London Security : Annual Report 2022

A leader

in Europe's fire security industry

London Security plc

Annual Report and Accounts 2022

London

Security plc

Each year we provide fire protection for over 290,000 customers through our local presence in the United Kingdom, Belgium, the Netherlands, Austria, France, Germany, Denmark and Luxembourg.

Customer focus.

We continually strive to offer the highest quality of service and products to our valued customers. We employ the best trained and qualified engineers with quality products that have achieved the highest performance ratings to companies, governments or private individuals.

Our services and products are commercialised through long-established brands.

Nu-Swift, Ansul, Total, Premier and Master: the unique styling of our products makes them immediately recognisable to both the industry and customers alike.

We aim to achieve the highest levels of service and product quality.

Our employees are trained to the most stringent servicing standards and we develop the highest performance-rated fire products. These activities are performed whilst considering the preservation of the environment.

More information at londonsecurity.org

Highlights

IN THIS REPORT

Strategic report

01 Financial highlights

1. Our European Group brands
2. Chairman's statement

1. Financial review

1. Strategic report

Corporate governance

1. Directors and Company advisers

1. Report of the Directors

1. Directors' remuneration report

Financial statements

1. Independent auditor's report

1. Consolidated income statement

1. Consolidated statement of comprehensive income
2. Consolidated statement of changes in equity
3. Consolidated statement of financial position
4. Consolidated statement of cash flows
5. Notes to the financial statements

1. Parent Company balance sheet
2. Parent Company statement of changes in equity
3. Notes to the Parent Company financial statements

1. Notice of Annual General Meeting

1. Group companies

OUR EUROPEAN GROUP BRANDS

®

London Security plc continues to deliver industry-leading profit margins since acquiring the Ansul and Nu-Swift businesses. The challenges for the future are to continue to grow through acquisition and organically and to build upon our competitive advantage of being a complete fire protection solution provider.

STRATEGIC REPORT

FINANCIAL HIGHLIGHTS

Earnings per share

Operating profit

Revenue

164.8p
+1.5%
133.7	135.8	145.6	162.4	164.8
18	19	20	21	22

£27.2m
+0.0%
23.2	24.2	24.7	27.2	27.2
18	19	20	21	22

£188.9m

+13.4%

137.7	146.9	152.7	166.6	188.9
18	19	20	21	22

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Annual Report and Accounts 2022

STRATEGIC REPORT • CORPORATE GOVERNANCE • FINANCIAL STATEMENTS

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:

1. revenue of £188.9 million (2021: £166.6 million);

1. operating profit of £27.2 million (2021: £27.2 million);

1. profit for the year of £20.2 million (2021: £19.9 million);

1. cash of £34.0 million (2021: £35.7 million);

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

1. 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:

1. 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;

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

1. improved performance from our service business in continental Europe;

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

1. 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. A more detailed review of this year's performance is given in the Financial Review and the Strategic Report.

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.

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.

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.

02	London Security plc
Annual Report and Accounts 2022

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

STRATEGIC REPORT

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Annual Report and Accounts 2022