Unaudited preliminary results for the year to 30 June 2012static.knowledgevision.com/account/brr/assets/attachment/CSSG... · Unaudited preliminary results for the year to 30 June

croma security solutions group plc Unaudited preliminary results for the year to 30 June 2012

croma security solutions – a fully integrated services provider

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corporate highlights

• Transformational reverse takeover and £5m Placing successfully completed – business rebranded

as croma security solutions group plc (croma security solutions)

• Acquisition creates a security services specialist operating across four key divisions

• Vertically integrated offering, providing a more streamlined and cost-efficient service, opens up

significant national client opportunities seeking a one-stop shop

• Major contract wins in 12 months with Odeon, Colas, NHS, UK Land Plc

• FastVein®, a complete biometrics system, deployed at London 2012 Olympics

• Strengthened Board with Sebastian Morley and Roberto Fiorentino assuming Chairman and CEO

responsibilities respectively, with new FD Richard Juett joining in June

• New Southampton headquarters ideally placed for gaining new business throughout London and

the South East

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FY2012 FY2011

Revenue £9.90m £8.46m

Gross profit £1.76m £1.62m

Adjusted EBITDA1 £0.10m £0.32m

Admin expenses £(1.7)m £(1.2)m

Operating Profit / (Loss) £(0.41)m £0.51m

Profit / (Loss) Before Tax £(0.49)m £0.14m

Earnings per share (4.59)p (16.53)p

Net Debt2 £(0.08)m £(1.68)m

Notes : 1) EBITDA adjusted to exclude non-recurring acquisition costs

2) Cash, cash equivalents and borrowings 4

financial highlights

operational overview

croma vigilant – guarding & asset protection

• High grade professionals providing manned guarding and asset protection

for individuals and companies. USP is the specific provision of ex-military

personnel

• Provides a vital part of croma security solutions’ integrated offering

• Blue chip client base including Halliburton, ArcelorMittal and MoD. Broad

range of historical clients provides for immediate cross selling opportunities

across the group

• Contract wins in period with Great Portland Estates, NHS, UK Land Plc

• Financial numbers for the period reflect investment made in growing

business expansion into a national business and infrastructure

• croma vigilant clients starting to adopt services from croma security

systems division

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croma biometrics – identity management

• Over 20 years experience in biometrics and identity management. State of

the art identity management control systems. Available as a stand alone

product or integrated with existing security systems. Military and

commercial specifications both available

• Pioneers of FastVein® biometric system - a finger vein identification

technology and the most advanced biometric system available. FastVein®

ISO verification certainty of one million to one. FastVein® now moving from

investment phase towards being a net contributor

• FastVein® adopted by 18 HM Prisons and Immigration Removal Centres,

and successfully trialled by Southampton Hospital’s Intensive Care Unit.

FastVein® successfully used by Dorset Police Special Events Control

Centre for London 2012 Olympic sailing

• Other croma biometrics services include Armoury Quartermaster, Bail

Manager and Bio ID

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croma security systems – security & fire

• Professional security consultants, designers, suppliers, installers and maintainers

of all aspects of electronic security and fire systems

• Services incorporate design and integration of systems for intruder alarms, fire

alarms, CCTV, access control, car park barriers, turn-styles, perimeter detection

systems, fencing and security systems management and training

• Combining electronic security systems and specialist ex-military trained officers to

provide a more comprehensive integrated solutions service

• Redirection of sales effort on new national accounts where expertise applies

(i.e. UK Land Plc contract)

• Partnered with Odeon Cinemas for all aspects of security, including CCTV

maintenance. 40 new builds planned over next four years

• First contract order delivered to Colas reaffirming croma security solutions’

departure from traditional security services using technical capabilities to deliver

intelligent CCTV cameras to traffic management. Significant investment made to

date to help drive future contracts

• UK Land Plc contract demonstrates large client opportunities which require the

complementary provision of manpower and electronic systems

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croma locksmiths – locks, safes and keys

• Over 40 years experience in the design, supply, installation and

maintenance of master key systems and all aspects of locks, keys and

safes

• Master Locksmiths accreditation delivers clients with the assurance of

quality services

• Increasing sales throughout the south east driven by national accounts

including Odeon against backdrop of tough economic climate and over-

saturated local market

• Specialist training investment in the design and installation of automatic

door operator applications to meet an increased and growing pipeline of

new orders

• Contract signed with Carnival Cruises for the provision of mechanical

security locksmithing services

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financial commentary

summary profit & loss

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FY2012 FY2011 Commentary

£000's £000's

Revenue 9,894 8,458 Revenue has increased due to organic growth in Vigilant and the inclusion of the

turnover of the businesses of the CSS companies

Cost of sales (8,138) (6,840) 2012 saw a similar increase in costs of sales

Gross profit 1,756 1,617 The gross profit percentage dipped slightly with sales mix and continued margin

pressure across the group

Administrative expenses (1,661) (1,163) Administrative expenses increased on acquisition and also and reflect organic growth

in Vigilant

Depreciation and amortisation (133) (133) Included in the 2012 is £52k of amortisation costs charged against intangible assets

acquired with the CSS companies which are required to written off over their useful

lifesOperating (loss)/profit from trading activities (38) 322

Costs of borrowing (78) (179) Reduced borrowing costs mostly reflect the repayment and conversion of loan notes

(Loss)/Profit before tax and non- recurring items (116) 143

Corporation tax 68 (26)

Non-reoccurring items

Costs of acquiring the CSS companies (370) - This is the costs of professional fees incurred in acquiring the CSS companies

Profit/(loss) on discontinued operations 115 (743) £115k is the deferred income element from disposal of RDDS in 2011

Retained loss for the Year (303) (626)

summary balance sheet

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FY2012 FY2011 Commentary

£000's £000's

Goodwill & Intangibles 7,488 1,396 Goodwill of £4,470K arose on the acquisition of CSS group along with intangible assets

including brands and customer relationships of £1,674

Tangible fixed assets 402 183 Most significantly £257K, of tangible fixed assets were acquired with the CCS Group

Inventories 180 - This is the electronic components etc… of Croma Security and Locksmiths

Trade debtors & Other Receivables 2,706 2,232 There has been no significant increase in debtor days nor in bad debts

Cash & Equivalents 693 597 The CSS companies have zero external borrowings, this has helped bolster the cash

position at the year end

Total Assets 11,469 4,408

Trade payables (454) (360)

Other payables (698) (164) Other payables include £401K of deferred consideration in acquiring the CSS companies.

Of this, £152K is estimated to be satisfied with new equity

Current income tax liabilities (689) (385) The increase in tax liabilities is reflective of the size of the businesses as a whole including

staff numbers (PAYE and NI) and customers (VAT)

Provisions (including deferred tax) (453) (30) Included here is a deferred tax provision of £401K which is connected with the intangible

assets acquire with the CSS Companies

Convertible loan notes (240) (1,398) The final tranche of loan notes is due for repayment in 2012/13

Invoice discounting & overdrafts (532) (884) The group as an invoice discounting facility being 85% of book debts subject to a maximum

of £2M

Total liabilities (3,065) (3,222)

Total net assets attributable to the shareholders 8,404 1,186 This is reflective of the new equity placing in March 2012

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• Foundations now being laid to support the move to providing national services and new employees

have been recruited. These efforts are essential to enable the business to develop as a national

organisation

• Expansion of service offering to core client relationships including Odeon and Colas through

vertically integrated approach

• Necessary investment to improve IT infrastructure and general infrastructure in order to support and

drive new client remits

• International opportunities opening up within territories including Pakistan

• Market opening up with police cut backs and growing concern over safety and protection

• Stronger management team. Fully integrated service offering. Clear and coherent corporate

strategy. Opportune marketplace. Ready to move…

croma security solutions – strategy & outlook

croma security solutions – a strong professional partner

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appendices

croma security solutions – shareholder data

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Shareholder Total holding as

at 05.11.12

% of share

register

Total director holding 4,078,447 28.12%

Roberto Fiorentino 1,468,074 10.12%

Liontrust 1,200,000 8.27&

W H Ireland 1,127,333 7.77%

Oceanwood 800,000 5.52%

Blackrock 600,000 4.14%

Brewin Dolphin 576,000 3.97%

Artemis 573,333 3.95%

CQS 533,333 3.68%

Key

information

As at 05.11.12

Market Cap

£6.3m

Share price

43.5p

Market AIM

Ticker

CSSG

croma security solutions – management team

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Sebastian Morley – Chairman, croma security solutions

Mr Morley is the former Group CEO of croma, and joined the company in 2006. He was

formerly a Captain in The Black Watch, and has held the rank of Major for the United

Kingdom Special Forces. Mr Morley was educated at Eton and Sandhurst.

Roberto Fiorentino – CEO, croma security solutions

Mr Fiorentino is the former CEO of CSS Locksmiths and CSS Total Security. He has over

30 years experience in the security industry, and has a proven track record for developing

ground-breaking security technology, including Video Analytics.

Richard Juett – Finance Director, croma security solutions

Mr Juett joined croma security in June 2012 from CQFD where he was Director of

Finance. During his career he has been Financial Controller of Greatstar, Tax and

Treasury Manager at Kia Motors, and Corporate Tax Manager at BDO Stoy Hayward. He

is a qualified Chartered Accountant.

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Charles Neil McMicking - Non Executive, croma security solutions

Mr McMicking is currently Chairman of RailSimulator.com and director of Coburg Capital

and F4G Software. Mr McMicking has specialised in financing and developing dynamic

fast-growth companies for the last 16 years, and was previously Head of Private Equity at

Noble Group. Mr McMicking joined the Board of the Enlarged Group with effect from

Admission and is chairman of the remuneration committee.

Lord James William Eustace Percy - Non-Executive Director, croma security solutions

Lord James Percy is Colonel of the 5th Battalion Royal Regiment of Fusiliers and a member

of the Moorland Association, as well as former Chairman of the Countryside Foundation for

Education. Lord James Percy joined the Board of the Enlarged Group with effect from

Admission.

Andrew Nicholas Hewson - Non-Executive Director, croma security solutions

Mr Hewson has been an investor in Croma since 1998, joining the Board in 2005 as a non-

executive director; taking over as non-executive Chairman in 2008 and encouraging the

Group to sell loss-making businesses and make its maiden profits, and in 2009

reorganising its capital base so as to be in a position to pay a dividend. Mr Hewson is

chairman of the audit committee.

croma security solutions – management team

contact

coma security solutions group plc

Unit 6, Fulcrum 4

Solent Way, Whiteley

Hampshire PO15 7FT

Tel: 01489 566101

Fax: 01489 565375

Web: www.cssgroupplc.com

Email: [email protected]