London Security continues to eye up acquisition targets

FIRE protection business London Security said it is optimistic for further success in 2014 as it confirmed a “principal aim” of the group is to grow through acquisition.

The Elland-headquartered company, which trades under the brand names Ansul, Nu-Swift, Total, Premier and Master, said 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.”

In its interim results for the six months to June, revenue increased by £3.5m (7.3%) to £51.3m while operating profit increased by £400,000 (4.4%) to £9.4m.

It said the growth was in despite the movement in the Sterling to Euro average exchange rate, which has reduced like for like revenue by £1.3m and operating profit by £300,000.

London Security said the increases reflect the contribution from two new subsidiaries within the group – Noris Feuerschitzgerate G.m.b.H. acquired in May 2013 achieved sales of £2.3m in the period and contributed an operating profit of £0.2 m.

GC Fire Protection, which started operations in July 2013, this year has recorded sales of £0.9m and operating profit of £0.1m.

“The operating profit margin of these two new subsidiaries is below that achieved in the group’s other more established businesses. As these companies are integrated into the group’s operations directors are confident of improving returns,” the company said.

In the six months to the end of June the group has acquired a total of five well established businesses at a cost of £0.6m (2013: five businesses at a cost of £3.3 million).

The integration of these businesses into the group has, so far, been successful and results are in line with expectations. In July a further acquisition was made in the UK at a cost of £0.5m.

On its outlook for the remainder of the year, the group said: “Economic growth in the group’s market has been depressed but our business remains strong, cash generative and well developed, with positive net funds. As a leading provider in this market with a well-diversified and loyal customer base, the board is optimistic for further success in 2014.”