Lon.sec Regulatory News (LSC)

26 Sep 2008 10:32



LONDON SECURITY PLC

Interim Statement FOR THE SIX MONTHS ENDED 30 JUNE 2008

CHAIRMAN'S STATEMENT

Financial highlights 

Financial highlights of the unaudited results for the six months ended 30 June 2008 compared with the first half of 2007 are as follows: 

Revenue of £35.6 million (2007: £32.8 million)

Operating profit of £8.8 million (2007: £8.1 million)

Profit on ordinary activities before taxation of £6.4 million (2007: £7.3 million)

Earnings per share of 35.9p (2007: 41.0p)

Trading and prospects

The Group's revenue has increased by £2.8 million (8.5%). This improvement is due to the full year effect of various initiatives implemented in 2007 and a favourable exchange rate. There is also an adverse effect following the sale of the Swiss businesses, as results from these companies were included in the 2007 accounts.

For the same reasons, the Group's operating profit has increased by £0.7 million (8.6%). 

Within finance costs the Group has suffered an additional charge of £1.8 million (2007: charge of £0.1 million) in respect of the exchange rate movement on its loans denominated in Euros. This is offset by a positive effect of using income streams from Europe to repay the Group's Euro borrowings. 

In mainland Europe, the Group has grown through our multi-service strategy, offering customers a complete range of services. This strategy has enabled the Group's evolution from solely an extinguisher supplier to our customers' safety partner.

In the UK, there has been strong positive customer response to new contracts and sales initiatives. Investment in training our field service team and a changed payment package continues to maintain market penetration. 

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.

I am pleased to inform you that, in August 2008, we purchased the fire extinguisher division of Somati in Belgium. This business, now incorporated as Somati FIE NV, has revenue of 8.5 million Euros (£6.5 million) and will contribute positively to the Group in the second half of 2008.

Dividends and financing

A first interim dividend in respect of 2008 of £0.57 per ordinary share was paid to shareholders on 25 April 2008. A second interim dividend of £0.73 per ordinary share was paid on 22 May 2008. Dividends paid totalled £16 million.

In order to pay the interim dividends referred to above the Group has arranged an additional £15 million of bank loans with Lloyds Bank plc.

J.G. Murray

Chairman

26 September 2008

CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS TO 30 JUNE 2008

CONSOLIDATED BALANCE SHEET

AS AT 30 JUNE 2008

CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS TO 30 JUNE 2008

NOTES

1 NATURE OF Information

The financial information contained in this interim statement has been neither audited or reviewed by the auditors and does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The financial information for the six months ended 30 June 2008 is unaudited and has been prepared on the basis of the accounting policies set out in the Group's 2007 Report and Accounts. Comparative figures for the year ended 31 December 2007 have been extracted from the statutory accounts for the year ended 31 December 2007 which have been delivered to the Registrar of Companies. The report of the auditors on those accounts 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 on ordinary activities after taxation of £4,410,000 (2007: £5,054,000) and on 12,294,798 (2007: 12,294,798) 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. The revised weighted average number of shares is 12,294,798 (2007: 12,294,798). After taking into account the effect of dilutive securities, the basic EPS and adjusted EPS figures are unaltered.

3  Actuarial valuation of pension scheme

In common with many other companies, the Group has not prepared an actuarial valuation of pension scheme assets and liabilities for the 2008 interim statement. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's 2008 Report and Accounts.

4  Consolidated statement of changes in equity