19/05/2023

London Security plc

THIS  ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH IS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Final Results for the Year Ended 31 December 2022

Chairman's statement

 J.G. Murray, Chairman

Financial highlights

Financial highlights of the audited results for the year ended 31 December 2022 compared with the year ended 31 December 2021 are as follows:

•     revenue of £188.9 million (2021: £166.6 million);

•     operating profit of £27.2 million (2021: £27.2 million);

•     profit for the year of £20.2 million (2021: £20.0 million);

•     cash of £34.0 million (2021: £35.7 million);

•     earnings per share for the year of £1.65 (2021: £1.62); and

•     a dividend per share of £0.84 (2021: £0.80).

Trading review

The financial highlights illustrate that the Group's revenue increased by £22.3 million (13.4%) to £188.9 million and operating profit remained at £27.2 million. These results reflect:

•     the effect of input inflation which our companies initially absorbed, but as it became clear that it was a longer term trend we passed on appropriate price increases to our customers;

•     the positive impact of acquisitions in 2022 and the full year's trading of acquisitions in 2021;

•     improved performance from our service business in continental Europe;

•     continued improvement from newer service offerings (e.g. emergency lights and passive fire protection); and

•     the movement in the Euro to Sterling average exchange rate, which had an adverse effect of £1.3 million on reported revenue and £0.2 million on operating profit.

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 prices where an adequate return is envisaged by the Board. In the year under review the Group acquired seven security businesses and has grown its presence in Austria, the United Kingdom, Belgium, Germany and Luxembourg. The Group has also continued with the acquisition of service contracts from smaller well-established businesses for integration into the Group's existing subsidiaries.

Management and staff

2022 was a year in which the staff performed well and, on behalf of the shareholders, I would like to express thanks and appreciation for their contribution. The Group recognises that we can only achieve our aims with talented and dedicated colleagues who provide outstanding customer service in every area of the business.

Dividends

A final dividend in respect of 2021 of £0.42 per ordinary share was paid to shareholders on 8 July 2022. An interim dividend in respect of 2022 of £0.42 per ordinary share was paid to shareholders on 28 November 2022. The Board is recommending the payment of a final dividend in respect of 2022 of £0.42 per ordinary share to be paid on 7 July 2023 to shareholders on the register on 9 June 2023. The shares will be marked ex-dividend on 8 June 2023.

Covid-19 impact assessment

In 2022 there was largely a return to normality in our business. The high level of business failures predicted by some commentators did not occur.

Future prospects

The markets in which we operate are entering what is likely to be a period of low growth with continued high inflation. The London Security Group however has a healthy balance sheet, strong cash reserves and a track record for good cash generation. The Board therefore considers that the Group is well placed to weather any downturn. We will also continue to invest in our future and the Group plans to continue to grow through acquisitions.

Annual General Meeting

The Annual General Meeting ("AGM") will be held at 2 Jubilee Way, Elland, West Yorkshire HX5 9DY, on 29 June 2023 at 11.30 am. The Company confirms that shareholders are able to attend in person should they wish to do so. However, we strongly encourage shareholders to vote on all resolutions by completing the enclosed form of proxy for use at that Meeting, which you are requested to return in accordance with the instructions on the form.

J.G. Murray

Chairman

19 May 2023

Consolidated income statement

 for the year ended 31 December 2022

*     Earnings before interest, tax, depreciation and amortisation.

The above results are all as a result of continuing operations.

Consolidated statement of comprehensive income

 for the year ended 31 December 2022

Consolidated statement of changes in equity

 for the year ended 31 December 2022

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 2022

Consolidated statement of cash flows

 for the year ended 31 December 2022

Notes to the financial statements

 for the year ended 31 December 2022

1 Earnings per share

The calculation of basic earnings per ordinary share ("EPS") is based on the profit on ordinary activities after taxation of £20,212,000 (2021: £19,907,000) and on 12,261,477 (2021: 12,261,477) 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. 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.

2 This financial information within 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 2022 have been extracted from the full accounts of the Group for that year which received an unmodified auditor's report, and which have not yet been delivered to the Registrar of Companies.  The financial information for the year ended 31 December 2021 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The report of the auditor on those filed accounts was unmodified and does not include a statement under section 498(2) or (3) of the Companies Act 2006.

This preliminary announcement has been prepared in accordance with the recognition and measurement principles of UK adopted international accounting standards in conformity with the requirements of the Companies Act 2006 and in accordance with the AIM rules. The financial information included in this preliminary announcement does not include all the disclosures required in accounts prepared in accordance with UK adopted international accounting standards in conformity with the requirements of the Companies Act 2006 and accordingly it does not itself comply with UK adopted international accounting standards in conformity with the requirements of the Companies Act 2006.  The accounting policies used in the preparation of this preliminary announcement have remained unchanged from those set out in the statutory accounts for the year ended 31 December 2021. They are also consistent with those in the full accounts for the year ended 31 December 2022, which have yet to be published.

The Group will post its annual report and accounts to shareholders on 25 May 2023, a copy of the annual report and accounts will be available on the company's website (www.londonsecurity.org).

The person responsible for arranging the release of this announcement on behalf of the Company is Richard Pollard, Company Secretary.

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