TIDMCSSG
RNS Number : 5739Q
Croma Security Solutions Group PLC
01 March 2021
1 March 2021
Croma Security Solutions Group Plc
("CSSG", "Croma", "the "Company" or the "Group")
Interim Results
A Stable Performance with Strong Cash Generation
Croma Security Solutions Group plc the AIM listed total security
services provider announces its unaudited interim results for the
six months to 31 December 2020.
Sebastian Morley, Chairman of CSSG, said:
"Having established new work practices for our security teams to
operate safely during the first lockdown, we were confident,
entering the new financial year in July 2020, of our ability to
continue to operate safely, successfully and profitably. Naturally,
the retail side of our business was the area most impacted by the
ongoing pandemic which masked an increase in demand for our
services to guard physical assets. This translated into a stable H1
trading performance with revenues slightly lower by just 6% to
GBP16.36 million. Overall, the business is well placed being
profitable, and having a high cash balance of GBP3.9 million which
could support opportunistic acquisitions arising in the future out
of the current crisis."
A solid, profitable performance
-- Demand for Croma's innovative security solutions remains strong
-- Revenues stable at GBP16.36m (H1 2019: GBP17.36m)
-- Generating EBITDA of GBP0.86m (H1 2019: GBP1.1m)
-- Other than lease liabilities, the Group remains ungeared with
cash balances up significantly to GBP3.9m (31 December 2019:
GBP2.3m)
-- No interim dividend proposed, as a prudent measure, and
instead waiting to complete the financial year
Increased demand for guarding of physical assets and recovery
post lockdown 1
-- When measured against the six months ended 30 June 2020,
revenues from manned guarding increased by 6%, with increased
demand for temporarily closed premises
-- Our Systems and Locksmiths businesses, which were impacted
more heavily by the first lockdown, also posted impressive sales
revenue gains, up by 31% vs six months ended 30 June 2020
-- Croma PROception the ground-breaking front of house business, continues to win new mandates
-- Strategy to establish a national chain of security stores remains unchanged
Outlook
-- Positive trading patterns have continued into the second half of the year
-- Well placed for a satisfactory result for the year
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
Chris Savage
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
Introduction
I am pleased to report Croma's interim results for the six
months to 31 December 2020 which saw the Group generate revenues of
GBP16.36 million and EBITDA of GBP0.86 million. Given the backdrop
of disrupted trading conditions this was another good performance
in a challenging period for all operating divisions. Our 10 retail
stores were either closed or operating under restricted hours
during lockdown periods, which together with lower consumer
mobility meant retail sales were reduced. Conversely, demand for
our security services particularly for the safeguarding of physical
assets such as temporarily closed premises, has increased. The
events of the past 12 months have not changed the positive
fundamentals of our businesses and we remain focused on
establishing Croma as the British security brand.
Group strategy
It may be that some of the consequences of the pandemic will
support the Group in its strategic objectives aimed at:
-- 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.
The UK security market is made up of a large number of smaller
enterprises which may have come under financial pressure due to the
pandemic. This could accelerate the Group's ability to act as a
consolidator in the sector. There has already been a substantial
increase in the number of companies approaching the Group seeking
to open discussions and this has added to an existing pipeline of
opportunities under consideration. That said, the Board will always
take a prudent approach to expansion, carefully balancing all
future investment against possible risks.
Underlying market trends continue to be supportive of the
Group's strategy. There remains a high focus amongst private and
publicly funded enterprises to ensure the safety of buildings and
people against real and perceived increases in security risk across
the UK. This is translating into higher demand for the Group's
premium services.
Croma has always operated with 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.
This combined with the innovations in security Croma is introducing
such as PROception is positioning the Group well to increase its
share of the growing premium security market.
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 who have
collectively performed extremely well continuing to guard people
and assets as well as incorporating a wide range of new safety
measures to defend against the transmission of Covid-19. We believe
by continuing to maintain our levels of premium services while
adapting to significantly increased personnel absences due again to
the pandemic, reflects very positively on the people and the
organisation of this division.
Alongside, adapting to operating under the restrictions imposed
by the pandemic, Croma Vigilant has continued to successfully
pursue new business opportunities. New contracts have been secured
to protect temporarily vacant premises and a significant new
contract has been secured by PROception, the Group's innovative
front of house security service which is generating significant
commercial interest.
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, given the restricted circumstances.
Currently, this division is operating through 10 security centres
some of which were closed or operating reduced hours during
lockdown periods. The security centres are all operating under the
Croma brand and are marketing, under one roof, the entire range of
the Group's services.
Financial Review
Revenue decreased by 5.8% for the six months to 31 December 2020
to GBP16.36m (H1 2019: GBP17.36m).
Cash balances at 31 December 2020 are GBP3.9m (30 December 2019:
GBP2.3m).
Other than lease and short-term trading liabilities, the Group
remains free from borrowings.
Dividend
Reflecting the current environment and the continued
uncertainties in connection to the global pandemic, the Board has
decided not to pay an interim dividend and will instead decide on
the level of the final dividend payment for this financial year on
completion of the 12-month period. The Board views this as a
prudent approach to managing against any further delay to the
expected recovery from the epidemic.
Outlook
Our belief is that the Group is well placed and will emerge from
the current pandemic in a good position. The fundamentals of our
businesses have been unaffected by Covid-19 and only sales from the
retail side have naturally reduced given temporary store closures
and reduced consumer mobility. Other than lease liabilities, the
Group remains ungeared with significant cash assets. These factors,
together with some interesting opportunities which have emerged
because of the pandemic, combine to give the Board confidence in
the outlook for the Group.
Sebastian Morley
Chairman
1 March 2021
CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR 6 MONTHSED 31 DECEMBER 2020
6 months 6 months Year
ended ended ended
31-Dec-20 31-Dec-19 30-Jun-20
unaudited unaudited audited
Notes GBP000s GBP000s GBP000s
Revenue 16,362 17,357 32,321
Cost of sales (13,560) (14,087) (26,805)
---------- ----------
Gross profit 2,802 3,270 5,516
Administrative expenses (2,676) (2,551) (5,995)
Other operating income 377 - 615
---------- ---------- ----------
Operating profit 503 719 136
Analysed as:
Earnings before interest, tax, depreciation,
impairment, and amortisation of
intangible assets 863 1,105 1,754
Impairment - - (857)
Amortisation (83) (100) (191)
Depreciation (277) (286) (570)
Operating profit 503 719 136
Finance costs (24) (29) (49)
Profit before tax 479 690 87
Tax (91) (123) (221)
Profit/(loss) for the year from continuing
operations 388 567 (134)
Profit and total comprehensive income
for the period attributable to owners
of the parent 388 567 (134)
Earnings per share 3
Basic and diluted earnings/(loss)
per share (pence) from continuing
operations 2.61 3.80 -0.9
CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2020
31-Dec-20 31-Dec-19 30-Jun-20
unaudited unaudited audited
GBP000s GBP000s GBP000s
Assets
Non-current assets
Goodwill 6,454 7,311 6,454
Other Intangible assets 373 546 456
Property, plant and equipment 535 621 574
Right-of-use assets 943 1,290 1,120
8,305 9,767 8,604
Current assets
Inventories 620 865 764
Trade and other receivables 5,440 7,782 4,535
Cash and cash equivalents 3,879 2,308 4,076
9,939 10,956 9,375
Total assets 18,244 20,723 17,979
Liabilities
Non-current liabilities
Deferred tax (116) (143) (128)
Lease liabilities (685) (930) (837)
(801) (1,073) (965)
Current liabilities
Trade and other payables (5,353) (6,853) (4,982)
Borrowings and Lease liabilities (301) (404) (340)
(5,654) (7,257) (5,322)
Total liabilities (6,455) (8,330) (6,287)
Net assets 11,789 12,393 11,692
========== ========== ==========
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 3,071 3,675 2,974
Total equity 11,789 12,393 11,692
========== ========== ==========
CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR 6 MONTHSED 31 DECEMBER 2020
6 months 6 months Year
ended ended ended
31-Dec-20 31-Dec-19 30-Jun-20
unaudited unaudited audited
Notes GBP000s GBP000s GBP000s
Cash flows from operating activities
Profit before taxation 479 690 87
Depreciation, amortisation and impairment 360 386 1,618
(Profit) on sale of property, plant
and equipment (4) - (2)
Net changes in working capital 4 (420) (69) 1,698
Financial expenses 24 29 49
Corporation tax paid (72) (17) (406)
Net cash (used)/generated from operations 367 1,019 3,044
Cash flows from investing activities
Purchase of property, plant and equipment (65) (56) (121)
Proceeds on disposal of property, plant and
equipment 8 - 11
Net cash used in investing activities (57) (56) (110)
Cash flows from financing activities
Payments to reduce lease liabilities (213) (207) (408)
Increase/(reduction) in borrowings 3 (8) (15)
Dividends paid (291) (164) (164)
Interest paid (6) (5) -
Net cash used in financing activities (507) (384) (587)
Net (decrease)/increase in cash and
cash equivalents (197) 579 2,347
Cash and cash equivalents at beginning
of period 4,076 1,729 1,729
Cash and cash equivalents at end of
the period 3,879 2,308 4,076
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 2020 794 (399) 6,133 2,139 51 2,974 11,692
Profit for the period - - - - - 388 388
Dividends paid - - - - - (291) (291)
At 31 December 2020 794 (399) 6,133 2,139 51 3,071 11,789
========= ========= ========= ========= ============ ========== ========
Balance at 1 July 2019 794 (399) 6,133 2,139 51 3,272 11,990
Profit for the period - - - - - 567 567
Dividends paid - - - - - (164) (164)
Balance at 31 December
2019 794 (399) 6,133 2,139 51 3,675 12,393
========= ========= ========= ========= ============ ========== ========
Balance at 1 July 2019 794 (399) 6,133 2,139 51 3,272 11,990
Loss for the year - - - - - (134) (134)
Dividends paid - - - - - (164) (164)
Balance at 30 June 2020 794 (399) 6,133 2,139 51 2,974 11,692
========= ========= ========= ========= ============ ========== ========
NOTES TO THE INTERIM FINANCIAL STATEMENTS FOR 6 MONTHS TO 31
DECEMBER 2020
1. Basis of preparation
The interim financial information in this report has been
prepared using accounting policies consistent with IFRS as adopted
by the European Union. 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 European
Commission. The financial information has been prepared on the
basis of IFRS that the Directors expect to be adopted by the
European Union and applicable as at 30 June 2020. 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 2020 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
2020 and 31 December 2019 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
2020.
A number of other new and amended standards and interpretations
are effective from 1 January 2020 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-20 31-Dec-19 30-Jun-20
Numerator
Profit/(loss) for the year on continuing operations
and used in EPS (GBP000s) 389 567 (134)
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-20 31-Dec-19 30-Jun-20
unaudited unaudited audited
GBP000s GBP000s GBP000s
Net changes in working capital
(Increase)/decrease in inventories 144 (41) 61
(Increase)/decrease in trade and other
receivables (905) (1,613) 1,628
Increase in trade and other payables 341 1,585 9
(420) (69) 1,698
5. Financial Information
The Board of Directors approved this interim report 1 March
2021.
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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