TIDMCSSG
RNS Number : 0933E
Croma Security Solutions Group PLC
09 March 2022
Croma Security Solutions Group Plc
("CSSG", "Croma", "the "Company" or the "Group")
Interim Results
A Solid First Half
Croma Security Solutions Group plc (AIM:CSSG), the total
security services provider is pleased to announce its unaudited
interim results for the six months to 31 December 2021.
Financial Highlights:
-- A good performance in a challenging market
-- Continued steady demand for the Company's security solutions
-- Revenues up by 9% to GBP17.87m (H1 2020: GBP16.36m)
-- Generating EBITDA of GBP0.87m (H1 2020: GBP0.86m)
-- Other than lease liabilities, the Group remains ungeared with
cash balances of GBP3.5m (31 December 2020: GBP3.9m)
-- No interim dividend declared, however the Board expect to pay
a final dividend once the financial year has been completed
Operational Highlights: Expansion of Security Store Portfolio
and New Technology led Partnerships
-- Acquired Manchester based security store in November 2021 and
further opportunities in the pipeline
-- Systems and Locksmiths businesses increased revenues by 16%
despite closing security stores during Covid-19 restrictions
-- In October 2021, announced the Group is the UK strategic
partner for iLOQ, a leading Finnish security business
-- In January 2022, post the period end, the Group announced a
new strategic partnership with Fingo a biometric identity
authentication and payments platform
PROception leading the way for modern security solution
-- Croma PROception the ground-breaking front of house business,
which combines reception and security is establishing a new
standard in building security
-- Overall, manned guarding revenues increased by 8% alongside
offering increased optionality over a wider range of security
solutions
Outlook
-- Second half trading has started well and therefore the Board
believes the business is well placed to deliver a good a trading
performance for the year.
Sebastian Morley, Chairman of CSSG, said: "We are pleased to
have delivered a good performance amidst a challenging market.
Demand from our client base was steady which given the disruption
caused by the pandemic was a solid performance. We completed the
acquisition of a new security store in Manchester, and we believe
we have a good pipeline of further opportunities. Similarly, we see
opportunity in technology led areas such as the tie up with
Biometric expert Fingo and iLOQ the specialist locks business.
Overall, the business is well placed, our balance sheet is strong,
our core businesses are profitable and cash generative and we are
adding to them with bolt on acquisitions and through partnerships
with technology leaders ."
For further information visit www.cssgroupplc.com or
contact:
Croma Security Solutions Group Plc Tel: +44 (0)7768 006 909
Sebastian Morley (Chairman)
WH Ireland Limited Tel: +44 (0)207 220 1666
(Nominated Adviser and Broker)
Mike Coe
Jessica Cave
Sarah Mather
Novella Tel: +44 (0)203 151 7008
Tim Robertson
Fergus Young
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 ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
Chairman's Statement
Introduction
I am pleased to report Croma's unaudited interim results for the
six months to 31 December 2021 which saw the Group generate
revenues of GBP17.87 million and EBITDA of GBP0.87 million. A good
performance in a challenging market during which we managed any
change caused by the pandemic and continued to deliver
uninterrupted guarding services for the buildings, assets and
individuals under our protection. Alongside this, the Company
continued to focus on expanding our services and asset base in
pursuit of our objective of establishing Croma as the British
security brand.
Group strategy
Our overall strategy remains focused on:
-- setting new standards in providing premium guarding services,
community awareness schemes and innovative front of house solutions
under the Croma Vigilant and PROception brands;
-- building a national network of Croma Security Centres,
through which all the Group's services are sold; and
-- becoming the British security brand.
Like many businesses, as restrictions associated with the
pandemic recede, we can reflect on what we have learnt from
operating under Covid-19 and have a better understanding of the
flexibility of our teams, operating structures and have uncovered
additional efficiencies all of which we are feeding into the
business and will further support the Company in achieving its
objectives.
With the deeply saddening events unfolding in Ukraine coupled
with the visible inflationary cost increases, all businesses will
need to adapt. While Croma is reasonably positioned to manage
inflationary cost increases, it is likely some customers will be
impacted and may well look to reduce the costs of their security
solutions. Anticipating this, Croma Vigilant has introduced a wider
range of security solutions with more flexible cost structures.
Longer term, the prospects look unchanged for the Group. The UK
security market continues to be made up of a large number of
smaller enterprises laying the ground for the Group to act as a
consolidator. In the period, the Company completed the acquisition
of a security store in Manchester and there is a good pipeline of
similar opportunities.
The macro security trends also remain unchanged; individuals,
government and business all want to ensure their safety and that of
their assets. Security attacks are increasing and have become more
sophisticated. Consequently, technology is a central part of our
security solutions, and to keep ahead we are significantly evolving
our offer every year. That said, at the heart of all of Croma's
security solutions is a strong military ethos and a focus on
security personnel being a part of a premium service in which
individuals are well trained, well-motivated and well paid. The
combination of a strong team and leading technology continues to
prove to be a compelling commercial proposition.
Croma Vigilant
Croma Vigilant is the largest part of our business providing
manned guarding for assets and individuals. Employing over 950
high-grade security personnel throughout the UK and continued to
deliver an uninterrupted service throughout the period under review
despite the restrictions and staff isolation required to comply
with Covid-19 related rules.
The adaptability of the whole team has been very impressive
coupled with excellent operational organisation. There is no doubt
the pandemic has shown the division what it is capable of, if
required. Croma Vigilant's point of differentiation is that it
offers a premium security solution in all aspects and has built a
successful business based on this proposition. That said, more
recently due to rising cost pressures on customers, it is providing
the same premium manned guarding services but on a more flexible
basis. For example, replacing a 24-hour guarding service of an
office building with regular patrol visits. This flexibility is
important to retain and meet the full range of our customers' needs
and budgets.
Improving on the traditional security offering is fundamental to
the success of the business. The introduction and subsequent demand
for the PROception service is an excellent example of the Group
leading the way for modern security solutions. Making the reception
desk part of a building's security solution has improved the
appearance of the security team, introduced a more technology led
solution and created economies of scale with reception duties being
combined with security. The success of this new modern guarding
concept is reflected in the strong customer demand.
Reflecting the prevailing trends in the market, an increasing
proportion of this division's income is now contracted which
increases visibility over future earnings and enhances our ability
to invest for the future.
Croma Systems & Locksmiths
Croma Systems & Locksmiths, the provider of a range of
innovative security technology services including CCTV, Intruder
Alarms, FastVein (Biometrics) and high security locks, delivered a
resilient performance.
The division now operates through 11 security centres with one
added following the acquisition of a site in Manchester in October
2022. The security centres are all operating under the Croma brand
and are marketing, under one roof, the entire range of the Group's
services.
The Company has also formed two new strategic partnerships both
of which have significant future potential.
In October 2021, the Company announced it had agreed to be the
UK strategic partner for iLOQ, a leading Finnish security business.
Specialising in locks, iLOQ has developed a new battery free door
lock which can be opened by smartphone. The lock is powered by the
mobile phone opening it, a unique feature clearly differentiating
it from competing products. The potential applications for the
mobile iLOQ are significant across multiple industries given its'
advantages relating to security, data collection and central
control. Under the partnership, Croma will sell, install and
maintain iLOQ equipment in the UK.
In January 2022, the Company announced a new strategic
partnership with FinGo, a biometric identity authentication and
payments platform. The Company's existing biometrics solution,
FASTVEIN(TM) which provides quick, easy to use, accurate and
cost-effective identity management, is a natural fit with FinGo.
Working together will allow Croma to expand its product suite to
include payments alongside existing identity and access control
offerings in these sectors. This partnership will also expand
FinGo's digital identity management and payment expertise to
include access management.
Financial Review
Revenue increased by 9% for the six months to 31 December 2021
to GBP17.87m (H1 2020: GBP16.36m). Cash balances at 31 December
2021 are GBP3.5m (30 December 2020: GBP3.9m). Earnings per share
increased 13.8% to 2.97p per share (H1 2020: 2.61p).
Other than lease and short-term trading liabilities, the Group
remains free from borrowings.
Dividend
The Board has decided to maintain the decision to not pay an
interim dividend and instead to consider the payment of a single
final dividend, allowing the business to complete the financial
year before deciding on the level of the dividend to be paid for
the 12-month period. This maintains a slightly more prudent
approach, started during the pandemic, and now reflecting the
continuation of challenging market conditions.
Outlook
Looking ahead, we believe the business is well placed with no
long-term borrowings and GBP3.5m of cash to support future
investment. All business units are performing well and we are
seeing opportunities to expand organically and via acquisition.
Sebastian Morley
Chairman
9 March 2022
CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR 6 MONTHSED 31 DECEMBER 2021
6 months 6 months Year
ended ended ended
31-Dec-21 31-Dec-20 30-Jun-21
unaudited unaudited audited
Notes GBP000s GBP000s GBP000s
Revenue 17,869 16,362 32,539
Cost of sales (14,431) (13,560) (27,154)
----------
Gross profit 3,438 2,802 5,385
Administrative expenses (2,936) (2,676) (4,898)
Other operating income 62 377 764
---------- ----------
Operating profit 564 503 1,251
Analysed as:
Earnings before interest, tax, depreciation,
impairment, and amortisation of intangible
assets 866 863 1,982
Impairment - - -
Amortisation (45) (83) (166)
Depreciation (257) (277) (565)
Operating profit 564 503 1,251
Finance costs (24) (24) (40)
Profit before tax 540 479 1,211
Tax (97) (91) (234)
Profit/(loss) for the year from continuing
operations 443 388 977
Profit and total comprehensive income
for the period attributable to owners
of the parent 443 388 977
Earnings per share 3
Basic and diluted earnings/(loss)
per share (pence) from continuing
operations 2.97 2.61 6.56
CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2021
31-Dec-21 31-Dec-20 30-Jun-21
unaudited unaudited audited
GBP000s GBP000s GBP000s
Assets
Non-current assets
Goodwill 6,464 6,454 6,454
Other Intangible assets 246 373 290
Property, plant and equipment 1,433 535 488
Right-of-use assets 894 943 997
9,037 8,305 8,229
Current assets
Inventories 800 620 681
Trade and other receivables 6,047 5,440 5,097
Cash and cash equivalents 3,509 3,879 5,433
10,356 9,939 11,211
Total assets 19,393 18,244 19,440
Liabilities
Non-current liabilities
Deferred tax (88) (116) (91)
Lease liabilities (586) (685) (753)
(674) (801) (844)
Current liabilities
Trade and other payables (5,844) (5,353) (5,925)
Borrowings and Lease liabilities (352) (301) (293)
(6,196) (5,654) (6,218)
Total liabilities (6,870) (6,455) (7,062)
Net assets 12,523 11,789 12,378
========== ========== ==========
Issued capital and reserves attributable
to owners of the parent
Share capital 794 794 794
Treasury shares (399) (399) (399)
Share premium 6,133 6,133 6,133
Merger reserve 2,139 2,139 2,139
Capital redemption reserve 51 51 51
Retained earnings 3,805 3,071 3,660
Total equity 12,523 11,789 12,378
========== ========== ==========
CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR 6 MONTHSED 31 DECEMBER 2021
6 months 6 months Year
ended ended ended
31-Dec-21 31-Dec-20 30-Jun-21
unaudited unaudited audited
Notes GBP000s GBP000s GBP000s
Cash flows from operating activities
Profit before taxation 540 479 1,211
Depreciation, amortisation and impairment 314 360 731
(Profit) on sale of property, plant
and equipment (12) (4) (19)
Net changes in working capital 4 (1,017) (420) 374
Financial expenses 24 24 40
Corporation tax paid (131) (72) (182)
Net cash (used)/generated from operations (282) 367 2,155
Cash flows from investing activities
Purchase of business including acquisition
costs net of cash
acquired (137) - -
Purchase of property, plant and equipment (1,093) (65) (138)
Proceeds on disposal of property, plant and
equipment 18 8 28
Net cash used in investing activities (1,212) (57) (110)
Cash flows from financing activities
Payments to reduce lease liabilities (123) (213) (408)
Increase/(reduction) in borrowings (1) 3 11
Dividends paid (298) (291) (291)
Interest paid (8) (6) -
Net cash used in financing activities (430) (507) (688)
Net (decrease)/increase in cash and
cash equivalents (1,924) (197) 1,357
Cash and cash equivalents at beginning
of period 5,433 4,076 4,076
Cash and cash equivalents at end of
the period 3,509 3,879 5,433
CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Capital
Share Treasury Share Merger Redemption Retained Total
Capital Shares Premium Reserve Reserve Earnings Equity
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Balance at 1 July 2021 794 (399) 6,133 2,139 51 3,660 12,378
Profit for the period - - - - - 443 443
Dividends paid - - - - - (298) (298)
At 31 December 2021 794 (399) 6,133 2,139 51 3,805 12,523
========= ========= ========= ========= ============ ========== ========
Balance at 1 July 2020 794 (399) 6,133 2,139 51 2,974 11,692
Profit for the period - - - - - 388 388
Dividends paid - - - - - (291) (291)
Balance at 31 December
2020 794 (399) 6,133 2,139 51 3,071 11,789
========= ========= ========= ========= ============ ========== ========
Balance at 1 July 2020 794 (399) 6,133 2,139 51 2,974 11,692
Profit for the year - - - - - 977 977
Dividends paid - - - - - (291) (291)
Balance at 30 June 2021 794 (399) 6,133 2,139 51 3,660 12,378
========= ========= ========= ========= ============ ========== ========
NOTES TO THE INTERIM FINANCIAL STATEMENTS FOR 6 MONTHS TO 31
DECEMBER 2021
1. Basis of preparation
The interim financial information in this report has been
prepared using accounting policies consistent with IFRS as adopted
by the UK. IFRS is subject to amendment and interpretation by the
International Accounting Standards Board (IASB) and the IFRS
Interpretations Committee and there is an ongoing process of review
and endorsement by the UK Endorsement Board. The financial
information has been prepared on the basis of IFRS that the
Directors expect to be adopted by the UK and applicable as at 30
June 2022. The Group has chosen not to adopt IAS 34 "Interim
Financial Statements" in preparing the interim financial
information.
Statutory accounts
Financial information contained in this document does not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006 ("the Act"). The statutory accounts for the
year ended 30 June 2021 have been filed with the Registrar of
Companies. The report of the auditors on those statutory accounts
was unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under section 498(2) or
(3) of the Act.
The financial information for the six months ended 31 December
2021 and 31 December 2020 is unaudited.
2. Accounting policies
The accounting policies applied by the Group in this interim
report are the same as those applied by the Group in the
consolidated financial statements for the year ended 30 June
2021.
A number of other new and amended standards and interpretations
are effective from 1 January 2021 but they do not have a material
effect on the Group's financial statements.
3. Earnings per share
Earnings per share is based upon the profit for the period and
the weighted average number of shares in issue and ranking for
dividend.
The following reflects the profit and share data used in the
basic and diluted EPS computations:
6 months 6 months Year
ended ended ended
31-Dec-21 31-Dec-20 30-Jun-21
Numerator
Profit/(loss) for the year on continuing
operations and used in EPS (GBP000s) 443 388 977
Denominator
Number of shares (thousands)
Weighted average number of shares
used in basic and diluted EPS 14,902 14,902 14,902
4. Note supporting the cash flow statement
6 months 6 months Year
ended ended ended
31-Dec-21 31-Dec-20 30-Jun-21
unaudited unaudited audited
GBP000s GBP000s GBP000s
Net changes in working capital
(Increase)/Decrease in inventories 17 144 61
(Increase)/decrease in trade and other
receivables (895) (905) 1,628
Increase in trade and other payables (138) 341 9
(1,017) (420) 1,698
5. Financial Information
The Board of Directors approved this interim report on 9 March
2022.
A copy of this report can be obtained by writing to the Finance
Director at our registered office; Unit 7 & 8, Fulcrum 4,
Solent Way, Whiteley, Hampshire PO15 7FT or from our website at
www.cssgroupplc.com
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