LONDON SECURITY PLC ANNUAL REPORT AND ACCOUNTS 2006 LONDON SECURITY PLC LONDON ANNUAL REPORT AND ACCOUNTS 2006 ANNUAL LONDON SECURITY PLC Wistons Lane Elland West Yorkshire HX5 9DS Website: www.londonsecurity.org _cover.indd 1 08/05/2007 11:52:19 CORPORATE STATEMENT GROUP COMPANIES London Security plc is a leader in Europe’s fire security industry. UNITED KINGDOM TVF (UK) PLC HOLLAND ASCO EXTINGUISHERS 56/69 Queens Road ANSUL B.V. Each year, we provide fire protection for over 200,000 customers COMPANY LIMITED High Wycombe Platinastraat 15 NL 8211 through our local presence in the United Kingdom, Belgium, Melissa House Buckinghamshire HP13 6AH AR Lelystad Holland, Austria and Switzerland. Unit 3 Tel: 01494 450641 Tel: 00 31 320 240864 Festival Court Fax: 01494 465378 Fax: 00 31 320 247707 Brand Street E-mail: [email protected] E-mail: [email protected] Our services and products are commercialised through the well Glasgow G51 1DR Website: www.tvfplc.co.uk NU-SWIFT BRANDBEVEILIGING B.V. Tel: 0141 427 1144 and long established brands of Nu-Swift, Ansul, Total, Premier and UNITED FIRE ALARMS LIMITED Ringoven 32 Fax: 0141 427 6644 Master. The unique styling of our products makes them immediately Wistons Lane 6826 TR Arnhem E-mail: [email protected] Elland Tel: 00 31 263 630330 recognisable to both the industry and customers alike. Website: www.asco.uk.com West Yorkshire HX5 9DS Fax: 00 31 263 640828 We aim to achieve the highest levels of service and product quality through GFA PREMIER LIMITED Tel: 0845 6015836 E-mail: [email protected] Wistons Lane Fax: 0845 6015837 continuing training of our employees to the most stringent servicing standards Elland E-mail: [email protected] AUSTRIA and the development of the highest performance rated fire products. These West Yorkshire HX5 9DS Website: www.unitedfirealarms.co.uk TOTAL FIRESTOP G.M.B.H. activities are performed whilst considering the preservation of the environment. Tel: 01422 377521 Percostrasse 15 Fax: 01422 377524 BELGIUM 1220 Wien From the largest blue chip companies to governments and private individuals, E-mail: [email protected] ALL-PROTEC N.V. Tel: 00 431 259 36310 Bogaertstraat 16 Fax: 00 431 259 363118 our customers know that our name stands for integrity of service by the best HOYLES FIRE & SAFETY LIMITED 9910 Knesslare E-mail: [email protected] trained and qualified individuals with quality products that have achieved the Wistons Lane Tel: 00 32 9375 2044 Elland highest performance ratings. Fax: 00 32 9374 6895 SWITZERLAND West Yorkshire HX5 9DS E-mail: [email protected] FEUERLOSCHER NU-SWIFT Tel: 01422 314351 (SCHWEIZ) AG Fax: 01422 314311 ANSUL S.A. 64.8 10.9 Bahnhofplatz 1 64.4 E-mail: [email protected] Industrialaan 35 2501 Biel/Bienne Website: www.hoyles.co.uk B-1702 Groot-Bijgaarden 9.6 Tel: 00 41 32 323 1314 Tel: 00 32 2467 7211 L. W. SAFETY LIMITED Fax: 00 41 32 322 0412 Fax: 00 32 2466 4456 56/69 Queens Road E-mail: [email protected] 9.3 9.3 E-mail: [email protected] High Wycombe 53.8 Website: www.ansul.be MACLIN S.A. 52.3 9.1 Buckinghamshire HP13 6AH Chemin de la Mairie, 5 Tel: 01422 314350 DIMEX TECHNICS S.A. 1223 Cologny 48.1 Fax: 01422 314311 42 rue de l’eglise Tel: 00 41 22 735 1400 E-mail: [email protected] 4710 Lontzen Herbesthal Fax: 00 41 22 700 5789 Website: www.lwsafety.co.uk Tel: 00 32 8788 0242 E-mail: [email protected] Fax: 00 32 8788 3766 NU-SWIFT INTERNATIONAL LIMITED E-mail: [email protected] OTHMAR HUG 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Wistons Lane FEUERSCHUTZ G.M.B.H. TURNOVER (£M) OPERATING PROFIT (£M) Elland IMPORTEX S.A. Postfach 4012 West Yorkshire HX5 9DS 42 rue de l’eglise 4055 BS Basel Tel: 01422 372852 4710 Lontzen Herbesthal Tel: 00 41 61301 8272 Fax: 01422 379569 Tel: 00 32 8788 0242 40.0 63.0 15.5 Fax: 00 41 61301 8274 59.0 E-mail: [email protected] Fax: 00 32 8788 3766 37.7 56.8 E-mail: [email protected] 14.7 Website: www.nu-swift.co.uk E-mail: [email protected] 14.3 Website: www.hugfeuerschutz.ch 55.2 36.0 M K FIRE LIMITED SAS SPRL 50.3 TOTAL TF AG 13.9 56/69 Queens Road 42 rue de l’eglise 13.7 Bahnhofplatz 1 33.4 High Wycombe 4710 Lontzen Herbesthal 2501 Biel/Bienne Buckinghamshire HP13 6AH Tel: 00 32 8788 0242 31.8 Tel: 00 41 32 323 1314 Tel: 01494 769744 Fax: 00 32 8788 3766 Fax: 00 41 32 322 0412 Fax: 01494 465378 E-mail: [email protected] E-mail: [email protected] E-mail: customer.service@mkfire.co.uk Website: www.mkfire.co.uk 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 BASIC EARNINGS PER SHARE (P) ADJUSTED EARNINGS PER SHARE (P) EBITDA (£M) The tables have not been adjusted for implementation of FRS 17 and FRS 21 in years 2002 and 2003. _cover.indd 2 08/05/2007 11:52:19 01 LONDON SECURITY PLC ANNUAL REPORT AND ACCOUNTS 2006 EUROPEAN GROUP BRANDS London Security plc continues to deliver industry leading profit margins since acquiring the Ansul and Nu-Swift businesses in December 1999. 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. IFC Corporate statement 19 Independent auditors’ report 01 European Group brands 20 Consolidated profit and 02 Chairman’s statement loss account 04 Operational review: UK 21 Consolidated balance sheet 05 Operational review: Belgium 22 Company balance sheet 06 Operational review: Holland 23 Consolidated cash flow statement 07 Operational review: Austria 24 Consolidated statement of total 08 Operational review: Switzerland recognised gains and losses 09 Financial review 24 Reconciliation of movements in Group equity shareholders’ funds 10 Directors 24 Reconciliation of movements in 11 Company advisers Company equity shareholders’ funds 12 Report of the Directors 25 Notes to the financial statements 15 Corporate governance statement 43 Notice of annual general meeting 18 Directors’ remuneration report IBC Group companies _0_LON_ar06_front.indd 1 08/05/2007 11:54:55 02 LONDON SECURITY PLC ANNUAL REPORT AND ACCOUNTS 2006 CHAIRMAN’S STATEMENT FINANCIAL HIGHLIGHTS TRADING REVIEW The Group has developed new ranges Financial highlights of the audited results A detailed Operational Review of fire extinguishers and successfully for the year ended 31 December 2006 is set out in a separate section. launched these products late in 2005 compared with the year ended and 2006. These extinguishers show 31 December 2005 are as follows: The Group’s operating profit improvements in terms of fire ratings, has increased by £529,000 (6%), ease of operating and discharge times, Turnover of £64.4 million despite one-off charges relating to and also enabled us to achieve cost (2005: £64.8 million) reorganisation consisting of onerous efficiencies from implementation of lease provisions of £350,000 (2005: £Nil) these new ranges. Earnings before interest, taxation, and redundancy costs of £379,000 depreciation and amortisation (2005: £39,000). Group operating profit at 15% (“EBITDA”) of £14.7 million of turnover and EBITDA at 23% (2005: £14.3 million) In mainland Europe the Group of turnover continue to be among has gone from strength to strength, industry leading results and are Operating profit before building upon its strong position in expected to increase further as the amortisation of goodwill of servicing fire extinguishers and hose full year effects of the various initiatives £12.7 million (2005: £12.2 million) reels and growing our new activities implemented in 2006 are realised. of alarms, emergency lights and Operating profit of £9.6 million modular first-aid boxes. ACQUISITIONS (2005: £9.1 million) It remains a principal aim of the In the UK, the profit increase is largely Group to grow through acquisition. Profit on ordinary activities due to initiatives described further in the Acquisitions are being sought before taxation of £8.3 million Operational Review and improved credit throughout Europe and the Group (2005: £8.1 million) control. In addition, in 2006 we have not will invest at the upper end of the continued with the lower margin alarm price spectrum where an adequate installation type of contracts which had return is envisaged. been undertaken in 2005. FINANCIAL HIGHLIGHTS Financial highlights for the year ended 31 December 2006: Turnover of Earnings before interest, taxation, depreciation and amortisation (“EBITDA”) of £64.4 million £14.7 million (2005: £64.8 million) (2005: £14.3 million) _0_LON_ar06_front.indd 2 08/05/2007 11:54:55 03 LONDON SECURITY PLC ANNUAL REPORT AND ACCOUNTS 2006 In December 2006 we acquired SAS, exercise that was completed ANNUAL GENERAL MEETING a Belgian fire alarm company. We will in July 2005 when the Company The Annual General Meeting will be use this acquisition to develop the purchased 2.2 million shares held at 10 Bruton Street, 5th Floor, alarm market in Belgium and other for cancellation. London W1J 6PX on 7 June 2007 continental countries where we have at 11.00 a.m. You will find enclosed a fire activity. Consequently, at the forthcoming a form of proxy for use at that meeting Annual General Meeting, the Board will which you are requested to complete In 2007, we have acquired contracts request that shareholders vote in favour and return in accordance with the to service fire equipment from of a resolution to renew the authority to instructions thereon.