London Security PLC 

(the "Group" or "Company")

Interim results for the six months ended 30 June 2022

Chairman's statement

J.G. Murray, Chairman

Financial highlights

•     Revenue £88.6m (2021: £82.7m)

•     Operating profit £10.9m (2021: £12.3m)

•     Earnings per share 68.3p (2021: 75.6p)

Trading

The financial highlights illustrate that the Group's revenue increased by £5.9 million (7.1%) to £88.6 million.

Operating profit decreased by £1.4 million (11.4%) to £10.9 million.

The period under review 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, energy and wage inflation following the war in Ukraine and the recovery from the coronavirus pandemic. Some of these supply price increases have been passed on to our customers, but we have absorbed an element of these which this has reduced our operating profit. The inflationary spike has had an adverse effect on business confidence which we are starting to experience as a reduced willingness to invest by our customers.

Acquisitions

In the six months to the end of June the Group acquired four companies on the continent. In addition it strengthened its presence in Germany, Austria and the United Kingdom through the acquisition of service contracts to be 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 2022 was £35.3 million. This is a decrease of £0.4 million on the 31 December 2021 balance of £35.7 million.

In May 2018 the Group entered into a 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% SONIA on the Sterling loan and 0.25% EURIBOR on the Euro loan.

Prospects

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 2021 of £0.42 per ordinary share was paid to shareholders on 8 July 2022.

J.G. Murray

Chairman

9 September 2022

Consolidated income statement

for the six months ended 30 June 2022

* 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 2022

Consolidated statement of changes in equity

for the six months ended 30 June 2022

Consolidated statement of financial position

as at 30 June 2022

Consolidated statement of cash flow

for the six months ended 30 June 2022

Notes to the financial statements

for the six months ended 30 June 2022

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 2022 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 2021. 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 2021 have been extracted from the statutory accounts for the year ended 31 December 2021, 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 £8,374,000 (2021: £9,267,000) and on 12,261,477 (2021: 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 2022. In accordance with IAS 19 such a valuation will be prepared for the purposes of the Group's Annual Report and Accounts 2022.

For further information, please contact:

London Security plc

Richard Pollard

Company Secretary                                                                            Tel : 01422 372852

WH Ireland Limited

Chris Fielding                                                                                       Tel : 0207 220 1666