TIDMCSSG
RNS Number : 9300Q
Croma Security Solutions Group PLC
25 February 2019
25 Feb 2019
Croma Security Solutions Group Plc
("CSSG", "Croma", "the "Company" or the "Group")
Interim Results for the Six Months to 31 December 2018
Continued Demand led by UK wide Security Concerns
Croma Security Solutions Group plc the AIM listed total security
services provider announces its unaudited interim results for the
six months to 31 December 2018.
Trading maintained at record levels
GBPm 2018 2017 2016
Revenue 18.0 17.3 11.2
EBITDA 1.20 1.20 0.44
EPS 5.21p 4.92p 1.09p
Dividend 0.7p 0.6p 0.5p
-- Reflecting ongoing UK wide security concerns, demand for
Croma's innovative security solutions remains strong
-- H1 Revenues include a mix of longer term contracts and shorter term projects
-- Group is ungeared with cash balances of GBP1.7m (2017: GBP1.4m)
-- 17% increase in interim dividend
Innovative Solutions for the UK Homeland Security Market
-- Strategic focus on becoming the British security brand
-- UK Guarding market continuing to move toward premium services as offered by Croma
-- Ex-military ethos remains core part of Group culture and key
to new contract wins and retention
-- Commenced the development of a national network of security centres
Sebastian Morley, Chairman of CSSG, said:
"Demand for our services in our last financial year was at a
record high and it is pleasing that this demand has continued into
the first six months of the current financial year. There is a
mixture of contracted and project work, the latter making it harder
to predict future revenue levels. However, what is clear is that
there has been a step change in demand for CSSG's premium services
and as a business we are focused on taking advantage of this
opportunity. Our aim is to become the British security brand and as
part of that objective we are looking to establish a national
network of security centres from which we will be able to sell all
our services under one roof."
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
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
Novella Tel: +44 (0)203 151 7008
Tim Robertson
Toby Andrews
Chairman's Statement
Introduction
I am pleased to report the financial results for the first six
months of the current financial year which show the business
continuing the momentum begun in the prior year. There has been a
step change in demand for our premium services which has been
driven by the requirements from both large commercial enterprises
and government on both a local and a national level.
The profitability of the Group has increased more than threefold
in the last two years and we are focused on ensuring the
pre-eminence of its long-term position in the UK Security
market.
Strategy for Growth within UK Security Market
Reflecting the real and perceived increases in risk across the
UK, security has become a higher priority for both public and
private institutions which has substantially increased demand for
Croma's innovative client solutions. As a consequence, the Board
has been working on the Group's strategy aimed at maximising this
opportunity and further developing Croma's market position within
the UK security market through:
-- 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 of the Group's services are sold; and
-- becoming the British security brand.
The quality of the UK's guarding industry is variable. In the
main, guarding is often performed by underpaid, poorly dressed
individuals with limited training, a trend being exacerbated
currently by sector consolidation. Whereas, Croma Vigilant with its
ex-military ethos focuses on providing a premium guarding service
performed by well trained, well-motivated individuals directed by
ex-military management teams. As security concerns grow generally,
demand for these premium services increases and the Group is
developing its offering to combine the roles of guarding with front
of house services creating a joined-up solution with the potential
to transform the way manned security services are delivered in
offices, hotels and public institutions.
The key strategic change is the development of a national
network of Security Centres. The Board believes there is a market
opportunity to establish a national chain of modern security
centres offering a full range of security solutions from CCTV,
intruder alarm and advanced security systems as well as high
security locks. Last year the Group began the conversion of its
eight retail outlets into modern Security Centres which has shown
that the format works, enabling the stores to sell the full range
of the Group's security capabilities to both domestic and
commercial customers.
Croma Vigilant
Croma Vigilant is the largest part of our business providing
manned guarding for assets and individuals. It has had another very
successful period, maintaining sales at similar record levels to
the prior year. Providing high-grade security personnel who are
typically ex-military is a significant factor in helping to ensure
that Vigilant is able to deliver a premium service. The division
now employs over 1,200 security personnel throughout the UK. In
London alone, Croma is responsible for guarding assets worth in
excess of GBP3 billion.
During the period under review, the division won a mix of new
long-term contracts and one-off project work. There is slightly
more contracted work than the prior year which is aiding visibility
on the Group's future financial performance.
Croma Systems
Croma Systems, provider of a range of innovative security
technology services including CCTV, Intruder Alarms, FastVein
(Biometrics) and high security locks, delivered a good performance
matching last year's record performance. This division will be
responsible for the development of the national network of security
centres, thereby enabling the Group to sell all its security
solutions under one roof throughout the UK.
FastVein, the Group's biometric high-speed human identifier, is
part of the forefront of modern security technology. While still
small in terms of contribution to the Group revenues, the potential
for this technology is significant. There is a good pipeline of new
contracts for this technology which underpin the Board's confidence
in this product.
Financial Review
Revenue increased by 4% for the 6 months to 31 December 2018 to
GBP18m ( 2017: GBP17.3m). This reflects good customer retention in
Croma Vigilant and an improvement in our Locksmiths division which
continues to see revenues supported by its contract with a major UK
water utility provider and also reflects the full benefits of a
restructuring in the period.
During this period the Group completed the purchase of the trade
and assets of a locksmiths and security business in Ascot for
GBP80k. This acquisition will help improve our geographical
coverage and is part of our strategy for the development of
national security centres.
The Group remains free from borrowings with cash balances at 31
December 2018 of GBP1.7m ( 2017: GBP1.4m). Towards the end of 2018
we have seen some delay in payment from one of our major customers
due to a change in their IT systems. This has impacted our cashflow
by approximately GBP700k, however the effects of this are expected
to reverse in the second half of the year.
Dividend
The Board is pleased to declare a 16.7% increased interim
dividend of 0.7p (2017: 0.6p) per share, to be paid on 8 April 2019
to shareholders with an ex-dividend date of 21 March 2019 and an
associated record date of 22 March 2019.
Outlook
We have begun the second half of the financial year well,
continuing the positive trading momentum. As a Group we are focused
on implementing our strategic plan aimed at becoming the British
security brand.
Sebastian Morley
Chairman
25 February 2019
CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR 6 MONTHSED 31 DECEMBER 2018
6 months 6 months Year
ended ended ended
31-Dec-18 31-Dec-17 30-Jun-18
unaudited unaudited audited
Notes GBP000s GBP000s GBP000s
Revenue 17,981 17,269 35,119
Cost of sales (14,669) (14,066) (27,970)
---------- ----------
Gross profit 3,312 3,203 7,149
Administrative expenses (2,287) (2,187) (5,136)
Operating profit 1,025 1,016 2,013
Analysed as:
Earnings before interest, tax, depreciation,
and amortisation 1,223 1,197 2,500
Depreciation (102) (60) (161)
Amortisation of intangible assets (96) (121) (326)
---------- ---------- ----------
Operating profit 1,025 1,016 2,013
Finance costs (9) (18) (38)
Profit before tax 1,016 998 1,975
Tax (188) (181) (359)
Profit for the year from continuing operations 828 817 1,616
Profit and total comprehensive income
for the period attributable to owners
of the parent 828 817 1,616
Earnings per share 3
Basic and fully diluted earnings per
share (pence)
- From continuing operations 5.21 4.92 9.89
CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2018
31-Dec-18 31-Dec-17 30-Jun-18
unaudited unaudited audited
GBP000s GBP000s GBP000s
Assets
Non-current assets
Goodwill 7,233 7,213 7,213
Other Intangible assets 739 1,040 835
Property, plant and equipment 535 474 476
8,507 8,727 8,524
Current assets
Inventories 753 638 668
Trade and other receivables 7,276 6,277 6,077
Cash and cash equivalents 1,712 1,374 2,154
9,741 8,289 8,899
Total assets 18,248 17,016 17,423
Liabilities
Non-current liabilities
Deferred tax (182) (220) (197)
Trade and other payables over
1 year - (21) (12)
(182) (241) (209)
Current liabilities
Trade and other payables (6,194) (6,006) (6,071)
Borrowings - - (66)
(6,194) (6,006) (6,137)
Total liabilities (6,376) (6,247) (6,346)
Net assets 11,872 10,769 11,077
========== ========== ==========
Issued capital and reserves attributable
to owners of the parent
Share capital 794 794 794
Treasury shares (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 3,142 1,640 2,347
Share options 12 12 12
Total equity 11,872 10,769 11,077
========== ========== ==========
CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR 6 MONTHSED 31 DECEMBER 2018
6 months 6 months Year
ended ended ended
31-Dec-18 31-Dec-17 30-Jun-18
unaudited unaudited audited
Notes GBP000s GBP000s GBP000s
Cash flows from operating activities
Profit before taxation 1,016 998 1,975
Depreciation, and amortisation 198 181 487
Net changes in working capital 4 (1,262) 167 263
Financial expenses 9 18 38
Taxes paid - (48) (74)
Net cash (used)/generated from operations (39) 1,316 2,689
Cash flows from investing activities
Purchase of business (80) - -
Purchase of property, plant and
equipment (107) (114) (264)
Proceeds on disposal of property, plant
and equipment - - 47
Net cash used in investing activities (187) (114) (217)
Cash flows from financing activities
Purchase of treasury shares - - (406)
Buy back and cancellation of shares - (354) (354)
Sale of treasury shares - - 5
Hire purchase repayments (25) (31) (52)
Repayments on borrowings (33) (195) (154)
Dividends paid (149) - (89)
Interest paid (9) (18) (38)
Net cash used in financing activities (216) (598) (1,088)
Net (decrease)/increase in cash
and cash equivalents (442) 604 1,384
Cash and cash equivalents at beginning
of period 2,154 770 770
Cash and cash equivalents at end
of the period 1,712 1,374 2,154
CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Capital
Share Treasury Share Merger Redemption Retained Share Total
Capital Shares Premium Reserve Reserve Earnings Options Equity
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000's GBP000s
Balance At 1 July 2018
(as previously reported) 794 (399) 6,133 2,139 51 2,347 12 11,077
Effect of new standards - - - - - 116 - 116
Balance At 1 July 2018
(as restated) 794 (399) 6,133 2,139 51 2,463 12 11,193
Profit for the period - - - - - 828 - 828
Dividends paid - - - - - (149) - (149)
At 31 December 2018 794 (399) 6,133 2,139 51 3,142 12 11,872
======== ========= ======== ======== =========== ========= ========= ========
Balance at 1 July 2017 845 - 6,133 2,139 - 1,176 12 10,305
Shares redeemed (51) - - - 51 (353) - (353)
Profit for the period - - - - - 817 - 817
Balance at 31 December
2017 794 - 6,133 2,139 51 1,640 12 10,769
======== ========= ======== ======== =========== ========= ========= ========
Balance at 1 July 2017 845 - 6,133 2,139 - 1,176 12 10,305
Shares redeemed (51) - - - 51 (354) - (354)
Treasury shares acquired - (406) - - - - - (406)
Treasury shares issued - 7 - - - (2) - 5
Profit for the year - - - - - 1,616 - 1,616
Dividends paid - - - - - (89) - (89)
Balance at 30 June 2018 794 (399) 6,133 2,139 51 2,347 12 11,077
======== ========= ======== ======== =========== ========= ========= ========
NOTES TO THE INTERIM FINANCIAL STATEMENTS FOR 6 MONTHS TO 31
DECEMBER 2018
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 2019. 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 2018 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
2018 and 31 December 2017 is unaudited.
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 2018.
The following standards have become applicable for accounting
periods commencing on or after 1 July 2018 and the appropriate
adjustments have been considered:
- IFRS 9 - Financial Instruments
- IFRS 15 - Revenue from Contracts with Customers
The changes in accounting policies are also expected to be
reflected in the Group's consolidated financial statements as at
and for the year ending 30 June 2019. A number of other new and
amended standards and interpretations are effective from 1 July
2018 but they do not have a material effect on the Group's
financial statements.
(a) IFRS 9 - Financial Instruments
IFRS 9 requires the use of an expected credit loss model to
calculate impairment losses rather than an incurred loss model.
Therefore, it is not necessary for a credit event to have occurred
before credit losses are recognised. The new impairment model
applies to the all the Group's financial assets.
No changes to the impairment provisions were made on transition
to IFRS 9 as the effects were felt to be immaterial. In assessing
impairment requirements on financial assets, the Group now
considers the historic loss rates, which have been minimal, in
conjunction with expected future losses and credit losses as a
result of potential defaults. This will, as mandated by IFRS 9,
continue to be reassessed as and when further information becomes
available or when conditions change.
(b) IFRS 15 - Revenue from Contracts with Customers
The adoption of IFRS 15 has mainly affected the accounting for
revenue relating to maintenance contracts. Under IFRS 15, revenue
for the provision of an annual service of a security installation
is recognised in the period that the service is completed.
Previously under IAS 18, such revenue was recognised in equal
monthly instalments over the period of the contract (typically 12
months) to match the benefits to the customer. Any income not
recognised in the period of payment is held in deferred income (now
known as contract income).
Under the transition method chosen, comparative information is
not restated. The effect of adopting the standards in respect of
prior years is recognised as an adjustment to opening equity as at
1 July 2018, which totals GBP116k, representing less income
deferred (net of tax) than under the method previously adopted
under IAS 18.
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-18 31-Dec-17 30-Jun-18
Numerator
Profit for the year on continuing operations
and used in basic EPS (GBP000s) 828 817 1,616
Denominator
Number of shares (thousands)
Weighted average number of shares
used in basic EPS 15,899 16,591 16,339
Weighted average number of shares
used in diluted EPS 15,900 16,604 16,340
4. Note supporting the cash flow statement
6 months 6 months Year
ended ended ended
31-Dec-18 31-Dec-17 30-Jun-18
unaudited unaudited audited
GBP000s GBP000s GBP000s
Net changes in working capital
(Increase)/Decrease in inventories (45) 72 42
Increase in trade and other receivables (1,279) (2,473) (2,273)
Increase in trade and other payables 62 2,568 2,494
(1,262) 167 263
5. Dividends
The Board approved an interim dividend for the year of 0.7 pence
per share (2017: 0.6p).
6. Financial Information
The Board of Directors approved this interim report on 25
February 2019.
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
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR VLLFLKLFEBBL
(END) Dow Jones Newswires
February 25, 2019 02:00 ET (07:00 GMT)
Croma Security Solutions (LSE:CSSG)
Historical Stock Chart
From Apr 2024 to May 2024
Croma Security Solutions (LSE:CSSG)
Historical Stock Chart
From May 2023 to May 2024