Lon.sec Regulatory News (LSC)

3 May 2006 10:25

London Security PLC03 May 2006 LONDON SECURITY PLC 3 May 2006 Preliminary Results for the year ended 31 December 2005 Financial Highlights Financial highlights of the results for the year ended 31 December 2005: • Turnover of £64.8 million (2004: £52.3million) • Earnings before interest, taxation, depreciation and amortisation ("EBITDA") of £14.3 million (2004: £13.9million) • Operating profit of £9.1 million (2004: £9.3million) • Profit on ordinary activities before taxation of £8.1 million (2004: £8.9million) Trading Review The integration of MK Fire Limited and TVF (UK) Plc is progressing well withboth companies reporting increases in profitability. Both companies are verywell represented in fire extinguisher service, fire alarm service and fire alarminstallation and operate on a nationwide scale whilst having the majority of theUK business in the more prosperous south of England. Operating profit at 14.0% of turnover and EBITDA at 22.0% of turnover continueto be among industry leading results and are expected to increase further as MKFire and TVF continue to improve. We aim to continue to acquire companies inthe fire and security sectors to complement and build upon the organic growthdemonstrated in recent times. The Group disposed of its investment in Sicli Materiel Incendie s.a., inDecember 2005 realising a profit of £1.5million. Future prospects The outlook for 2006 is for continued steady progress and this has beenreflected in the first quarter's trading. We are continuing to expand our alarm operations in the UK and Belgium. The Group has been developing new improved ranges of extinguishers andsuccessfully launched these products late in 2005. As well as being betterextinguishers in terms of fire ratings, ease of operation and discharge times,we expect to achieve cost efficiencies from implementation of these new ranges. Management and Staff 2005 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 On 5 May 2005 the Company issued a circular to shareholders setting out detailsof the Tender Offer. The offer was to purchase up to 15% of the ordinary sharesin issue for cancellation, at a price of £13.75 per share. Valid tenderspursuant to the Tender Offer were received for 2,155,203 ordinary shares from229 shareholders. These shares were purchased by Brewin Dolphin SecuritiesLimited on 1 July 2005, and subsequently acquired and cancelled by the Companyat the agreed Tender Offer price. In order to effect the Tender Offer the Board obtained approval fromshareholders and confirmation by the High Court to implement a Capital Reductionwhich became effective on 23 June 2005. As a result of the Capital Reductionand the ordinary shares being repurchased for cancellation, the issued sharecapital of the Company is now 12,323,198 Ordinary Shares of 1p each. Dividends A final dividend of 12.0p (2004: Nil) per share is proposed, payable on 21 June2006 to shareholders on the register on 26 May 2006. No interim dividend waspaid in 2005 (2004: special dividend of 42.0p and interim dividend of 3.0p). Consolidated Profit and Loss Account For the year ended 31 December 2005 Year ended Year ended 31 December 31 December 2005 2004 (restated) £'000 £'000Turnover 64,811 52,332 Cost of sales (11,888) (7,901)Gross profit 52,923 44,431 Distribution costs (24,640) (20,740)Administrative expenses (19,189) (14,431)Operating profit 9,094 9,260 EBITDA* 14,258 13,949Depreciation (2,031) (1,903)Amortisation of goodwill (3,133) (2,786)Operating profit 9,094 9,260 Income from fixed asset investments - 114Profit on disposal of fixed asset investments 1,474 -Net interest payable and similar charges (2,062) (418)Other finance costs (366) (74)Profit on ordinary activities before taxation 8,140 8,882 Taxation (3,663) (3,676)Profit attributable to equity shareholders 4,477 5,206 Dividends - (7,956)Retained profit/(sustained loss) 4,477 (2,750) Basic and diluted earnings per ordinary share 33.4p 36.0pDividend per ordinary share - 55.0p *Earnings before Interest, Taxation, Depreciation and Amortisation All of the above results arose from continuing operations. Consolidated Balance Sheet For the year ended 31 December 2005 2005 2004 (restated) £'000 £'000Fixed assetsIntangible assets 46,230 49,684Tangible assets 7,823 8,408Investments - 70 54,053 58,162Current assetsStocks 4,897 4,052Debtors 15,676 14,929Cash at bank and in hand 8,253 7,723 28,826 26,704Creditors: amounts falling due within one yearFinance debt (5,330) (5,489)Other creditors (15,247) (16,854) (20,577) (22,343)Net current assets 8,249 4,361 Total assets less current liabilities 62,302 62,523Creditors: amounts falling due after more than one yearFinance debt (35,958) (9,912)Provisions for liabilities and charges (399) (376) Net assets excluding pension liability 25,945 52,235Pension liability (2,999) (3,717)Net assets including pension liability 22,946 48,518 Capital and reservesCalled up share capital 123 1,447Share premium - 27,476Capital redemption reserve - 117Merger reserve 2,033 2,033Profit and loss account 20,790 17,445Equity shareholders' funds 22,946 48,518 Consolidated Cash Flow Statement For the year ended 31 December 2005 2005 2004 £'000 £'000Net cash inflow from operating activities 10,193 14,134 Return on investments and servicing of finance Interest received 120 218Interest paid (1,326) (505)Dividends received - 114Net cash outflow from return on investments and servicing of finance (1,206) (173) Taxation Corporation tax paid (3,629) (4,710)Capital expenditure Payments to acquire intangible fixed assets (16) (54)Payments to acquire tangible fixed assets (1,821) (2,208)Receipts from sales of tangible fixed assets 292 644Receipt from sale of investment 1,544 -Net cash outflow for capital expenditure (1) (1,618) Acquisitions and disposals Payments to acquire subsidiary undertakings - (8,435)Net cash/(overdraft) acquired with subsidiary undertakings - 412Payment of deferred consideration on prior year acquisitions (516) -Net cash outflow for acquisitions (516) (8,023) Equity dividends paid to shareholders - (7,955) Net cash inflow/(outflow) before use of financing 4,841 (8,345) FinancingPurchase of own shares (104) (120)New long-term loans 30,000 7,146Tender offer (30,007) -Repayment of long-term loans (4,200) (4,444)Net cash (outflow)/inflow from financing (4,311) 2,582 Increase/(decrease) in cash in the year 530 (5,763) CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 2004 2005 (restated) £'000 £'000Profit for the financial year 4,477 5,206Currency translation differences on foreign currency net investments (264) (217)Actuarial gain/(loss) recognised in the pension scheme 469 (1,830)Movement on deferred tax relating to pension asset (143) 549Total recognised gains for the year 4,539 3,708Prior year adjustment (note 22) (2,431)Total losses recognised since last annual report 2,108 1 Earnings per Share The calculation of basic earnings per Ordinary Share ("EPS") is based on theprofit on ordinary activities after taxation of £4,477,000 (2004: £5,206,000 )and on 13,389,966 (2004: 14,469,566) Ordinary Shares, being the weighted averagenumber 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 13,404,033 (2004:14,482,899). 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 13,389,966(2004: 14,469,566) Ordinary Shares being the weighted average number of OrdinaryShares in issue in the year and on adjusted earnings which are calculated asfollows: 2005 2004 (restated) £'000 pence £'000 penceProfit on ordinary activities after taxation 4,477 33.4 5,206 36.0Eliminate effect of:Amortisation of goodwill 3,133 23.4 2,786 19.2Adjusted profit on ordinary activities after taxation 7,610 56.8 7,992 55.2 Adjusted earnings per share figures are given in order that Shareholders mayunderstand the effect 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 2005 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 2004 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 2005 and 31 December 2004 did not contain a statement under s237(2) ors237(3) of the Companies Act 1985. The preceding statement have been prepared in accordance with applicableaccounting standards on a basis which is consistent with that applied inprevious periods. 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