject to approval of Shareholdersand confirmation of the High Court of the Capital Reduction, to return toShareholders by way of a Tender Offer up to £30.1million. Subject to theconsent of Shareholders, your Board intends that each Shareholder be given theopportunity to sell to Brewin Dolphin Securities Limited, Ordinary Shares heldby him/her on the Record Date at a price of £13.75 per Ordinary Share. Acircular has been posted to Shareholders explaining this proposal in moredetail. Dividends In view of the Tender Offer no final dividend is proposed (2003: 10.0p). On 8 July 2004 the Company announced a special dividend of 42.0p (2003: 0.0p)per ordinary share. The Company had accumulated cash comfortably beyond itsshort to medium-term operational requirements and the Board of Directors felt itwas in the best interest of Shareholders to distribute a part of this surplus. An interim dividend of 3.0p (2003: 3.0p) per Ordinary Share was also paid toShareholders, giving a total dividend for the year of 45.0p (2003: 13.0p) pershare. Consolidated Profit and Loss AccountFor the year ended 31 December 2004 Year ended Year ended 31 December 31 December 2004 2003 £'000 £'000Turnover 52,332 53,760Cost of sales (7,901) (8,201)Gross profit 44,431 45,559Distribution costs (20,740) (20,546)Administrative expenses (14,220) (14,086)Operating profit 9,471 10,927EBITDA** 14,160 15,510Depreciation (1,903) (1,838)Amortisation of goodwill (2,786) (2,745)Operating profit 9,471 10,927Income from fixed asset investments 114 117Net interest payable and similar charges (418) (665)Profit on ordinary activities before taxation 9,167 10,379Taxation (3,777) (4,587)Profit on ordinary activities after taxation 5,390 5,792Dividends (6,508) (1,882)(Sustained loss)/retained profit (1,118) 3,910 Basic and diluted earnings per ordinary share 37.3p 40.0pAdjusted earnings per ordinary share 56.5p 59.0pDividend per ordinary share 45.0p 13.0p All of the above results arose from continuing operations. Turnover, operatingprofit and cash flow attributable to acquisitions have not been separately disclosed on the face of the profit and loss account and the cash flow statement on the grounds of materiality. ** Earnings Before Interest, Taxation, Depreciation and Amortisation Consolidated Balance SheetAs at 31 December 2004 2004 2003 £'000 £'000Fixed assetsIntangible assets 49,684 45,082Tangible assets 8,408 7,791Investments 70 70 58,162 52,943Current assetsStocks 4,052 3,643Debtors 14,929 11,666Cash at bank and in hand 7,723 13,486 26,704 28,795Creditors: amounts falling due within one yearFinance debt (5,489) (4,161)Other creditors (16,854) (15,232) (22,343) (19,393)Net current assets 4,361 9,402Total assets less current liabilities 62,523 62,345 Creditors: amounts falling due after more than one yearFinance debt (9,912) (8,100)Provisions for liabilities and charges (1,662) (1,841)Net assets 50,949 52,404 Capital and reservesCalled up share capital 1,447 1,447Share premium 27,476 27,476Capital redemption reserve 117 117Merger reserve 2,033 2,033Profit and loss account 19,876 21,331Total equity shareholders' funds 50,949 52,404 Consolidated Cash Flow StatementFor the year ended 31 December 2004 Year ended Year ended 31 December 31 December 2004 2003 £'000 £'000Net cash inflow from operating activities 14,884 14,295Return on investments and servicing of financeInterest received 218 231Interest paid (505) (694)Dividends received 114 117Net cash outflow from return on investments and (173) (346)servicing of financeTaxationCorporation tax paid (4,710) (3,696)Capital expenditurePayments to acquire intangible fixed assets (54) (79)Payments to acquire tangible fixed assets (2,208) (2,239)Receipts from sales of tangible fixed assets 644 237Net cash outflow for capital expenditure (1,618) (2,081)Acquisitions and disposalsPayments to acquire subsidiary undertakings (9,185) (359)Payment of deferred consideration on prior year acquisitions - (679)Net cash/(overdraft) acquired with subsidiary undertakings 412 (112)Net cash outflow for acquisitions (8,773) (1,150)Equity dividends paid to shareholders (7,955) (1,159)Net cash (outflow)/inflow before use of (8,345) 5,863financingFinancingPurchase of own shares (120) (171)New long-term loans 7,146 600Repayment of long-term loans (4,444) (3,109)Net cash inflow/(outflow) from financing 2,582 (2,680)(Decrease)/increase in cash in the year (5,763) 3,183 1 Earnings per Share The calculation of basic earnings per ordinary share (EPS) is based on theprofit on ordinary activities after taxation of £5,390,000 (2003 : £5,792,000)and on 14,469,566 (2003 : 14,481,066) ordinary shares, being the weightedaverage number of ordinary shares in issue during the year. For diluted earnings per ordinary share, the weighted average number of sharesin issue is adjusted to assume conversion of all dilutive potential ordinaryshares. The revised weighted average number of shares is 14,482,899 (2003 :14,488,332). After taking into account the effect of dilutive securities, thebasic EPS and adjusted EPS figures are unaltered. The calculation of adjusted earnings per ordinary share is based on 14,469,566(2003 : 14,481,066) ordinary shares in issue prior to 31 December 2004 and onadjusted earnings which comprise: 2004 2003 £'000 pence £'000 penceProfit on ordinary activities after taxation 5,390 37.3 5,792 40.0Eliminate effect: Amortisation of goodwill 2,786 19.2 2,745 19.0Adjusted profit on ordinary activities after taxation 8,176 56.5 8,537 59.0 Adjusted earnings per share figures are given in order that shareholders mayunderstand the importance of goodwill amortisation on the results for the year. 2 This preliminary announcement does not constitute statutory accountswithin the meaning of section 240 of the Companies Act 1985. The results for the year ended 31 December 2004 have been extracted from thefull 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. Theresults for the year ended 31 December 2003 have been extracted from the Group'sstatutory accounts which received an unqualified auditors' report and have beenfiled with the Registrar of Companies. The accounts for the year ended 31December 2004 and 31 December 2003 did not contain a statement under s237(2) ors237(3) of the Companies Act 1985. The preceding statements have been prepared in accordance with applicableaccounting standards on a basis which is consistent with that applied inprevious periods. Enquiries: London Security plcRichard Pollard, Company Secretary 01422 372852 This information is provided by RNS The company news service from the London Stock Exchange