TIDMCSSG
RNS Number : 6984C
Croma Security Solutions Group PLC
21 October 2020
21 October 2020
Croma Security Solutions Group Plc
("Croma", "CSSG", the "Company" or the "Group")
Final Results
Resilient Trading Performance
Croma Security Solutions Group plc, the AIM listed total
security services provider, announces its final results for the
year end ended 30 June 2020.
Financial Highlights
-- Positive operational and trading response to Covid-19 which
has resulted in EBITDA of GBP1.75m (2019: GBP1.87m), an uplift on
previous guidance representing a better than expected performance
by the Group
-- Generated revenue of GBP32.3m (2019: GBP34.6m) reflecting the
temporary retail closures during the period being partially offset
by increased demand for manned guarding services
-- Reported profit before tax was reduced to GBP87k (2019:
GBP1.48m) including two non-cash items, an increased depreciation
charge of GBP0.57m under IFRS16 and an impairment charge of
GBP0.86m primarily driven by an increase in the Group's cost of
capital
-- Board's ongoing confidence reflected in an increased final
dividend of 1.2p making a total dividend for the year of 1.95p
(2019: 1.8p)
-- Excellent financial platform with net cash of GBP4.1m
Trading Highlights
-- Significant contract wins in the period
o GBP5 million per annum contract effective from June 2020 with
leading owner and developer of central London property
o GBP1.3 million per annum contract commencing 2021, with
Savills to manage the security for the Edinburgh St James
Centre
-- PROception had another strong year and is now fully
integrated into the Croma Vigilant offering
-- Retail network slowed in-line with Covid-19 restrictions but
re-opened in July with trading moving back to normal levels
-- Successful execution of our business continuity strategy to
manage the disruption caused by Covid-19
Trading Outlook
-- Strategy remains focused on creating a national network of
Croma Security Centres alongside setting new standards in providing
premium guarding services.
-- Trading post the year end is progressing well underlining the
Group's ability to continue to operate
successfully during the Covid-19 crisis
-- Potential new acquisition opportunities arising out of the pandemic
Sebastian Morley, Chairman of CSSG, said,
"We are pleased with the way the Group has responded to the
current crisis. The trading performance for the year was resilient
and this has continued into the current financial year. Demand for
our premium security services has been consistent and while the
retail side of our business has naturally dipped this has been
partially offset by an increase in manned guarding services.
Looking ahead, the Group has high levels of cash reserves, no
borrowings and remains well placed to expand its security network
with interesting new opportunities arising in our markets as a
result of the pandemic."
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
Chris Savidge
Novella
Tel: +44 (0)203 151 7008
Tim Robertson
Fergus Young
This announcement contains inside information as defined in
Article 7 of the Market Abuse Regulations No. 596/2014 and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
Chairman's Statement
I am pleased to be able to confirm a better than expected
performance by the Group, with the results for the full year
exceeding our earlier guidance. Like many at the outset of the
pandemic our reaction was one of caution, and we suspended our
interim dividend payment, closed our retail stores and worked to
conserve cash and protect the business. As events unfolded it
became clear the business was going to be able to weather the
crisis reasonably safely, and while some areas such as retail would
naturally be affected, other areas would prosper. Ultimately,
Covid-19 did impact the results for the year, but our operations
remain largely intact and the Board is confident in the Group's
ability to continue to trade successfully through this crisis which
is reflected in our decision to re-instate the interim dividend and
pay a final dividend of 1.2p representing an increase of 9% over
the prior year.
I would also like to make a particular mention of the way our
teams have pulled together during a very challenging period, which
has been the key factor behind our ability to continue to operate
so successfully. So, on behalf of the Board, I would like to thank
all our employees for their commitment and flexibility during an
extraordinary period.
Strategy for Growth
The strategic direction for Croma is unchanged. Our focus is on
establishing Croma as the British security brand in Britain. Two
years ago, there was a marked shift in demand for the Group's
services, driven by an increased and perceived level of risk across
society arising from a mix of terror incidences and rising crime
levels. The response from both the public and private sector was to
increase the protection of their assets and themselves by opting
for premium security services as offered by Croma. This created an
opportunity to expand the Group's market position and commence
establishing a national network of Croma Security Centres.
The Centres have evolved from the Group's retail stores to
provide the full range of the Group's services from manned guarding
to CCTV, intruder alarm and advanced security systems as well as
high security locks. Whereas previously stores focused on the
consumer market only, the Croma Security Centres now sell
successfully into both commercial and domestic markets. Currently,
the Group has 10 centres and is actively seeking to acquire
independent locksmith stores or small chains in suitable locations
to be integrated into the Croma Security centre network. During
2020 the pandemic has slowed the Group's ability to complete
transactions but also added to the pipeline of future
opportunities.
At the heart of the Group's security activities is a strong
ex-military ethos. It is this ethos that ensures Croma provides a
premium level approach to every aspect of delivering security
services and solutions. Perhaps the best example of the Company's
ethos is through the approach of the Group's largest business, the
manned guarding division, Croma Vigilant. The industry as a whole
has a poor reputation for providing low paid and lowly motivated
security officers. By contrast, Croma's security officers are
capable and highly trained with the skillsets to manage a range of
scenarios. Providing a smart, premium service has enabled us to set
new standards across the industry for the provision of manned
guarding.
The final element to our strategy for growth is the
incorporation of technology and innovation into the security
solutions we provide. From using the latest in biometrics
recognition technology to introducing a new front of house security
service called PROception, we are very focused on leading our
industry in developing modern security solutions.
Trading Performance
With the backdrop of operating alongside the pandemic, all three
divisions performed resiliently in the year under review. Trading
levels were slightly lower than the prior year but the underlying
performance of all the businesses is sound.
Croma Vigilant, our manned guarding division performed well.
While revenues contracted overall, this was partially offset by an
increase in project work. Critically, the division secured two
major contract wins and extensions in the year with Savills and a
well-known London focused property company which together are worth
GBP6.3 million annually. PROception is the emerging jewel in the
crown, enabling the team to present existing and new clients with a
new approach to safeguarding buildings that integrates security
into front of house services.
The trading performances of both Croma Security Systems and
Locksmiths were naturally also affected by the pandemic but
overall, given the store closures forced upon us during the period,
they performed resiliently.
Croma Biometrics remains a significant opportunity for the Group
with FastVein(TM) coming to the forefront as a potent biometric
high-speed human identifier.
The impairment referred to in note 4 below was largely driven by
an increase in our cost of capital to 12.7% (2019: 11.6%).
Nevertheless, our balance sheet remains strong with no significant
borrowings (other than lease liabilities) and cash at the year-end
of GBP4.1m (2019:1.7m).
Dividend
Reflecting strong cashflow over the year, the Board is pleased
to recommend a final dividend to shareholders of 1.2p per share
(total 1.95p per share for the year) and subject to approval at the
Annual General Meeting to be held on 25 November 2020, the final
dividend will be paid on 27 November 2020 to all shareholders on
the register at the close of business on 13 November 2020. The
shares will be marked ex-dividend on 12 November 2020.
Outlook
An extraordinary year did not derail our business but instead
the Group has adapted well to the new challenges enabling us to
maintain our services fully. This is testimony to the strength in
depth of the Group and to its contingency planning when client
services were maintained despite significant numbers of staff in
quarantine or furloughed. This was a test for our Group as it was
for all companies and I believe we passed. This bodes well for the
near future as we continue to operate under restrictions, and we
are now confident in our ability to do so.
Importantly, we have also shown our ability to win material new
mandates during the period, and since the year end the business is
trading well. Taken together, we believe we are well positioned to
make good progress for the year ahead.
Sebastian Morley
Chairman 21 October 2020
Operational Review
The Group's strategic objectives are:
-- to deliver market leading full-service security offerings to
some of the largest corporations and government departments. This
is achieved by maintaining quality of service as a priority,
focusing on meeting the full range of our clients' security needs,
and leveraging both our brand and client base;
-- to produce consistent growth in financial performance, by
maintaining our margins and managing our costs. Acquisitions will
be pursued only when they can be seen clearly to add value to the
Group;
-- to develop and bring to market new technologies, and;
-- to deliver attractive shareholder returns.
The Group's longer-term objectives are: to grow our core
offerings in the UK and abroad until we are the security provider
of choice to leading large corporates; to expand our service
offering to include e-security; and to develop specific high-end
national projects.
The maintenance and expansion of solutions to the present client
base is fundamental. The Group continues to expand the services to
long-term clients, some of whom currently use a diverse range of
contractors, in order to bring all their needs under one roof when
this makes good business sense for both parties.
The performance of each business segment is discussed below:
Croma Vigilant
Croma Vigilant, our largest division, generated sales of
GBP27.0m (2019: GBP28.5m) and operating profit of GBP1.1m (2019:
GBP1.4m). Covid-19 was responsible for some contraction of sales
which were partially offset by increased project work including
keyholding and patrols in new areas due to the pandemic.
A critical factor in achieving this result was the ability of
the division to adapt to the new challenges arising from Covid-19
and one of the advantages of managing a business with a strong
military ethos is that there is within the management team a
familiarity with adapting to a crisis situation. The Company had in
the ordinary course of managing the business run a series of
business continuity scenarios in December 2019 which were directly
applicable to providing the operational response in the last six
months. As a result, despite having over 100 security staff in self
isolation at one time, the Company was still able to deliver its
premium guarding services to all existing clients and critically
meet the increased demand created by Covid-19. This was achieved
whilst implementing all safety precautions set out by the UK
government and providing the necessary PPE workwear.
Contracted revenues over a period exceeding one month
represented approximately 84% of income, ensuring that the Company
continues to have good visibility over the reliability of future
revenues. There was a similar split in income to previous years
between private and public, remaining at approximately two
thirds/one third respectively. Project work remains an important
income stream and while it is often higher margin, it is less
predictable. Our focus is on securing longer-term contracts, which
are a better basis upon which to build the business for the future,
good examples of which are the two larger contracts won during the
year under review together worth GBP6.3 million annually.
Croma Vigilant provides manned guarding for assets and
individuals and now employs over 850 security personnel throughout
the UK. Fundamental to the division's success is the military ethos
that pervades all aspects of the way the division is run, and all
contact with customers. Alongside this approach is a focus on
innovation, and a fundamental change for the division and its
future has been the creation of PROception.
Led by ex-policewoman Ruth McGowan, PROception is the Group's
innovative new front of house concept, making the modern reception
part of a building's security strategy. PROception provides
security trained receptionists to both manage the front desk and
play an active role in security and is transforming the way manned
security services are delivered in offices, hotels and public
institutions.
There is no doubt that the response to PROception amongst our
customers has been very positive and that we are behind a
transformation in the way many 'front-of-house' services will be
managed going forward. This is translating into an expanded and
often higher margin role for Croma Vigilant by incorporating
PROception into a total manned guarding security solution.
Croma Vigilant is part of the Community Safety Accreditation
Scheme enabling the division to provide private security within
communities using mobile and foot patrol officers. This continues
to be an area of growth as local councils and local communities
take action to control their neighbourhoods. Croma Vigilant's
reputation is growing in this area though our ability to provide a
highly disciplined force of security personnel able to support the
local police.
The first months of the new financial year have started
positively and while Covid-19 restrictions do remain in place we
are now confident in our ability to work within them.
Croma Security Systems
Croma Security Systems recorded sales of GBP2.46m (2019:
GBP2.70m) and an operating profit before impairment of GBP0.28m
(2019: GBP0.34m).
In support of the Group's focus on providing total security
solutions, Croma Security Systems continues to provide a full range
of electronic security solutions including CCTV, high security
locks to FastVein(TM) biometrics technology for high speed human
identification.
During the financial year Croma Security Systems successfully
gained a licence from the Financial Conduct Authority ("FCA") and
is now able to provide product and services to certain customers on
a deferred payment or credit basis.
Croma Locksmiths
Croma Locksmiths, which operates through 10 security centres on
the South Coast of the UK and centrally through the Group,
delivered a resilient performance with sales of GBP2.89m (2019:
GBP3.42m) and operating profit before impairment of GBP0.36m (2019:
GBP0.48m). As a result of Covid-19 all stores closed on 23 March
2020 and reopened on a phased basis from May 20. Since re-opening
trading has been positive and retail sales and footfall are moving
back towards pre-Covid-19 levels.
Under the Group's strategy to become the British Homeland
security brand through establishing a national chain of modern
security centres, this division has evolved substantially over the
past 18 months. All retail outlets have been converted into
security centres and offer the full range of Croma's security
solutions from manned guarding, CCTV, intruder alarm and advanced
security systems as well as high security locks.
The focus is no longer to cater for the security needs of the
individual consumer, but instead the security centres are able to
provide sophisticated security solutions for both domestic and
commercial customers, if needed, drawing upon all the resources and
services of the larger Group.
In the last 18 months, the Company has acquired three locksmith
stores which have all been converted into security centres. The
opportunity to acquire further stores has been slowed by the
pandemic but the market is highly fragmented and there are
opportunities coming available as independent store owners choose
to retire or the market environment makes a sale the preferred
option. The Group has a clear set of acquisition criteria which
based on the progress of the first acquisitions are working well.
Currently, the store network is focused on affluent areas close to
London and in the South of England.
Trading in the security centres is returning to normal following
re-opening and unless there is further disruption from Covid-19 the
division is well placed to continue to expand.
Croma Biometrics
Croma Biometrics trades as a division of Croma Security and
recorded turnover of GBP121k (2019: GBP101k). Our FastVein(TM)
biometrics technology provides significant future potential for the
Group. Currently deployed across the retail, education and
construction sectors it provides customers with quick, easy to use,
accurate and cost-effective data.
Group Financials
2020 2019
The Group financials can be summarised as
follows: GBP000's GBP000's
Revenue 32,321 34,599
Gross profit 5,516 6,490
Gross margin % 17.1% 18.8%
EBITDA 1,754 1,871
Other operating income 615 -
Impairment of goodwill (857) -
Operating profit 136 1,449
(Loss)/earnings per share (0.90p) 7.82p
Net assets 11,692 11,990
Cash generated from operations 3,044 462
Cash and cash equivalents 4,076 1,729
Dividend per share in relation to the year 1.95p 1.8p
Due to a reduction in higher margin project work and also the
impacts of the Covid-19 crisis (mainly to our Locksmith and
Security divisions), gross profit reduced by 15% to GBP5.5m (2019:
GBP6.5m). However, some divisions of the Group benefited from
various Government support initiatives with furlough and local
authority grant income of GBP0.6m included in other operating
income.
The reduction in trade debtors and other receivables by GBP1.7m
was the main contributory factor to the increase in cash generated
from operations and the boost in cash and equivalents to
GBP4.1m.
With cashflow remaining robust, the Group has not considered it
necessary to avail itself of the various Coronavirus loan support
initiatives available to it, including the Coronavirus Large
Business Interruption Loan Scheme.
Operating profits, earnings per share and net assets were all
impacted by an impairment charge of GBP0.9m against the goodwill of
our Security and Locksmiths divisions. This is discussed in more
detail in note 11 to the accounts. Without this adjustment, which
the Board consider to be a one-off, the Group would report earnings
per share of 4.8p.
With all divisions continuing to trade profitably and showing
positive cashflow, the Board is pleased to be able to maintain its
progressive dividend policy and recommend a final dividend to
shareholders of 1.2p per share (2019:1.1p).
.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 JUNE 2020
Continuing operations:
2020 2019
GBP000's GBP000's GBP000's GBP000's
Revenue 32,321 34,599
Cost of sales (26,805) (28,109)
--------- ---------
Gross profit 5,516 6,490
Administrative expenses (5,995) (5,041)
Other operating income 615 -
Operating profit 136 1,449
Analysed as:
Earnings before interest, tax, depreciation
amortisation 1,754 1,871
Impairment (857) -
Depreciation (570) (232)
Amortisation of intangible assets (191) (190)
Operating profit 136 1,449
Finance expenses (49) (2)
Profit before tax 87 1,447
Tax (221) (281)
(Loss)/profit for the year from continuing
operations (134) 1,166
Total comprehensive (loss)/ income for
the year attributable to owners of the
parent (134) 1,166
========= =========
Earnings per share
Basic and diluted (loss)/earnings per
share (pence) (0.90) 7.82
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEARED 30 JUNE 2020
Assets 2020 2019
GBP000's GBP000's
Non-current assets
Goodwill 6,454 7,311
Other Intangible assets 456 647
Property, plant and equipment 574 668
Right-of-use assets 1,120 -
8,604 8,626
Current assets
Inventories 764 825
Trade and other receivables 4,535 6,163
Cash and cash equivalents 4,076 1,729
9,375 8,717
Total assets 17,979 17,343
Liabilities
Non-current liabilities
Deferred tax (128) (158)
Lease liabilities (837) (23)
(965) (181)
Current liabilities
Trade and other payables (4,982) (5,126)
Borrowings and lease liabilities (340) (46)
(5,322) (5,172)
Total liabilities (6,287) (5,353)
Net assets 11,692 11,990
========= =========
Issued capital and reserves attributable to owners
of the parent
Share capital 794 794
Treasury shares (399) (399)
Share premium 6,133 6,133
Merger reserve 2,139 2,139
Capital redemption reserve 51 51
Retained earnings 2,974 3,272
Total equity 11,692 11,990
========= =========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2020
Capital
Share Redemption Treasury Share Merger Retained Share Total
Capital Reserve Shares Premium Reserve Earnings Options Equity
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
At 1 July
2018 794 51 (399) 6,133 2,139 2,347 12 11,077
Profit for
the year - - - - - 1,166 - 1,166
Dividends
paid - - - - - (253) - (253)
Transfer on
lapse of
options - - - - - 12 (12) -
At 30 June
2019 794 51 (399) 6,133 2,139 3,272 - 11,990
========= ============ ========= ========= ========= ========== ========= =========
Loss for
the
year - - - - - (134) - (134)
Dividends
paid - - - - - (164) - (164)
At 30 June
2020 794 51 (399) 6,133 2,139 2,974 - 11,692
========= ============ ========= ========= ========= ========== ========= =========
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2020
2020 2019
GBP000's GBP000's
Cash flows from operating activities
Profit before taxation 87 1,447
Depreciation amortisation and impairment 1,618 422
(Profit) on sale of property, plant and
equipment (2) -
Net changes in working capital 1,698 (973)
Financial expenses 49 2
Corporation tax paid (406) (436)
Net cash generated from operations 3,044 462
Cash flows from investing activities
Purchase of business costs net of cash acquired - (245)
Purchase of property, plant and equipment (121) (356)
Proceeds on disposal of property, plant
and equipment 11 12
Net cash used in investing activities (110) (589)
Cash flows from financing activities
Payments to reduce lease liabilities (408) (42)
Payments to reduce borrowings (15) (1)
Dividends paid (164) (253)
Interest paid - (2)
Net cash used in financing activities (587) (298)
Net increase/(decrease) in cash 2,347 (425)
Cash and cash equivalents at beginning
of period 1,729 2,154
Cash and cash equivalents at end of period 4,076 1,729
NOTES TO THE PRELIMINARY ANNOUCEMENT FOR THE YEARED 30 JUNE
2020
1. Basis of preparation
The Group financial statements have been prepared and approved
by the directors in accordance with International Financial
Reporting Standards (IFRSs), International Accounting Standards and
Interpretations (collectively "IFRS") issued by the International
Accounting Standards Board (IASB) as adopted by the European Union
("Adopted IFRS's").
During the year the Group adopted IFRS 16: Leases. This standard
had a material impact on financial statements as detailed in notes
2, 5 & 6 below.
While the financial information included in this preliminary
announcement has been computed in accordance with Adopted IFRSs,
this announcement does not itself contain sufficient information to
comply with Adopted IFRSs.
This preliminary announcement does not constitute statutory
accounts of the Group for the years ended 30 June 2019 or 30 June
2020.
The financial information has been extracted from the statutory
accounts of the Company for the year ended 30 June 2020. The
auditors reported on those accounts; their reports were unqualified
and did not include references to any matters to which the auditors
drew attention by way of emphasis without qualifying their report
and did not contain a statement under either Section 498 (2) or
Section 498 (3) of the Companies Act 2006.
The accounts for the year ended 30 June 2019 have been delivered
to the Registrar of Companies, whereas those for the year ended 30
June 2020 will be delivered to the Registrar of Companies following
the Company's Annual General Meeting.
The Annual Report will be posted to all shareholders who have
requested a copy on 23 October 2020 and will be available on
request from Unit 7 & 8 Fulcrum 4, Solent Way, Whiteley,
Hampshire PO15 7FT and on the Company website at
http://www.cssgplc.com/investors/. The Annual Report contains full
details of the principal accounting policies adopted in the
preparation of these financial statements.
2. Accounting policies
Except as described below, 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 2019.
Leased assets
IFRS 16 was adopted as of 1 July 2019 without restatement of
comparative figures.
A right of use asset and a lease liability has been recognised
for all leases except leases of low value assets, which are
considered to be those with a fair value below GBP4,500, and those
with a duration of 12 months or less. The right-of-use asset has
been measured at cost, which is made up of the initial measurement
of the lease liability, any initial direct costs incurred by the
group, an estimate of any costs to dismantle and remove the asset
at the end of the lease, and any lease payments made in advance of
the lease commencement date.
The Group will depreciate the right-of-use assets on a
straight-line basis from the lease commencement date to the earlier
end of the useful life of the right-of-use asset or the end of the
lease term. Where impairment indicators exist, the right of use
asset will be assessed for impairment.
The lease liabilities are measured at the present value of the
lease payments due to the lessor over the lease term, discounted
using the interest rate implicit in the lease if that rate is
readily available or the Group's incremental borrowing rate.
After initial measurement, any payments made will reduce the
liability and the interest accrued will increase it. Any
reassessment or modification will lead to a remeasurement of the
liability. In such case, the corresponding adjustment will be
reflected in the right-of-use asset, or profit and loss if the
right-of-use asset is already reduced to zero.
On the statement of financial position, right-of-use assets have
been disclosed separately from property, plant and equipment.
Government grants
Grants are accounted for under the accruals model under IAS20.
Grants of a revenue nature are recognised in the Consolidated
Statement of Comprehensive Income in the same period as the related
expenditure.
Grants awarded to provide financial support or assistance rather
than relating to specific expenditure are recognised in the
Consolidated Statement of Comprehensive Income in the period which
they become receivable.
Grant income has been recognised as other operating income in
the Consolidated Statement of Comprehensive Income.
3. Segmental reporting
Croma Croma Croma Central Total
Vigilant Security Locksmiths
(Guarding) Systems (Locks)
(Electronic)
2020 Business Segments GBP000's GBP000's GBP000's GBP000's GBP000's
Segment revenues 26,968 2,459 2,894 - 32,321
Gross profit 3,335 996 1,184 - 5,515
Administrative expenses (2,204) (688) (770) (716) (4,378)
Amortisation - (62) (129) - (191)
Depreciation (231) (88) (251) - (570)
Profit/(loss) on disposal 3 - (1) - 2
Other operating income 165 126 324 - 615
Operating profit/(loss)
before impairment 1,068 284 357 (716) 993
Impairment of goodwill - (433) (424) - (857)
Operating profit/(loss)
after impairment 1,068 (149) (67) (716) 136
------------ -------------- ------------ --------- ---------
Segment assets 7,201 4,459 4,950 1,369 17,979
Segment (liabilities) (3,919) (856) (1,357) (155) (6,287)
Segment net assets 3,282 3,603 3,593 1,214 11,692
------------ -------------- ------------ --------- ---------
Additions to non-current
assets 82 30 11 - 123
------------ -------------- ------------ --------- ---------
2019 Business Segments GBP000's GBP000's GBP000's GBP000's GBP000's
Segment revenues 28,477 2,702 3,420 - 34,599
Gross profit 3,873 1,113 1,511 (7) 6,490
Administrative expenses (2,392) (629) (827) (771) (4,619)
Amortisation - (61) (129) - (190)
Depreciation (71) (80) (81) - (232)
(Loss)/profit on disposal (4) - 4 - -
Segment operating profit/(loss) 1,406 343 478 (778) 1,449
------------ -------------- ------------ --------- ---------
Segment assets 8,259 4,600 5,113 (629) 17,343
Segment (liabilities) (4,168) (802) (1,126) 743 (5,353)
Segment net assets 4,091 3,798 3,987 114 11,990
------------ -------------- ------------ --------- ---------
Additions to non-current
assets 112 - 424 - 536
------------ -------------- ------------ --------- ---------
4. Goodwill
Cost GBP000's
At 1 July 2019 & 30 June 2020 7,311
Accumulated impairment losses
At 1 July 2019 -
Arising in the year 857
At 30 June 2020 857
Net book value
At 1 July 2019 7,311
At 30 June 2020 6,454
Impairment testing
During the year, goodwill was reviewed for impairment in accordance
with IAS 36 "Impairment of Assets". An impairment charge of
GBP857k (2019: GBPNil) occurred as a result of this review.
2020 2019
The carrying value of goodwill by each CGU
is as follows: GBP000's GBP000's
Croma Security Systems 2,906 3,339
Croma Locksmiths 2,152 2,576
Croma Vigilant 1,396 1,396
6,454 7,311
5. Right-of-use assets
Motor
Property vehicles Total
GBP000's GBP000's GBP000's
Cost
At 1 July 2019 - - -
Adjusted on adoption of new accounting
standards 1,282 154 1,436
At 1 July 2019 (amended) 1,282 154 1,436
Additions - 46 46
At 30 June 2020 1,282 200 1,482
Accumulated depreciation
At 1 July 2019 - - -
Charge for the year 283 79 362
At 30 June 2020 283 79 362
Carrying amount
At 30 June 2020 999 121 1,120
At 30 June 2019 - - -
6. Leases
As indicated above, the Group has adopted IFRS 16 Leases
retrospectively from 1 July 2019 but has not restated comparatives
for the 2019 reporting period, as permitted under the specific
transition provisions in the standard. The reclassifications and
the adjustments arising from the new leasing rules are therefore
recognised in the opening balance sheet on 1 July 2019. The new
accounting policies are disclosed in note 1. Relevant practical
expedients have been used in applying IFRS 16 as noted below.
The Group has lease contracts for property, vehicles and other
assets which have lease terms varying between 1 and 10 years. The
Group also has certain leases with lease terms of 12 months or less
and leases of office equipment with low value; these leases have
been expensed in accordance with the practical expedients permitted
under IFRS 16.
Contracts may contain both lease and non- lease components. The
Group allocates consideration between lease and non-lease
components based on the price a lessor, or similar supplier, would
charge to purchase that component separately.
The lease term begins at the commencement date and includes any
rent-free periods provided by the lessor. Lease terms vary between
contracts and depend on the individual facts and circumstances of
the contract.
Lease liabilities are measured at the present value of the
remaining lease payments, discounted using the Group's incremental
borrowing rate as at 1 July 2019. The Group's incremental borrowing
rate is the rate at which a similar borrowing could be obtained
from an independent creditor under comparable terms and conditions.
The weighted average rate applied was 3.5%. The Group has taken
advantage of the practical expedient permitted under IFRS 16 to
apply a single discount rate to a portfolio of leases with similar
characteristics.
A reconciliation of the changes to reported operating lease
commitments for 2019 is as follows:
GBP000's
Operating lease commitments disclosed at 30 June
2019 1,359
New arrangements entered into on 1 July 2019 245
Less: Low value leases recognised as an expense (3)
Discounted using the incremental borrowing rate
at 1 July 2019 (165)
Lease liability and right of use assets recognised
at 1 July 2019 1,436
Minimum lease payments fall due as follows:
Gross obligations repayable:
Within one year 360
Between one and five years 598
Over five years 335
Net obligations repayable:
Within one year 325
Between one and five years 525
Over five years 312
Amounts recognised in the consolidated statement
of comprehensive income:
Interest on lease liabilities 49
Amounts recognised in the consolidated statement
of cashflows:
Payments to reduce lease liabilities 408
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