Interim results for six months ended 30 June 2019

London Security PLC

(the "Group")

Interim results for six months ended 30 June 2019

Chairman's statement

J.G. Murray, Chairman

Financial highlights

• Revenue £71.7m (2018: £66.7m)

• Operating profit £10.5m (2018: £10.1m)

• Earnings per share 57.9p (2018: 56.2p)

TRADING

The financial highlights illustrate that the Group's revenue increased by £5.0 million (7.5%) to £71.7 million. The movement in exchange rates had an adverse effect of £0.5 million on reported turnover. The underlying revenue increase can largely be attributed to business acquisitions and improvements in the scheduling of service work

Operating profit increased by £0.4 million (4.0%) to £10.5 million. This increase in operating profit is again primarily caused by business acquisitions and improved service scheduling.

ACQUISITIONS

In the six months to the end of June, the Group has acquired a total of ten well established businesses at a cost of £3.0 million (2018: three businesses at a cost of £1.9 million). The integration of these businesses into the Group has, so far, been successful and results are in line with expectations. 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.

FINANCING

In May 2018 the Group entered into a new five year multi-currency facility until 2023 comprising £3.15 million and €8.40 million. To limit our exposure to increasing interest rates these loans are subject to interest rate caps of 1.5% LIBOR on the Sterling loan and 0.25% EURIBOR on the Euro loan.

IFRS 16 "Leases" was applicable from 1 January 2019. The application of the standard has resulted in the recognition of additional right-of-use assets and lease liabilities which have been disclosed separately in the Statement of Financial Position. The standard is discussed further in note 2, Basis of preparation. The impact on the Income Statement was not material.

PROSPECTS

The fire security market is experiencing increased competition and downward pressure on prices. Our strategy is to continue to concentrate on the highest levels of customer service to mitigate this. We do not expect the economic environment to become any easier in 2019. Nonetheless your Group remains in a strong position and will continue to focus on meeting the needs of our customers and our shareholders.

DIVIDENDS

A final dividend in respect of 2018 of £0.40 per ordinary share was paid to shareholders on 5 July 2019.

J.G. Murray

Chairman

12 September 2019

Consolidated income statement

for the six months ended 30 June 2019

* 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 2019

Consolidated statement of changes in equity

for the six months ended 30 June 2019

Consolidated statement of financial position

as at 30 June 2019

Consolidated statement of cash flow

for the six months ended 30 June 2019

Notes to the financial statements

for the six months ended 30 June 2019

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 2019 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 2018. 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 2018 have been extracted from the statutory accounts for the year ended 31 December 2018, 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.

IFRS 16 "Leases" was issued in January 2016 with an effective date of 1 January 2019. The standard specifies how leases are recognised, presented, measured and disclosed. The majority of the Group's lease commitments have been brought onto the balance sheet together with corresponding right of use assets. In the Income Statement, the existing operating lease charge, which is recognised within operating profit, has been replaced by a depreciation charge in respect of the right of use asset. In addition there is an interest cost in relation to the lease liability which is recognised within finance costs.

The Group has applied IFRS 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under IAS 17.

3 Earnings per share

The calculation of basic earnings per ordinary share is based on the profit on ordinary activities after taxation of £7,103,000 (2018: £6,891,000) and on 12,261,477 (2018: 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 2019. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2019.

For further information, please contact:

London Security plc

Richard Pollard

Company Secretary Tel : 01422 372852

WH Ireland Limited

Chris Fielding Tel : 0207 220 1666