Lon.sec Regulatory News (LSC)

29 Sep 2006 07:01

London Security PLC29 September 2006 London Security plc INTERIM STATEMENTFor the six months ended 30 June 2006 Chairman's Statement Financial highlights Financial highlights of the unaudited results for the six months ended 30 June2006 compared with the first half of 2005 are as follows: • Turnover of £33.4 million (2005: £34.0 million) • Earnings before interest, taxation, depreciation and amortisation ("EBITDA") of £7.7 million (2005: £7.6 million) • Operating profit of £5.1 million (2005: £5.1 million) • Profit on ordinary activities before taxation of £4.1 million (2005: £4.7 million) • Earnings per share of 18.3p (2005: 18.0p) Trading and prospects The financial highlights above illustrate that 2006 has been a period ofconsolidation for the Group. Each of our subsidiaries produced profits broadlyin line with the prior year. This, however, hides work done in the period oncost control and commercial performance which give reason for optimism for thefuture. Increased profits are expected in the second half compared with 2005, inparticular from our Belgian and UK operations. The alarm divisions of MK Fire and TVF have made significant progress towardsthe end of this period and this has continued with improved results in July andAugust. Improved results have been reported in our Swiss operations in part due to loweroffice costs. Interest payable and similar charges have risen significantly as new borrowingsto finance the Tender Offer were drawn down in July 2005, hence this period hassuffered a full interest charge. It remains a principal aim of the Group to grow through acquisition.Acquisitions are being sought throughout Europe and the Group will invest at theupper end of the price spectrum where an adequate return is envisaged. In this period, management and staff have continued to perform well and I wouldlike to express thanks and appreciation for their contribution. J.G. MurrayChairman29 September 2006 Consolidated Profit and Loss Accountfor the six months to 30 June 2006 Unaudited Unaudited Audited six months six months year to to 30 June to 30 June 31 December 2006 2005 2005 £'000 £'000 £'000------------------------- ---------- ---------- ---------Turnover 33,398 33,981 64,811Cost of sales (6,197) (6,686) (11,888)------------------------- ---------- ---------- ---------Gross profit 27,201 27,295 52,923Distribution costs (12,779) (13,286) (24,640)Administrative expenses (9,347) (8,889) (19,189)------------------------- ---------- ---------- ---------Operating profit 5,075 5,120 9,094------------------------- ---------- ---------- ---------EBITDA* 7,675 7,645 14,258Depreciation (1,034) (1,006) (2,031)Amortisation of goodwill (1,566) (1,519) (3,133)------------------------- ---------- ---------- ---------Operating profit 5,075 5,120 9,094------------------------- ---------- ---------- ---------Profit on disposal of fixed assetinvestments - - 1,474Net interest payable and similarcharges (915) (330) (2,062)Other finance costs (49) (92) (366)------------------------- ---------- ---------- ---------Profit on ordinary activities beforetaxation 4,111 4,698 8,140Taxation (Note3) (1,859) (2,094) (3,663)------------------------- ---------- ---------- ---------Profit on ordinary activities aftertaxation 2,252 2,604 4,477Dividends (1,476) - -------------------------- ---------- ---------- ---------Retained profit 776 2,604 4,477------------------------- ---------- ---------- ---------Basic and diluted earnings perordinary share (Note 2) 18.3p 18.0p 33.4p------------------------- ---------- ---------- ---------All of the above results arose from continuing operations.* Earnings before interest, taxation, depreciation and amortisation. Consolidated Balance Sheetas at 30 June 2006 Unaudited Unaudited Audited as at as at as at 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000---------------------- --------- ----------- ----------Fixed assetsIntangible assets 44,710 47,850 46,230Tangible assets 7,676 8,193 7,823Investments - 70 ----------------------- --------- ----------- ---------- 52,386 56,113 54,053---------------------- --------- ----------- ----------Current assetsStocks 5,328 4,428 4,897Debtors 16,268 16,636 15,676Cash at bank and in hand 6,658 6,937 8,253---------------------- --------- ----------- ---------- 28,254 28,001 28,826---------------------- --------- ----------- ----------Creditors: due within one yearFinance debt (5,204) (2,819) (5,330)Other creditors (14,742) (16,392) (15,247)---------------------- --------- ----------- ---------- (19,946) (19,211) (20,577)---------------------- --------- ----------- ----------Net current assets 8,308 8,790 8,249---------------------- --------- ----------- ----------Total assets less current liabilities 60,694 64,903 62,302---------------------- --------- ----------- ----------Creditors: due after more than one yearFinance debt (33,478) (10,334) (35,958)Provisions for liabilities and charges (346) (315) (399)---------------------- --------- ----------- ----------Net assets excluding net pension liability 26,870 54,254 25,945Net pension liability (3,065) (3,797) (2,999)---------------------- --------- ----------- ----------Net assets including net pension liability 23,805 50,457 22,946---------------------- --------- ----------- ----------Capital and reservesCalled up share capital 123 123 123Merger reserve 2,033 2,033 2,033Profit and loss account 21,649 48,301 20,790---------------------- --------- ----------- ----------Total equity shareholders' funds 23,805 50,457 22,946---------------------- --------- ----------- ---------- Consolidated Cash Flow Statementfor the six months to 30 June 2006 Unaudited Unaudited Audited six months six months year ended to 30 June to 30 June 31 December 2006 2005 2005 £'000 £'000 £'000----------------------- --------- ----------- ---------Net cash inflow from operatingactivities 6425 6,010 10,193----------------------- --------- ----------- ---------Return on investments and servicing offinanceInterest received 64 59 120Interest paid (962) (392) (1,326)----------------------- --------- ----------- ---------Net cash outflow from return oninvestments (898) (333) (1,206)and servicing of finance----------------------- --------- ----------- ---------TaxationCorporation tax paid (2214) (3,262) (3,629)----------------------- --------- ----------- ---------Capital expenditurePayments to acquire intangible fixedassets (46) - (16)Payments to acquire tangible fixedassets (967) (1,099) (1,821)Receipts from sales of tangible fixedassets 187 199 292Receipt from sale of investment - - 1544----------------------- --------- ----------- ---------Net cash outflow for capitalexpenditure (826) (900) (1)----------------------- --------- ----------- ---------Net cash outflow for acquisitions - - (516)----------------------- --------- ----------- ---------Equity dividends paid to shareholders (1476) - ------------------------ --------- ----------- ---------Net cash inflow/(outflow) beforefinancing 1,011 1,515 (4,841)----------------------- --------- ----------- ---------FinancingPurchase of own shares - (104) (104)New long-term loans - - 30,000Tender offer - - (30,007)Repayment of long-term loans (2,606) (2,197) (4,200)----------------------- --------- ----------- ---------Net cash outflow from financing (2,606) (2,301) (4,311)----------------------- --------- ----------- ---------(Decrease)/increase in cash in theperiod (1,595) (786) 530----------------------- --------- ----------- --------- 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 2006 2005 2005 £'000 £'000 £'000------------------------ --------- --------- ----------Profit for the financial period 2,252 2,604 4,477Currency translation differences onforeign currency net investments 83 (518) (264)Actuarial (loss)/gain recognised inpension - (62) 469Movement on deferred tax relating topension scheme - 19 (143)------------------------ --------- --------- ----------Total recognised gains and lossesrelating to the period 2,335 2,043 4,539 ------------------------ --------- --------- ---------- Reconciliation of Movement in Group Shareholders' Funds Unaudited Unaudited Audited 6 months to 6 months to year ended 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000------------------------- --------- --------- ---------Profit for the financial period 2,252 2,604 4,477Dividends (1,476) - -Consideration for the purchase of own shares - (104) (104)Currency translation differences onforeign currency net investments 83 (518) (264)Actuarial (loss)/gain recognised inpension scheme (note 4) - (62) 469Movement on deferred tax relating topension scheme 19 (143)Tender Offer - - (30,007)------------------------- --------- --------- ---------Net increase/(decrease) inshareholders' funds 859 1,939 (25,572)Shareholders' funds at the beginningof the period 22,946 48,518 48,518------------------------- --------- --------- ---------Shareholders' funds at the end of theperiod 23,805 50,457 22,946------------------------- --------- --------- --------- Notes 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 2006 isunaudited and has been prepared on the basis of the accounting policies set outin the Group's 2005 Report and Accounts. Comparative figures for the year ended31 December 2005 have been extracted from the statutory accounts for the yearended 31 December 2005 which have been delivered to the Registrar of Companies.The report of the auditors on those accounts was unqualified and did not containa 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 taxation of £2,252,000 (2005: £2,604,000) and on12,323,198 (2005: 14,459,001) ordinary shares, being the weighted average numberof ordinary shares in issue during the period. For diluted earnings per ordinary share, the weighted average number of sharesin issue is adjusted to assume conversion of all potentially dilutive ordinaryshares. The revised weighted average number of shares is 12,323,198 (2005:14,473,038). 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 2006 2005 2005 £'000 £'000 £'000--------------------------- -------- ---------- ---------Profit on ordinary activities aftertaxation 2,252 2,604 4,477Eliminate effect of:Amortisation of goodwill 1,566 1,519 3,133--------------------------- -------- ---------- ---------Adjusted earnings 3,818 4,123 7,610--------------------------- -------- ---------- ---------Adjusted earnings per ordinary share 31.0p 28.5p 56.8pBasic earnings per ordinary share 18.3p 18.0p 33.4p--------------------------- -------- ---------- --------- 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. Actuarial gain/(loss) recognised in pension scheme In common with many other companies, the Group has not prepared an actuarialvaluation of pension scheme assets and liabilities for the 2006 interimstatement. In accordance with FRS17 such a valuation will be prepared for thepurposes of the Group's 2006 Report and Accounts. This information is provided by RNS The company news service from the London Stock Exchange