TIDMCMG
RNS Number : 4356Y
Croma Group PLC
01 March 2012
Croma Group Plc
1 March 2012
Interim results for the six months to 31 December 2011
Croma Group PLC ("Croma", the "Group" or the "Company") the AIM
listed asset protection specialist, announces its interim results
for the six months to 31 December 2011.
Highlights
-- Revenues increased to GBP4.32M (2010 - GBP4.28M)
-- Gross profits rises 2.5% to GBP818K (2010: GBP798K)
-- Net trading profit GBP29,116 (2010: profit GBP36,839)
-- Award of Supply Partner of the Year from GVA West End Management
-- ISO9001 accredited in addition to SIA and Investors in People Bronze
Post Period End Summary
-- Significant contract win delivering over GBP1.15 million
further revenue per year and further consolidating the Group's
position in London and the South East
-- Proposed acquisition of CSS Group Companies and conditional placing of GBP5 million gross
Extracts of the Interim Results appear below with a full version
available on the Company's website www.cromagroup.co.uk
Further Information:
Croma Group PLC:
Sebastian Morley, CEO Tel: +44 7768 006 909
Nplus1 Brewin LLP (NOMAD):
Sandy Fraser Tel: +44 131 529 0385
Robert Beenstock Tel: +44 20 3201 3710
Chairman's Statement
I am pleased to be able to report the financial results for the
six months to 31 December 2011 which demonstrate improvement in
revenue and gross profit for the first half despite the continuing
effect of reduced spending nationally.
During the six months Group turnover was GBP4.32M (2010:
GBP4.28M), and we continue to win attractive and prestigious
contracts in the face of stiff competition. We decided to end a
contract in the period as the terms no longer met our strict margin
criteria, but I can report that since the period end we have won
business valued in excess of this contract, including a larger
contract at an improved margin, commencing in April 2012. During
the period gross margin was maintained at 19% (2010: 19%) and the
management team is focused on increasing profitability by
capitalising on our respected, premium security offering and
actively pursuing higher margin business.
The Company has repaid GBP600K of its existing loan notes during
the period, with further loans due to be repaid before the end of
2012 as detailed in note 1 below. We continue to enjoy the full
support of the loan note holders.
The Group's activities in the security industry cover many
aspects from manned guarding to biometric access controls. We
continue to win significant contracts in manned guarding in our
chosen areas and we were awarded Supply Partner of the Year by GVA
West End Management. This, together with the work undertaken in
achieving ISO9001 accreditation, has led to a further award of a
contract worth over GBP1 million per annum in the West End of
London which starts in April 2012.
The company also announces today a GBP5 million placing and the
acquisition of CSS Total Security Limited, CSS Locksmiths Limited
and Alarm Bell Company Limited. The completion of this transaction,
which is conditional on shareholder approval, is the culmination of
a significant effort by the Board over the past year as Croma
continues to develop a total security services offering, building
on the joint venture announced on 6 April 2011. I believe that this
transaction will give the enlarged group a unique position within
the security market and will enable us to deliver sustained growth
to shareholders.
Recent significant contract awards and this transformational
acquisition together underpin the prospects for the Group and I
anticipate the Group will be able to report further progress in the
second half of the year to 30 June 2012.
I will be standing down as Chairman from the date of our General
Meeting after four years in the position and I am confident that my
successor, Sebastian Morley, will lead the Group effectively
through its next stages of development. I would like to thank the
Directors and staff of the Group for their continued efforts to
deliver results in a tough economic climate.
Nicholas Hewson
Non-executive Chairman
29 February 2012
CROMA GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 DECEMBER 2011
6 months
6 months ended ended Year Ended
31 December 31 December 30 June
2011 2010 2011
unaudited unaudited
& unreviewed & unreviewed
Notes GBP GBP GBP
Revenue 1 4,321,980 4,286,176 8,457,665
Cost of sales (3,503,701) (3,488,600) (6,840,379)
Gross profit 818,279 797,576 1,617,286
Administrative expenses (735,850) (680,551) (1,295,426)
Operating profit 82,429 117,025 321,860
Finance expense costs (53,313) (80,186) (179,358)
Profit/(loss) before tax 29,116 36,839 142,502
Tax - - (26,031)
--------------- -------------- ------------
Profit/(loss) for the year
from continuing operations 29,116 36,839 116,471
(Loss)/profit from discontinued
operations - 9,101 (742,672)
(Loss)/profit and total comprehensive
(loss)/profit for the year
attributable to owners of
the parent 29,116 45,940 (626,201)
=============== ============== ============
Earnings per share 3
Basic earnings per share
(pence)
- Earnings from continuing
operations 0.00 0.02 0.06
- (Loss)/earnings from discontinued
operations 0.00 0.00 (0.39)
- Total 0.00 0.02 (0.33)
--------------- -------------- ------------
Diluted earnings per share
(pence)
- Earnings from continuing
operations 0.00 0.02 0.08
- (Loss)/earnings from discontinued
operations 0.00 0.00 (0.39)
- Total 0.00 0.02 (0.31)
--------------- -------------- ------------
CROMA GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2011
Six months ended Six months Year ended 30th
31st December ended 31st June 2011
2011 December 2010
unaudited & unaudited &
unreviewed unreviewed
Assets Notes GBP GBP GBP GBP GBP GBP
Non-current assets
Property, plant
and equipment 191,268 203,315 182,945
Investments 1,396,390 2,148,650 1,396,390
------------ ------------ ------------
1,587,658 2,351,965 1,579,335
Current assets
Inventories 54,264
Trade and other
receivables 2,801,456 1,565,276 2,231,912
Cash and cash
equivalents 42,607 2,898,327 100,509 1,665,785 597,119 2,829,031
------------ ---------- ------------
Discontinued Operation - 970,319 -
Total assets 4,485,985 4,988,069 4,408,366
------------ ------------ ------------
Liabilities
Non-current liabilities
Convertible loan
notes (287,718) (400,128) (398,371)
Deferred tax (7,223) - (7,223)
Trade and other
payables (19,919) (32,162) (26,826)
Provisions (23,120) (337,980) (28,900) (461,190) (23,120) (455,540)
------------ ---------- ------------
Current liabilities
Convertible loan
notes (504,760) (965,068) (1,000,000)
Trade and other
payables (479,155) (710,438) (333,288)
Current income
tax liabilities (733,164) (385,273)
Accruals and deferred
income (203,917) (170,288) (164,001)
Bank overdrafts
and loans (1,011,402) (2,932,398) (622,348) (2,468,142) (883,773) (2,766,335)
------------ ---------- ------------
Discontinued Operation - (200,105) -
Total liabilities (3,270,378) (3,129,437) (3,221,875)
Net assets 1,215,607 1,858,632 1,186,491
============ ============ ============
Issued capital
and reserves attributable
to owners of the
parent
Share capital 189,338 189,338 189,338
Share premium 247,123 247,123 247,123
Retained earnings 168,743 811,768 139,627
Undistributable
Reserves 422,322 422,322 422,322
Other reserves 188,081 188,081 188,081
------------ ------------ ------------
Total equity 1,215,607 1,858,632 1,186,491
============ ============ ============
This interim financial information was approved by the Board of
Directors on
29 February 2012
J L Dunion
Finance Director
CROMA GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2011
Cashflows from operating Six Months Six Months Year ended
activities to 31 Dec to 31 30 June
2011 Dec 2010 2011
unaudited unaudited
& unreviewed & unreviewed
Profit before taxation 29,116 45,940 142,502
Adjustments 108,904 138,287 294,835
Net changes in working
capital (295,336) (38,456) (620,731)
Taxes paid - - (23,209)
-------------- -------------- -----------
Net cash (used)/from
continuing operations (157,316) 145,771 (206,603)
Net cash (used) in discontinued
operations - - (83,001)
Net cash (used)/generated
in operating activities (157,316) 145,771 (289,604)
-------------- -------------- -----------
Cash generated from
operations
Investing activities
Purchase of property,
plant and equipment (63,914) (46,994) (115,284)
Proceeds on disposal
of property, plant and
equipment - - 15,953
Cash proceeds from disposal
of subsidiary net of
cash disposed 207,903 - 677,409
Net cash generated/(used)
in investing activities 143,989 (46,994) 578,078
-------------- -------------- -----------
Cash flows from financing
activities
Hire purchase payments (4,857) (9,669) (4,123)
Net advances on invoice
discounting facility 158,878 91,086 227,587
Repayment of borrowings (600,000) - -
Issue of share capital - - -
- cash issue
Interest paid (63,957) (59,914) (125,911)
Net cash (used) in financing
activities (509,936) 21,503 97,553
-------------- -------------- -----------
Net increase/(decrease)
in cash and cash equivalents (523,263) 120,280 386,027
Cash and cash equivalents
at beginning of period 511,344 95,802 125,317
Cash and cash equivalents
at end of year (11,919) 216,082 511,344
============== ============== ===========
Six Months Six Months Year ended
to 31 Dec to 31 30 June
2011 Dec 2010 2011
unaudited unaudited
& unreviewed & unreviewed
GBP GBP GBP
Cash at bank and in
hand 42,607 216,117 597,119
Bank overdraft (54,526) (35) (85,775)
Total (11,919) 216,082 511,344
============== ============== ===========
NOTES TO THE INTERIM FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2011
1. Accounting policies
Basis of preparation
The financial information in the half yearly report has been
prepared using the recognition and measurement principles of
International Accounting Standards, International Financial
Reporting Standards and Interpretations adopted for use in the
European Union (collectively Adopted IFRSs). The principal
accounting policies used in preparing the half yearly report are
those the group expects to apply in its financial statements for
the year ended 30 June 2012. The principal accounting policies in
this half yearly report are unchanged from those applied in the
2011 financial statements. The financial information for the six
months ended 31 December 2011 and the six months ended 31 December
2010 is unaudited and unreviewed. The comparative financial
information for the full year ended 30 June 2011 was derived from
audited statutory financial statements and was originally published
in compliance with IAS 1. It has been restated here to be in
compliance with IAS 1 (Revised). This effects presentation only. A
copy of these statutory financial statements has been delivered to
the Registrar of Companies. The auditors' report on these accounts
was unqualified, but did include a reference to matters to which
the auditors drew attention by way of emphasis without qualifying
their report. The auditors' report did not contain a statement
under sections 498(2) and 498(3) of the Companies Act 2006.
While the financial information included in this half yearly
report is consistent with the recognition and measurement
principles of adopted IFRS, it does not comply with the
requirements of IAS34 Interim Financial Reporting.
Going concern
The Group's activities are funded by a combination of long term
equity capital, convertible loan notes, and short term invoice
discounting and bank overdraft facilities. The day to day
operations are funded by cash generated from trading and primarily
invoice discounting facilities.
In considering the ability of the Group to meet its obligations
as they fall due, the directors have considered the following
matters: the expected trading and cash requirements of the group,
the level of overheads likely to accrue, repayment of creditors and
the potential cash outflows associated with the convertible loan
notes which are payable between December 2012 and February
2013.
The Directors have considered a range of scenarios in respect of
each of these variables. Most of these scenarios indicate that the
Directors will have to raise some additional finance during the
year, although the level of funding required is highly dependent on
the assumptions within each scenario. At the date of signing these
financial statements the additional finance has not been secured.
The Directors have had discussions with potential funders and
believe they will be able to secure the necessary finance.
From a trading perspective, whilst there are inevitable
pressures from the current general economic climate, the Board
remains positive about the retention and outlook of its main
trading operations. The full year effect of recent contract wins
have been factored into the Board's profit and cash flow
projections. The invoice discounting and overdraft facilities fall
due for review on 30(th) September 2012.
In consideration of the potential cash outflows associated with
the convertible loan notes, the holders of the loan notes have the
option to either convert their debt into equity in the Group or
repayment in cash on the due dates. Given the current share price
the Directors consider it is unlikely that the debt will be
converted into shares. The redemption profile is as follows:
-- GBP520,000 on 20 December 2012
-- GBP100,000 on 8(th) February 2013
-- GBP200,000 on 22(nd) February 2013
The Board maintain a close working relationship with the holders
of these loans and expect to discuss maturity options with the loan
note holders in the near future and have obtained indications of a
willingness to enter into such negotiations from the note
holders.
The Directors are confident that adequate funds will be raised
to fund the creditors repayments, redemption or redemption dates
deferred; however, there can be no guarantee that these funds will
be raised or redemption dates deferred.
The interim financial statements do not reflect the adjustments
that would be necessary were the trading performance of the Group
to deteriorate and/or the funding available from invoice
discounting and the overdraft was not available. Furthermore, the
reliance by the Group to raise additional funding to finance the
loan note redemption or to successfully negotiate the redemption
date of its loan notes indicates the existence of a material
uncertainty which may cast significant doubt about the Group's
ability to continue as a going concern. The interim financial
statements do not include the adjustments that would result if the
Group was unable to continue as a going concern.
2. Taxation
Taxation has been provided for at 25% (2010: 28%) although no
taxation has been charged due to the availability of tax losses
brought forward.
3. Earnings per share
The earnings per share is based on the profit/ (loss) for the
period and the weighted average number of ordinary shares in issue
and ranking for dividend.
6 months 6 months
ended ended Year Ended
31 December 31 December 30 June
2011 2010 2011
unaudited unaudited
& unreviewed & unreviewed
Numerator
Profit/(loss) for the year on
continuing operations and used
in basic EPS 29,116 36,839 (5,604)
(Loss)/Profit for the year on
discontinuing operations and
used in basic and diluted EPS - 9,101 95,831
============== ============== ============
Denominator
Weighted average number of shares
used in basic EPS 189,337,815 189,337,815 189,337,815
Effects of:
- convertible debt 12,400,000 25,233,333 25,233,333
Weighted average number of shares
used in diluted EPS 201,737,815 214,571,148 214,571,148
============== ============== ============
Basic earnings per share (pence)
- (loss)/Earnings from continuing
operations 0.02 0.02 0.00
- (Loss)/earnings from discontinued
operations 0.00 0.00 0.05
- Total 0.02 0.02 0.05
-------------- -------------- ------------
Diluted earnings per share (pence)
- Earnings from continuing operations 0.00 0.02 0.03
- (Loss)/earnings from discontinued
operations 0.00 0.00 0.04
- Total 0.00 0.02 0.07
-------------- -------------- ------------
4. Cash and cash equivalents
Six Months Six Months Year ended
to 31 Dec to 31 Dec 30 June
2011 2010 2011
unaudited unaudited
& unreviewed & unreviewed
GBP GBP GBP
Cash
at bank
and
in hand 42,607 216,117 597,119
Bank
overdraft (54,526) (35) (85,775)
Total (11,919) 216,082 511,344
============== ============== ===========
5. Cash flow statement
Cashflows from operating Six Months Six Months Year ended
activities to 31 to 31 Dec 30 June
Dec 2011 2010 2011
unaudited unaudited
& unreviewed & unreviewed
Profit before taxation 29,116 45,940 142,502
Adjustments 108,904 138,287 294,835
Net changes in working
capital (295,336) (38,456) (620,731)
Taxes paid - - (23,209)
-------------- -------------- -----------
Net cash (used)/from
continuing operations (157,316) 145,771 (206,603)
Net cash (used) in
discontinued operations - - (83,001)
Net cash (used)/generated
in operating activities (157,316) 145,771 (289,604)
-------------- -------------- -----------
Cash generated from
operations
Investing activities
Purchase of property,
plant and equipment (63,914) (46,994) (115,284)
Proceeds on disposal
of property, plant
and equipment - - 15,953
Cash proceeds from
disposal of subsidiary
net of cash disposed 207,903 - 677,409
Net cash generated/(used)
in investing activities 143,989 (46,994) 578,078
-------------- -------------- -----------
Cash flows from financing
activities
Hire purchase payments (4,857) (9,669) (4,123)
Net advances on invoice
discounting facility 158,878 91,086 227,587
Repayment of borrowings (600,000) - -
Issue of share capital - - -
- cash issue
Interest paid (63,957) (59,914) (125,911)
Net cash (used) in
financing activities (509,936) 21,503 97,553
-------------- -------------- -----------
Net increase/(decrease)
in cash and cash equivalents (523,263) 120,280 386,027
Cash and cash equivalents
at beginning of period 511,344 95,802 125,317
Cash and cash equivalents
at end of year (11,919) 216,082 511,344
============== ============== ===========
Six Months Six Months Year ended
to 31 to 31 Dec 30 June
Dec 2011 2010 2011
unaudited unaudited
& unreviewed & unreviewed
GBP GBP GBP
Cash at bank and in
hand 42,607 216,117 597,119
Bank overdraft (54,526) (35) (85,775)
Total (11,919) 216,082 511,344
============== ============== ===========
6. Financial information
The Board of Directors approved the interim report on 29
February 2012. The financial information in respect of the six
months to 31 December 2011 has neither been audited nor reviewed
pursuant to guidance issued by the Auditing Practices Board. A copy
of this report can be obtained from Security House, 23 Loganbarns,
Dumfries, DG1 4BZ or is available on our website at
www.cromagroup.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
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