Lon.sec Regulatory News (LSC)

London Security PLC

(the "Group" or "Company")

Interim results for the six months ended 30 June 2023

Chairman's statement

J.J. Murray, Chairman

Financial Highlights

• Revenue £108.8m (2022: £88.6m)

• Operating profit £13.7m (2022: £10.9m)

• Earnings per share 81.0p (2022: 68.3p)

Trading

The financial highlights illustrate that the Group's revenue increased by £20.2 million (22.8%) to £108.8 million.

Operating profit increased by £2.8 million (25.7%) to £13.7 million. This increase is partly attributed to the Group being able to recruit more direct staff. This enabled us to address delayed inspections in the period, in turn delivering a non-recurring benefit to the business' revenue and profit.

These results reflect the favourable movement in the Euro to Sterling average exchange rate, which has decreased from 1.19 to 1.14. If the 2023 results from the European subsidiaries had been translated at 2022 rates, revenue would have been £105.2 million instead of £108.8 million, which would have represented an increase of 18.7% on the prior year. On the same basis, operating profit would have been £13.1 million instead of £13.7 million, an increase of 20.2% compared to 2022.

The period under review also reflects the impact from upward input price pressures in all of the countries in which we operate. These increases are being driven by worldwide supply chain disruption and energy and wage inflation following the recovery from the coronavirus pandemic and the war in Ukraine. These supply price increases have been passed on to our customers where possible.

Acquisitions

In the six months to the end of June, at an aggregate cost of £2.5 million, the Group acquired two companies in Belgium, and it strengthened its presence in Germany and the United Kingdom through the acquisition of service contracts which have been integrated into the Group's existing subsidiaries.

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.

Cash and financing

The Group's cash balance as at 30 June 2023 was £33.2 million. This is a decrease of £0.8 million on the 31 December 2022 balance of £34.0 million.

Prospects

Cash management is a key consideration in difficult economic times. The London Security Group has a healthy balance sheet, strong cash reserves and a track record for good cash generation. The Board therefore considers that with its strong balance sheet and material net cash position the Group is well placed to cope with any economic downturn.

Dividends

A final dividend in respect of 2022 of £0.42 per ordinary share was paid to shareholders on 7 July 2023.

J.J. Murray

Chairman

22 September 2023

Consolidated income statement

for the six months ended 30 June 2023

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

The above are all as a result of continuing operations.

Consolidated statement of comprehensive income

for the six months ended 30 June 2023

Consolidated statement of changes in equity

for the six months ended 30 June 2023

Consolidated statement of financial position

as at 30 June 2023

Consolidated statement of cash flow

for the six months ended 30 June 2023

Notes to the financial statements

for the six months ended 30 June 2023

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 2023 has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 December 2022. The principal risks and uncertainties as disclosed in the year end accounts are considered to be consistent with those that are still applicable now.

Comparative figures for the year ended 31 December 2022 have been extracted from the statutory accounts for the year ended 31 December 2022, 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 or 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 and income and expense. Actual results may differ from these estimates.

3 Earnings per share

The calculation of basic earnings per ordinary share is based on the profit on ordinary activities after taxation of £9,935,000 (2022: £8,374,000) and on 12,260,684 (2022: 12,261,477) 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.

4 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 2023. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2023.

The person responsible for arranging the release of this announcement on behalf of the Company is Richard Pollard, Company Secretary of London Security plc.

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

For further information, please contact:

London Security plc

Richard Pollard

Company Secretary Tel : 01422 372852

WH Ireland Limited

Chris Fielding Tel : 0207 220 1666