Lon.sec Regulatory News (LSC)

30 Sep 2005 16:25

London Security PLC30 September 2005 London Security plc30 September 2005 INTERIM STATEMENTFor the six months ended 30 June 2005 Financial highlights of the unaudited results for the six months ended 30 June2005 compared with the first half of 2004 are as follows: • Turnover at £34.0 million has increased by 28.4% compared to the first half of 2004 • Earnings before interest, taxation, depreciation and amortisation ("EBITDA") increased from £6.8 million to £7.6 million • Operating profit increased from £4.4 million to £5.1 million • Profit on ordinary activities before taxation increased from £4.4 million to £4.7 million Review Unaudited Audited Six months to 30 June Full Year 2005 2004 2004 £million (as restated) (as restated) £million £millionTurnover 34.0 26.5 52.3EBITDA 7.6 6.8 14.0Operating profit 5.1 4.4 9.3Profit on ordinary activities before taxation 4.7 4.4 8.9 Trading and prospects The results for the six months to June 2005 have been positively impacted by theacquisition of MK Fire and TVF. These additions to the Group contributed£6.9million to the turnover and £0.2million to Operating Profit after chargingamortisation of goodwill of £0.2million in this period. I can report that theintegration of these businesses into the Group both operationally andfinancially is ongoing and significant progress is being made. The existing businesses have performed consistently with turnover increased by£0.6million and Operating Profit by £0.5million. The Board of Directors are optimistic about future prospects for the Group.Further improvements are expected from MK Fire and TVF. Other initiatives arecontinually being reviewed to improve the Group's operations. These include newimproved fire extinguishers which are more efficient in extinguishing fires andbring cost savings. Improved logistics management is another area we believewill contribute to the Group's efficiency. In this period, management and staff have continued to perform well and 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 ordinaryshares in issue for cancellation, at a price of 1,375 pence per share. Validtenders pursuant to the Tender Offer were received for 2,155,203 ordinary sharesfrom 229 shareholders. These shares were purchased by Brewin Dolphin on 1 July2005, and subsequently acquired by the Company for cancellation, at the agreedtender offer price. The effect of this transaction on the profit and lossaccount in the balance sheet will be a reduction of £30.0 million and will bereflected in the accounts to 31 December 2005. In order to effect the Tender Offer the Board obtained approval fromshareholders and confirmation by the High Court to implement a Capital Reductionon 21 June 2005. As a result of the Capital Reduction and the ordinary sharesbeing repurchased for cancellation, the issued share capital of the Company isnow 12,323,198 Ordinary Shares of 1p each. Dividends In view of the recent tender offer, no interim dividend is proposed (2004:Special dividend of 42.0p and Interim dividend of 3.0p). J.G. Murray Chairman 30 September 2005 Unaudited Unaudited Audited six months six months year ended to 30 June to 30 June 31 December 2005 2004 2004 £'000 (as restated**) (as restated**) £'000 £'000 Turnover 33,981 26,456 52,332 Cost of sales (6,686) (4,049) (7,901)Gross profit 27,295 22,407 44,431 Distribution costs (13,286) (10,758) (20,740)Administrative expenses (8,889) (7,205) (14,385)Operating profit 5,120 4,444 9,306 EBITDA* 7,645 6,797 13,995 Depreciation (1,006) (958) (1,903)Amortisation of goodwill (1,519) (1,395) (2,786)Operating profit 5,120 4,444 9,306 Income from fixed asset investments - 112 114Net interest payable and similar charges (422) (171) (492)Profit on ordinary activities before taxation 4,698 4,385 8,928 Taxation (Note 3) (2,094) (1,992) (3,730)Profit on ordinary activities after taxation 2,604 2,393 5,198 Dividends - (1,447) (7,955)Retained profit/(sustained loss) 2,604 946 (2,757) Basic and diluted earnings per ordinary share (Note 2) 18.0p 16.6p 35.9p All of the above results arose from continuing operations. * Earnings before interest, taxation, depreciation and amortisation *\* The comparative figures for the six months to 30 June 2004 and the year ended31 December 2004 have been restated due to both the full adoption of FRS17 -Retirement Benefits and FRS 21 - Events after the Balance Sheet Date, which cameinto effect from 1 January 2005. Unaudited Unaudited Audited as at as at as at 30 June 30 June 31 December 2005 2004 2004 (as restated*) (as restated*) £'000 £'000 £'000Fixed assets Intangible assets 47,850 43,598 49,684Tangible assets 8,193 7,578 8,408Investments 70 70 70 56,113 51,246 58,162Current assets Stocks 4,428 3,574 4,052Debtors 16,636 12,342 14,929Cash at bank and in hand 6,937 11,586 7,723 28,001 27,502 26,704 Creditors: due within one yearFinance debt (2,819) (4,032) (5,489)Other creditors (16,392) (12,709) (16,854) (19,211) (16,741) (22,343)Net current assets 8,790 10,761 4,361 Total assets less current liabilities 64,903 62,007 62,523 Creditors: due after more than one yearFinance debt (10,334) (6,057) (9,912)Provisions for liabilities and charges (315) (537) (376)Net assets excluding net pension liability 54,254 55,413 52,235Net pension liability (3,672) (3,051) (3,592)Net assets including net pension liability 50,582 52,362 48,643 Capital and reserves Called up share capital 123 1,447 1,447Share premium - 27,476 27,476Capital redemption reserve - 117 117Merger reserve 2,033 2,033 2,033Profit and loss account 48,426 21,289 17,570Total equity shareholders' funds 50,582 52,362 48,643 \* The comparative figures for the six months to 30 June 2004 and the year ended31 December 2004 have been restated due to both the full adoption of FRS17 -Retirement Benefits and FRS 21 - Events after the Balance Sheet Date, which cameinto effect from 1 January 2005. Consolidated cash flow statement Unaudited Unaudited Audited six months six months year ended to 30 June to 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 Net cash inflow from operating activities 6,010 4,573 14,884 Return on investments and servicing of financeInterest received 59 112 218Interest paid (392) (272) (505)Dividends received - 112 114Net cash outflow from return on investments (333) (48) (173) and servicing of financeTaxation Corporation tax paid (3,262) (1,913) (4,710)Capital expenditure Payments to acquire intangible fixed assets - - (54)Payments to acquire tangible fixed assets (1,099) (1,147) (2,208)Receipts from sales of tangible fixed assets 199 165 644Net cash outflow for capital expenditure (900) (982) (1,618) Acquisitions and disposals Payments to acquire subsidiary undertakings - - (9,185)Payment of deferred consideration on prior year acquisitions - - -Cash acquired with subsidiary undertakings - - 412Net cash outflow for acquisitions - - (8,773) Equity dividends paid to shareholders - (1,447) (7,955) Net cash inflow before use of liquid resources and financing 1,515 183 (8,345)FinancingPurchase of own shares (104) (121) (120)New long-term loans - - 7,146Repayment of long-term loans (2,197) (1,962) (4,444)Net cash (outflow)/inflow from financing (2,301) (2,083) 2,582 Decrease in cash in the period (786) (1,900) (5,763) Consolidated statement of total recognised gains and losses Unaudited Unaudited Audited 6 months to 6 months to year ended 30 June 30 June 31 December 2005 2004 2004 (as restated*) (as restated*) £'000 £'000 £'000 Profit for the financial period 2,604 2,393 5,198 Currency translation differences on foreign currency net investments (518) (686) (217)Actual return less expected return on pension scheme assets 328 (67) 287Experienced gains and losses arising on the pension scheme liabilities - (1,215) (726)Changes in assumptions underlying the present value of the scheme (390) 147 (1,391)liabilitiesUK deferred tax attributable to the pension scheme asset and liability 19 339 549adjustments Total recognised gains and losses relating to the period 2,043 911 3,700 FRS 17 prior year adjustment (see note 4) (2,306) Total recognised gains and losses since the 2004 annual report and (263)financial statements Reconciliation of movement in Group shareholders' funds Unaudited Unaudited Audited 6 months to 6 months to year ended 30 June 30 June 31 December 2005 2004 2004 (as restated*) (as restated*) £'000 £'000 £'000 Profit for the financial period 2,604 2,393 5,198 Dividends - (1,447) (7,955)Consideration for the purchase of own shares (104) (120) (120)Currency translation differences on foreign currency net investments (518) (686) (217)Actual return less expected return on pension scheme assets 328 (67) 287Experienced gains and losses arising on the pension scheme liabilities - (1,215) (726)Changes in assumptions underlying the present value of the scheme (390) 147 (1,391)liabilitiesUK deferred tax attributable to the pension scheme asset and liability 19 339 549adjustments Net increase/(decrease) in shareholders' funds 1,939 (656) (4,375) Shareholders' funds at the beginning of the period (as restated, see note 48,643 53,018 53,0184) Shareholders' funds at the end of the period 50,582 52,362 48,643 \* The comparative figures for the six months to 30 June 2004 and the year ended31 December 2004 have been restated due to both the full adoption of FRS17 -Retirement Benefits and FRS 21 - Events after the Balance Sheet Date, witheffect from 1 January 2005. 1. Nature of information The financial information contained in this unaudited interim statement does notconstitute statutory accounts within the meaning of section 240 of the CompaniesAct 1985. The financial information for the six months ended 30 June 2005 isunaudited and has been prepared on the basis of the accounting policies set outin the Group's 2004 Report and Accounts with the exception of the adoption ofFRS 17 - Retirement Benefits and FRS 21 - Events after the Balance Sheet Date.Comparative figures for the year ended 31 December 2004 have been extracted fromthe statutory accounts for the year ended 31 December 2004 which have beendelivered to the Registrar of Companies. The report of the auditors on thoseaccounts was unqualified and did not contain a statement under sections 237(2)or 237(3) of the Companies Act 1985. 2. Earnings per share The calculation of basic earnings per ordinary share is based on the profit onordinary activities after taxationof £2,604,000 (2004: £2,393,000) and on 14,459,001 (2004: 14,473,316) ordinaryshares, being the weighted average number of ordinary shares in issue during theperiod. 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 14,473,038 (2004:14,485,933). 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 the aboveweighted average and on adjusted earnings which comprise: Unaudited Unaudited Audited Six months Six months Year ended to 30 June to 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 Profit on ordinary activities after taxation 2,604 2,393 5,198Eliminate effect of:Amortisation of goodwill 1,519 1,395 2,786Adjusted earnings 4,123 3,788 7,984Adjusted earnings per ordinary share 28.6p 26.2p 55.1pBasic earnings per ordinary share 18.0p 16.6p 35.9p 3. Taxation The taxation charge for the period (45%) appears high due principally to thenon-deductibility for taxation purposes of the amortisation of goodwill. 4. Prior year adjustments The total of the prior year adjustments arising from the application of FRS 17 -Retirement Benefits and FRS 21 - Events after the Balance Sheet Date areanalysed as follows: The opening shareholders' funds at 31 December 2003 were restated as follows: Shareholders' funds £'000 £'000 Shareholders' funds at 31 December 2003 as previously stated 52,404Adoption of FRS 17 at 31 December 2003Release of pension provision under SSAP 24 1,355Full provision required under FRS 17, net of deferred tax (2,188)Liability for 2003 final dividend not declared at 31 December 2003 1,447 Total prior period adjustments 614Shareholders' funds at 31 December 2003 as restated 53,018 The closing shareholders' funds at 31 December 2004 were restated as follows: Shareholders' funds £'000 £'000 Shareholders' funds at 31 December 2004 as previously stated 50,949Adoption of FRS 17 at 31 December 2004Release of pension provision under SSAP 24 1,286Full provision required under FRS 17, net of deferred tax (3,592) Total prior period adjustments (2,306)Shareholders' funds at 31 December 2004 as restated 48,643 5. Share capital and reserves Share Capital Share premium redemption Merger Profit and capital account reserve reserve loss account £'000 £'000 £'000 £'000 £'000 At 31 December 2004 1,447 27,476 117 2,033 19,876Prior period adjustment (see note 4) - - - - (2,306)At 31 December 2004 (restated) 1,447 27,476 117 2,033 17,570Retained profit for the period - - - - 2,604Exchange adjustments - - - - (518)Actual return less expected return on pension 328scheme assetsExperienced gains and losses arising on the -pension scheme liabilitiesChanges in assumptions underlying the present (390)value of the scheme liabilitiesUK deferred tax attributable to the pension 19scheme asset and liability adjustmentsPurchase of own shares - - - - (104)Capital reduction (1,324) (27,476) (117) - 28,917At 30 June 2005 123 - - 2,033 48,426 This information is provided by RNS The company news service from the London Stock Exchange