Trading Update

RNS Number : 1657P

Croma Security Solutions Group PLC

08 June 2020

 

8 June 2020

CROMA SECURITY SOLUTIONS GROUP PLC

("CSSG" or the "Company")

Trading Update

Croma Security Solutions Group Plc, the total security services provider, today gives an update on trading in the current financial year, its operational responses to Covid-19 and the underlying strength of its financial position.

Update on current trading

The Board is pleased to confirm that the impact of Covid-19 has been light primarily only affecting the retail elements of the business and as a result expects the Company to generate EBITDA, for the 12 months ending 30 June 2020, of at least £1.6 million. This represents the Company's base case outcome for the year and there is a reasonable expectation that the actual outcome will be higher.

While the retail element under Croma Systems was naturally impacted due to the enforced closure of the security stores, this was offset by the increased need for manned guarding services to protect empty properties, offices and buildings. The Company has also continued to pursue and win new accounts with good demand for our new front of house concept PROception.

At the outset of the Covid-19 pandemic the Company took the prudent decision to cancel the interim dividend of 0.75p per share which was announced alongside the Interim Results on 2 March 2020. This decision was taken on the basis the impact of Covid-19 was unknown and it was therefore sensible to preserve cash within the business. The Board now expects to review this decision once the actual outcome for the year can be confirmed.

Operational Response

One of the advantages of managing a business with a strong military ethos is that there is within the management team a familiarity with adapting to a crisis situation. The Company had in the ordinary course of managing the business run a series of business continuity scenarios in December 2019 which were directly applicable to providing the operational response in the last 3 months. As a result, despite having over 100 security staff in self isolation at one time, the Company was still able to deliver its premium guarding services to all existing clients and critically meet the increased demand created by Covid-19.

This was achieved whilst implementing all safety precautions set out by the UK government and providing the necessary PPE workwear.

Financial Position

The Company has no borrowings and went into the crisis with net cash of in excess of £2.4 million. The strength of the Company's financial position has been further boosted as a result of Government support initiatives including deferred payment of business rates so that the Company has record cash levels. This will unwind but will still leave the business in a strong financial position.

Sebastian Morley Chairman of CSSG said:

"I am delighted with the Company's operational response and subsequent trading performance during this period of crisis for the country. We expect to complete this financial year in a good position and to be able to step up activity in the coming year taking advantage of demand for our new front of house concept PROception and any weaknesses in the market as a result of Covid-19."

For further information visit www.cssgroupplc.com or contact:

Croma Security Solutions Group Plc                                                                                            Tel: [phone]

Sebastian Morley (Chairman)

WH Ireland Limited                                                                                                                          Tel: [phone]

(Nominated Adviser and Broker)

Mike Coe

Chris Savidge

Novella  Tel: [phone]

Tim Robertson

Fergus Young

 

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