TIDMCSSG
RNS Number : 1375G
Croma Security Solutions Group PLC
28 February 2018
28 February 2018
Croma Security Solutions Group Plc
("CSSG", the "Company" or the "Group")
Interim Results for the Six Months to 31 December 2017
High Demand for Increased Security Services Drives H1 Revenue
and Profits Growth
Croma Security Solutions Group plc the AIM listed total security
services provider announces its unaudited interim results for the
six months to 31 December 2017.
Record Financial Performance
-- 55% increase in revenues to GBP17.3m (2016: GBP11.2m)
-- Significant rise in EBITDA to GBP1.2m (2016: GBP0.44m)
-- Pre-tax profits up over fourfold to GBP1.0m (2016: 0.22m)
-- Earnings per share more than quadrupled to 4.92p (2016: 1.09p)
-- 20% increase in H1 dividend to 0.6p (2016: 0.5p)
Market Fundamentals Driving Demand
-- Strong trading performance driven by the high demand for
increased security from both the private and public sector
-- Both divisions Croma Vigilant and Croma Systems have been
successful in securing new and maintaining existing business
-- Croma Vigilant has:
o benefitted from a significant increase in demand for its
premium services;
o secured the largest manned guarding contract in the Company's
history worth GBP27 million in total over 6 years, commencing in
the current year; and
o become accredited to provide security for local communities as
"replacement police support".
-- Croma Systems has:
o recorded good growth across all security solutions;
o benefitted from the consolidation of activities under one
division; and
o generated new commercial opportunities around the Group's
FastVein (Biometrics) technology.
Outlook for 2018
-- Ideally placed to deliver a record performance for the full year
-- Look to maintain progressive dividend policy for FY 2017
Sebastian Morley, Chairman of CSSG, said:
"Profits for H1 are well in excess of the whole of last year so
we are on track for this to be a record year for the business.
While there have been some premium one-off contracts within the H1
trading performance, this has been combined with long-term contract
wins which will commence in the second half. Moreover, we believe
security will continue to be an increasing priority for government
and the commercial world and that Croma's combination of
technically innovative security solutions delivered with an
ex-military ethos differentiates us and makes us well placed to
continue to gain market share."
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
An interview of Croma Security Solutions Group Plc Chairman,
Sebastian Morley, discussing today's Interim Results with Vox
Markets will be available today from 12:30. To listen go to
https://www.voxmarkets.co.uk/company/CSSG.
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 Group
performing strongly and generating sales and profits significantly
ahead of the prior year. The Group's financial performance shows
our success to date but also we believe reflects a fundamental
uplift in our future long-term earnings.
Heightened security tension in the UK and throughout the world
has led to an increase in demand for security services and, in
particular, premium security services, as organisations recognise
the need to invest in high-quality security personnel and
sophisticated technical solutions. From the outset, Croma has
sought to provide a premium service amidst an industry which has
historically been more cost driven as opposed to security driven.
The switch in attitude is benefitting us and helping the Group gain
market share.
Financial Review
Revenue increased by 55% to GBP17.3 million for the six months
to 31 December 2017 (2016: GBP11.2m) leading to a fourfold increase
in pre-tax profit of GBP1.0 million (2016: 0.22m) and earnings per
share increasing to 4.92 per share (2016 :1.09p). This was
therefore a strong financial performance reflecting the successful
conversion of new business across each division.
The Company remains in a robust financial position with very low
borrowings and net cash of GBP1.4 million, positioning the business
well to continue to benefit and invest behind the opportunities
that are arising in what is a good market.
Dividend
The Board is pleased to declare a 20% increased interim dividend
of 0.6p (2016: 0.5p) per share, to be paid on 9 April 2018 to
shareholders with an ex-dividend date of 8 March 2018 and an
associated record date of 9 March 2018.
Croma Vigilant
Croma Vigilant is the largest part of our business providing
manned guarding for assets and individuals and has had a very
successful period. 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 six new
contracts from both public and private organisations of which two
were one off projects which boosted the financial performance,
however, the balance of contracts are long-term and one contract in
particular with a major UK local authority is the largest the Group
has ever won. The contract is for six years providing a range of
security services and is worth GBP27 million in total.
Reflecting the reduction in government budgets for the UK Police
Force, Vigilant recently completed the Community Safety
Accreditation Scheme. This accreditation enables Croma to provide
private security within communities using mobile and foot patrol
officers. There is an increased political focus currently around
the reduction in the number of police officers patrolling our
streets and with our highly disciplined force of security personnel
Croma is well placed to support the regular police and local
communities.
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.
This division is also benefitting from the general increase in
security concerns and increasingly customers of Vigilant are buying
security solutions from this division as part of a one stop shop
service and vice versa.
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. Currently FastVein is in use in
school entrances and on largescale construction sites verifying the
shift times for employees and subcontractors. Interest and
alternative applications are emerging all the time and it is
exciting to be developing this product.
Outlook
We have begun the second half of the financial year strongly,
continuing to take advantage of the high demand for premium
security services. The Croma brand is clearly differentiated from
the mainstream and we are providing total security solutions which
are typically technically innovative but always implemented with
our ex-military ethos which ensures a reliability and
trustworthiness that sets us apart. We look forward to delivering a
record year for the business.
Sebastian Morley
Chairman
28 February 2018
CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR 6 MONTHSED 31 DECEMBER 2017
6 months 6 months Year
ended ended ended
31-Dec-17 31-Dec-16 30-Jun-17
unaudited unaudited audited
Notes GBP000s GBP000s GBP000s
Revenue 17,269 11,154 22,058
Cost of sales (14,066) (9,120) (18,033)
---------- ---------- ----------
Gross profit 3,203 2,034 4,025
18.55% 18.24% 18.25%
Administrative expenses (2,187) (1,789) (3,802)
Other operating income - 6 208
---------- ---------- ----------
Operating profit 1,016 251 431
---------- ---------- ----------
Analysed as:
Earnings before interest, tax, depreciation,
and amortisation 1,197 436 697
Depreciation (60) (64) (81)
Amortisation (121) (121) (185)
---------- ---------- ----------
Operating profit 1,016 251 431
Finance expense costs (18) (27) (74)
Profit before tax 998 224 357
Tax (181) (38) 3
Profit for the year from continuing operations 817 186 360
Profit and total comprehensive profit
for the period attributable to owners
of the parent 817 186 360
Earnings per share 2
Basic and fully diluted earnings per
share (pence)
- From continuing operations 4.92 1.09 2.13
CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2017
31-Dec-17 31-Dec-16 30-Jun-17
unaudited unaudited audited
GBP000s GBP000s GBP000s
Assets
Non-current assets
Goodwill 7,213 7,213 7,213
Other intangible assets 1,040 1,280 1,161
Property, plant and equipment 474 429 420
8,727 8,922 8,794
---------- ---------- ----------
Current assets
Inventories 638 684 710
Trade and other receivables 6,277 3,936 3,804
Cash and cash equivalents 1,374 296 770
8,289 4,916 5,284
---------- ---------- ----------
Total assets 17,016 13,838 14,078
========== ========== ==========
Liabilities
Non-current liabilities
Deferred tax (220) (286) (238)
Trade and other payables (21) (327) (89)
(241) (613) (327)
---------- ---------- ----------
Current liabilities
Trade and other payables (6,006) (2,261) (3,251)
Borrowings - (759) (195)
(6,006) (3,020) (3,446)
---------- ---------- ----------
Total liabilities (6,247) (3,633) (3,773)
---------- ---------- ----------
Net assets 10,769 10,205 10,305
========== ========== ==========
Issued capital and reserves attributable
to owners of the parent
Share capital 795 845 845
Capital redemption reserve 51
Share premium 6,133 6,129 6,133
Merger reserve 2,139 2,139 2,139
Retained earnings 1,637 1,082 1,176
Other reserves 14 10 12
---------- ---------- ----------
Total equity 10,769 10,205 10,305
========== ========== ==========
CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR 6 MONTHS ENDED 31 DECEMBER 2017
6 months 6 months Year
ended ended ended
31-Dec-17 31-Dec-16 30-Jun-17
unaudited unaudited audited
GBP000s GBP000s GBP000s
Cash flows from operating activities
Profit before taxation 998 160 357
Depreciation, and amortisation 181 147 368
Loss on sale of plant and equipment - - 3
Net changes in working capital 167 (693) 443
Financial expenses 18 14 74
Taxes paid (48) - (12)
Net cash generated/(used) from operations 1,316 (372) 1,233
---------- -------------- ----------
Cash flows from investing activities
Purchase of subsidiary, net of cash
acquired - (605) (100)
Purchase of property, plant and
equipment (114) (113) (114)
Proceeds on disposal of property,
plant and equipment - - 7
Net cash (used) in investing activities (114) (718) (207)
---------- -------------- ----------
Cash flows from financing activities
(Purchase of own shares)/New share
issue (355) - 5
Hire purchase payments (30) 33 (56)
(Repayments)/advances on borrowings (195) 490 (439)
Dividends paid - - (84)
Interest paid (18) (9) (74)
Net cash generated/(used) in financing
activities (598) 514 (648)
---------- -------------- ----------
Net increase/decrease in cash and
cash equivalents 604 (576) 378
Cash and cash equivalents at beginning
of period 770 839 392
Cash and cash equivalents at end
of the period 1,374 263 770
========== ============== ==========
NOTES TO THE INTERIM FINANCIAL STATEMENTS FOR 6 MONTHS TO 31
DECEMBER 2017
1. 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 ("IFRS").
The principal accounting policies in this half yearly report are
unchanged from those applied in the 2017 financial statements. The
financial information for the six months ended 31 December 2017 and
the six months ended 31 December 2016 are unaudited and have not
been reviewed by the Group's auditor.
The financial statements for the year ended 30 June 2017, which
were prepared in accordance with IFRS, and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS,
have been delivered to the Registrar of Companies. The auditors'
report on these accounts was unqualified and did not contain a
statement under sections 498(2) and 498(3) of the Companies Act
2003.
While the financial information 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 nor does it constitute statutory
accounts within the meaning of the Companies Act 2006.
2. 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-17 31-Dec-16 30-Jun-17
Numerator
Profit for the year on continuing operations
and used in basic EPS (GBP000s) 817 186 360
Denominator
Number of shares (thousands)
Weighted average number of shares
used in basic EPS 16,591 16,893 16,894
Weighted average number of shares
used in diluted EPS 16,604 16,893 16,903
3. Taxation
Taxation has been provided for at 19.0%
4. Dividends
The Board approved an interim dividend for the year of 0.6 pence
per share (2016: 0.5p).
5. Financial Information
The Board of Directors approved this interim report on 27
February 2018.
A copy of this report can be obtained by writing to the Finance
Director at our registered office; Unit 6 Fulcrum 4, Solent Way,
Whiteley, Hampshire PO15 7FT or from our website at
www.cssgroupplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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