Last checked at 6 May 2010 07:00
LONDON SECURITY PLC
6 MAY 2010
PRELIMINARY RESULTS
FINANCIAL HIGHLIGHTS
Financial highlights of the audited results for the year ended 31 December 2009 compared with the year ended 31 December 2008 are as follows:
·; turnover of £86.0 million (2008: £74.9 million);
·; operating profit before depreciation and amortisation of £23.2 million (2008: £21.6 million); and
·; operating profit of £19.8 million (2008: £18.9 million).
TRADING REVIEW
The financial highlights illustrate that the Group's turnover increased by £11.1 million (14.8%) to £86.0 million and operating profit increased by £0.9 million (4.8%) to £19.8 million.
The Group has continued to support and develop its traditional business roots in servicing fire extinguishers, hose reels and fire alarms and growing our new activities through our multi-service strategy offering. This was achieved through a series of training and employee development programmes, which has resulted in improved customer retention and greater motivation of the workforce. The Group continues its evolution from solely an extinguisher supplier to the customers' safety partner.
In summary 2009 was a difficult year, but with the benefit of acquisitions and a favourable exchange rate we have still recorded creditable results despite the testing economic environment.
ACQUISITIONS
In 2008 the Group acquired the contracts and brand name of Somati FIE N.V. in Belgium. This new business unit has now been integrated into our operations and has contributed fully towards our results in 2009.
In the UK we have continued to acquire further contracts to service fire equipment through smaller acquisitions. No fixed overhead was added as a result of these UK acquisitions.
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.
MANAGEMENT AND STAFF
2009 was a year in which the staff performed well and, on your behalf, I would like to express thanks and appreciation for their contribution.
DIVIDENDS
The Board is not recommending the payment of a final dividend in respect of 2009.
Dividend policy continues to be reviewed regularly by the Board.
FINANCING
In 2008 the Group suffered a charge of £7.7 million as a result of exchange losses on foreign currency loans. In 2009 the Group implemented a net investment hedge against this risk which permits the Group to recognise exchange rate volatility through reserves. Falling interest rates have resulted in lower interest payable and receivable within finance costs.
FUTURE PROSPECTS
2010 will also be a challenging year, 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. Therefore we expect to continue to deliver strong results in the future.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held at 10 Bruton Street, 5th Floor, London W1J 6PX on 9 June 2010 at 11a.m. You will find enclosed a form of proxy for use at that Meeting which you are requested to complete and return in accordance with the instructions on the form. I shall, along with your Directors, look forward to meeting you at that time.
J.G. MURRAY
Chairman
4 May 2010
Consolidated Income StatementFor the year ended 31 December 2009
|
|
| 2009 | 2008 |
|
| Note | £'000 | £'000 |
| Revenue |
| 85,968 | 74,892 |
| Cost of sales |
| (14,507) | (12,618) |
| Gross profit |
| 71,461 | 62,274 |
| Distribution costs |
| (32,520) | (27,051) |
| Administrative expenses |
| (19,177) | (16,346) |
| EBITDA* |
| 23,171 | 21,592 |
| Depreciation and amortisation |
| (3,407) | (2,715) |
| Operating profit |
| 19,764 | 18,877 |
| Finance income |
| 560 | 1,679 |
| Finance costs |
| (2,021) | (3,362) |
| Exchange loss on foreign currency |
| - | (7,654) |
| Finance costs - net |
| (1,461) | (9,337) |
| Profit before income tax |
| 18,303 | 9,540 |
| Income tax expense |
| (3,772) | (3,983) |
| Profit for the year attributable to equity shareholders of the Company |
| 14,531 | 5,557 |
| Earnings per share |
|
|
|
| Basic and diluted | 1 | 118.2p | 45.2p |
| Dividends |
|
|
|
| Dividends paid per share |
| - | 130.0p |
* Earnings before interest, tax, depreciation, amortisation and impairment charges.
Consolidated statement of comprehensive income
for the year ended 31 December 2009
|
|
| 2009 | 2008 |
|
|
| £'000 | £'000 |
| Profit for the financial year |
| 14,531 | 5,557 |
| Other comprehensive income: |
|
|
|
| Currency translation differences on foreign currency net investments net of tax |
| (1,366) | 4,053 |
| Foreign currency loan hedges net of tax |
| 2,552 | - |
| Actuarial loss recognised in pension scheme |
| (397) | (708) |
| Movement on deferred tax relating to pension scheme |
| (177) | (36) |
| Other comprehensive income for the year, net of tax |
| 612 | 3,309 |
| Total comprehensive income for the year |
| 15,143 | 8,866 |
Consolidated Statement of Changes in Equity
For the year ended 31 December 2009
|
|
|
|
| Profit |
|
|
| Share | Merger | Other | and loss |
|
|
| capital | reserve | reserve | account | Total |
|
| £'000 | £'000 | £'000 | £'000 | £'000 |
| At 1 January 2008 | 123 | 2,033 | 1,071 | 34,401 | 37,628 |
| Profit for the financial period | - | - | - | 5,557 | 5,557 |
| Transactions with owners: |
|
|
|
| - |
| Dividends | - | - | - | (15,980) | (15,980) |
| Other comprehensive income: |
|
|
|
|
|
| Exchange adjustments | - | - | 4,053 | - | 4,053 |
| Actuarial loss on pension scheme | - | - | - | (708) | (708) |
| Movement on deferred tax relating to pension asset | - | - | - | (36) | (36) |
| At 1 January 2009 | 123 | 2,033 | 5,124 | 23,234 | 30,514 |
| Profit for the financial period | - | - | - | 14,531 | 14,531 |
| Other comprehensive income: |
|
|
|
|
|
| Exchange adjustments | - | - | (1,366) | - | (1,366) |
| Actuarial loss on pension scheme | - | - | - | (397) | (397) |
| Movement on deferred tax relating to pension asset | - | - | - | (177) | (177) |
| Foreign currency loan hedges net of tax | - | - | 2,552 | - | 2,552 |
| At 31 December 2009 | 123 | 2,033 | 6,310 | 37,191 | 45,657 |
The merger reserve is not a distributable reserve.
The other reserve relates entirely to the effects of changes in foreign currency exchange rates.
Consolidated Statement of Financial Position
As at 31 December 2009
|
|
| 2009 | 2008 |
|
|
| £'000 | £'000 |
| Assets |
|
|
|
| Non-current assets |
|
|
|
| Property, plant and equipment |
| 8,552 | 9,787 |
| Intangible assets |
| 52,427 | 53,210 |
| Deferred tax asset |
| 604 | 743 |
|
|
| 61,583 | 63,740 |
| Current assets |
|
|
|
| Inventories |
| 7,804 | 8,545 |
| Trade and other receivables |
| 17,849 | 20,820 |
| Cash and cash equivalents |
| 19,070 | 10,875 |
|
|
| 44,723 | 40,240 |
| Total assets |
| 106,306 | 103,980 |
| Liabilities |
|
|
|
| Current liabilities |
|
|
|
| Trade and other payables |
| (15,534) | (17,148) |
| Income tax liabilities |
| (902) | (1,548) |
| Borrowings |
| (7,597) | (7,488) |
| Provision for liabilities and charges |
| (18) | - |
|
|
| (24,051) | (26,184) |
| Non-current liabilities |
|
|
|
| Trade and other payables |
| (18) | - |
| Borrowings |
| (35,596) | (46,241) |
| Derivative financial instruments |
| (296) | (212) |
| Deferred tax liabilities |
| (83) | (41) |
| Retirement benefit obligations |
| (605) | (742) |
| Provision for liabilities and charges |
| - | (46) |
|
|
| (36,598) | (47,282) |
| Total liabilities |
| (60,649) | (73,466) |
| Net assets |
| 45,657 | 30,514 |
| Shareholders' equity |
|
|
|
| Ordinary shares |
| 123 | 123 |
| Merger reserve |
| 2,033 | 2,033 |
| Other reserves |
| 6,310 | 5,124 |
| Retained earnings |
| 37,191 | 23,234 |
| Total shareholders' equity |
| 45,657 | 30,514 |
Consolidated Statement of Cash FlowFor the year ended 31 December 2009
|
|
| 2009 | 2008 |
|
|
| £'000 | £'000 |
| Cash flow from operating activities |
|
|
|
| Cash generated from operations |
| 24,355 | 15,552 |
| Interest paid |
| (1,422) | (2,687) |
| Income tax paid |
| (4,386) | (4,826) |
| Net cash generated from operating activities |
| 18,547 | 8,039 |
| Cash flow from investing activities |
|
|
|
| Acquisition of subsidiary undertakings |
| (375) | (222) |
| Purchases of property, plant and equipment |
| (1,777) | (2,923) |
| Proceeds from sale of property, plant and equipment |
| 271 | 426 |
| Purchases of intangible assets |
| (607) | (5,156) |
| Proceeds from sale of intangible assets |
| - | 31 |
| Interest received |
| 120 | 1,188 |
| Net cash used in investing activities |
| (2,368) | (6,656) |
| Cash flows from financing activities |
|
|
|
| Repayments of borrowings |
| (7,984) | (4,535) |
| New long-term loans |
| - | 18,200 |
| Dividends paid to Company's shareholders |
| - | (15,980) |
| Net cash used in financing activities |
| (7,984) | (2,315) |
| Net increase/(decrease) in cash in the year |
| 8,195 | (932) |
| Cash and cash equivalents at beginning of the year |
| 10,875 | 11,807 |
| Cash and cash equivalents at end of the year |
| 19,070 | 10,875 |
1 Earnings per Share
The calculation of basic earnings per ordinary share ("EPS") is based on the profit on ordinary activities after taxation of £14,531,000 (2008: £5,557,000) and on 12,294,798 (2008: 12,294,798) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
For diluted EPS, the weighted average number of shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The only potential ordinary shares in the Group are in respect of the unapproved share option scheme. The revised weighted average number of shares is 12,294,798 (2008: 12,296,487). After taking into account the effect of dilutive securities, the basic EPS and adjusted EPS figures are unaltered.
|
| 2009 |
| 2008 | ||
|
| £'000 | Pence | £'000 | Pence | |
| Profit on ordinary activities after taxation | 14,531 | 118.2 | 5,557 | 45.2 | |
2 This preliminary announcement does not constitute the Company's statutory accounts within the meaning of Section 434 of the Companies Act 2006.
The results for the year ended 31 December 2009 have been extracted from the full accounts of the Group for that year which received an unqualified auditors' report and which have not yet been delivered to the Registrar of Companies. The financial information for the year ended 31 December 2008 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The report of the auditors on those filed accounts was unqualified. The accounts for the year ended 31 December 2009 and 31 December 2008 did not contain a statement under s498 (1) to (4) of the Companies Act 2006 or under s237(1) to (4) of the Companies Act 1985.
This preliminary announcement has been prepared in accordance with International Financial Reporting Standards. The Group will post its annual report and accounts to shareholders on 14 May 2010. A copy of the annual report and accounts can be found on the company's webpage (www.londonsecurity.org).
Enquiries: London Security plc
Richard Pollard
Company Secretary Tel: 01422 372852