Lon.sec Regulatory News (LSC)

LONDON SECURITY plc

FINANCIAL HIGHLIGHTS

Financial highlights of the unaudited results for the six months ended 30 June 2012 compared with the six months ended 30 June 2011 are as follows:

Revenue

£47.6 million

(2011: £47.9 million)

Operating profit

£9.8 million

(2011: £9.9 million)

Profit before income tax

£15.5million

(2011: £9.7 million)

TRADING AND PROSPECTS

The financial highlights illustrate that the Group's revenue decreased by £0.3 million (0.6%) to £47.6 million and operating profit decreased by £0.1 million (1%) to £9.8 million. The movement in the Sterling to Euro average exchange rate (1.14 to 1.21) has decreased like for like revenue by £2.3 million and operating profit by £0.5 million. These results reflect a consolidation of the strong growth experienced in 2011 in our core market, entry into fixed suppression systems and greater investment in customer retention. The profit before income tax of £15.5 million includes £5.9 million which is discussed further below. Adjusting for this item profit before income tax would be £9.6 million, a decrease of £0.1 million on 2011.

During the period under review the Group sold part of its Elland, West Yorkshire site. The sale realised £7.2 million and the profit on sale was £5.9 million. A new factory and office building at Elland is under construction and is expected to be operational later this year. The cost of this building and associated new equipment is expected to be £3.4 million.

The Group's borrowings are due for repayment by June 2013 and are therefore disclosed as current liabilities. Negotiations are taking place with several interested financial institutions with the purpose of refinancing these borrowings. Your Directors are confident of successfully concluding these negotiations early in 2013.

In the six months to the end of June the Group has acquired a total of eight small well established businesses in the UK, the Netherlands and Austria at a cost of £1.2 million (2011: ten businesses at a cost of £2.0 million). In July three further acquisitions were made at a cost of £1.7 million in the Netherlands and Luxembourg. The integration of these businesses into the Group has, so far, been successful and results are in line with expectations. 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.

Trading prospects for the second half of 2012 will continue to be challenging 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. In 2011 the Group benefitted from certain legislative changes which will not be repeated in 2012. Despite this, and the depreciation of the Euro against the reporting currency of Sterling, the Group is likely to report a similar level of operating profit in 2012.

DIVIDENDS

An interim dividend in respect of 2012 of £0.25 per ordinary share was paid to shareholders on 22 June 2012.

J.G. MURRAY

Chairman

28 September 2012

* Earnings before interest, taxation, depreciation, amortisation and impairment charges.

The above are all as a result of continuing operations.

1 Nature of information

The financial information contained in this Interim Statement has been neither audited nor reviewed by the auditor and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial information for the six months ended 30 June 2012 is unaudited and has been prepared on the basis of the recognition and measurement requirements of adopted International Financial Reporting Standards ("IFRS") as at 30 June 2012 that are effective as at 31 December 2011 and the accounting policies set out in the Group's Annual Report and Accounts 2011. Comparative figures for the year ended 31 December 2011 have been extracted from the statutory accounts for the year ended 31 December 2011 which have been delivered to the Registrar of Companies. The Independent Auditor's Report on those accounts was unqualified and did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.

2 Basis of preparation

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

3 Profit on the disposal of fixed assets

In January 2012, one of the Group's subsidiaries sold part of its site. The sale realised £7.2 million and the profit on the sale was £5.9 million.

4 Earnings per share

The calculation of basic earnings per ordinary share is based on the profit on ordinary activities after taxation of £12,341,000 (2011: £6,604,000) and on 12,261,496 (2011: 12,268,014) ordinary shares, being the weighted average number of ordinary shares in issue during the period.

For diluted earnings per ordinary share, the weighted average number of shares in issue is adjusted to assume conversion of all potentially dilutive 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.

5 Actuarial valuation of the pension scheme

As permitted under IAS 19 the Group has not prepared an actuarial valuation of the pension scheme assets and liabilities for the Interim Statement 2012. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2012.

For further information, please contact:

London Security plc

Richard Pollard

Company Secretary Tel : 01422 372852

WH Ireland Limited

Andrew Kitchingman Tel : 0113 394 6619

Nick Field Tel : 0207 220 1658