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tp 120++
Good to see CSSG getting some attention on Stockopedia, with a new review by Jack Brumby in his market update yesterday. He concludes:
"Robust Trading
Both divisions have traded well since the start of the year and the impact of Covid-19 has been more than offset by strong performances elsewhere in the group. The board now anticipates a better result than previously expected, with FY EBITDA of at least £1.85m (2020: £1.75m). Taking the group’s net cash figure of £5.5m below and using that for the EV calculation, that looks like striking value on the face of it (EV/EBITDA of c3.85x).
Croma Systems (which includes the lockdown-affected locksmith stores) is expected to deliver an increases in sales and profits against the prior year.
Croma Vigilant, the largest division, is also expected to perform well against the prior year. This division has benefitted from the increased need for manned guarding and Proception services.
Balance sheet – no debt (excluding lease liabilities) with net cash of £5.5m. That’s highly significant given the market cap, as is the level of annual revenue.
Conclusion
Trading momentum is positive and if this is a viable business, then the shares are likely mispriced at current levels on account of the material net cash holding. Croma has struggled to increase net profits in line with revenue growth though.
Despite that, the group looks strongly cash generative so perhaps profits are understated.
With such a small market cap, corporate governance and depth of management are key considerations. Is there enough quality at the top to get Croma up to the next level in terms of scale? A quick look at indeed shows some mixed reviews from employees. By itself, not enough to come to any kind of conclusion, but it’s enough to suggest this is an area to investigate further. As noted above, it’s good to see some institutions present.
There’s probably potential here, but also clear risks primarily around liquidity – if there is ever a profit warning and you want to get out, it’s going to be tricky. This must partially explain the cheap valuation."
Surprised no one has come in and tried to buy the whole company its incredibly cheap
Hold 5 companies in my isa and this is one of them
It's also worth noting that the directors own around a third of the company - including three director purchases in the last year - so their interests are aligned with the rest of us.
I assume after the upcoming results WH Ireland will reinstate forecasts.
Given that there's now something to shout about, perhaps the directors can begin to embrace contacts with investors via Investor Meet etc.
WH Ireland have issued an update note as follows - no specific forecasts as yet, but hopefully a dividend of at least 2p per share coming soon.
It would be great to see that £5.5m cash pile utilised for one or more of those expected and transformational acquisitions.....
"Croma Security Solutions (CSSG) – Corporate –
Positive update; trading ahead of management expectations and last year Market Cap £10m Share Price 67.5p
A positive update from CSSG shows that both Vigilant and the Systems business are trading well, with overall EBITDA set to exceed management expectations in the year to 30 June 2021, coming in at >£1.85m. Notwithstanding one-off business, which was in run-off and which the company has exited since the prior year, and also the fact of FY2021 bearing a bigger burden of lockdown that the previous year, CSSG has still succeeded in lifting EBITDA by 6% YoY (FY2020: £1.75m). It has also succeeded in generating a higher level of profits in the second half (H1 / H2 split: 48% / 52%). Renewed lockdown impacted the company’s locksmiths and systems businesses in particular during its Q2 and Q3 trading quarters (i.e. from December to mid-April). Net cash at £5.5m is well up on the September 2021 number of £3.6m
In terms of the divisions, both sides of the business are progressing well. The Vigilant business, which is a market leader in its field, delivering services ranging from guarding by ex-military personnel to front of house in residential and other buildings, is benefiting from the increased need to guard empty premises. We expect this will continue post-pandemic. Its front of house service is continuing to achieve increased market share and is integrated with its security services offering. Beyond this, in the systems division, we also see growth, with entertainment centres increasingly open, and more expected in that realm post the planned 19 July opening of public facilities such as cinemas and theatres.
WHI view: It is pleasing to see balanced growth within CSSG, and the response to the pandemic was good, while the company is now responding to new post-pandemic requirements from its clients. The company should prove a beneficiary of increased economic activity and more opportunities both on the systems and the manned guarding fronts. The latter in particular has a strong overall offering to provide to local authority and other clients. We note that the dividend will be resumed and anticipate, without having formal forecasts for CSSG, that it will repeat levels paid in recent years, given the company’s statement that the final dividend will reflect the results it anticipates."
The year end trading statement is out - and it's excellent. Results are better than anticipated - and will be ahead of the prior year despite the pandemic.
There's a hint that the final dividend will be terrific, and there's confidence that the business will continue to grow..
The £10m m/cap is bonkers given £1.85m EBITDA - at minimum - and a £5.5m and fast rising net cash pile!
Very cheap glad to see it more today, I keep being more
after a £4k buy. Super exciting :o))
after a 14k buy at 71.2p.
With all that net cash (£3.9m against a £10.7m m/cap) I'm hoping for a highly earnings-enhancing acquisition to further enhance the positive trading.
It was an Exec. Director who bought that £10k of shares yesterday to take his holding to almost 200,000 shares. Good to see:
Https://uk.advfn.com/stock-market/london/croma-security-solutions-CSSG/share-news/Croma-Security-Solutions-Group-PLC-Director-PDMR-S/84652572
after a £10,000 buy at 74.3p...just needs a little push to look good chart-wise.
WH Ireland have produced a positive new note on CSSG as follows:
"Croma Security Solutions (CSSG) –Corporate –Half Year Report:
Covid disruption held to minimum; well-placed for the full year
Market Cap £10.7m Share Price 72p
Generating £0.9m EBITDA in the six months to December 2020 (H1-21E), CSSG has produced a highly creditable set of H1 results, particularly set against the backdrop of the second lockdown, which partially impacted their business as before. Sales overall at £16.4m tailed H1-20A by just 6%, while EBITDA saw a £200k-plus reduction YoY –but it is important to note that this includes some one-time business which was in any case in run-off irrespective of Covid / lockdown, as previously flagged by the company. Net cash at £3.6m is meaningfully up by 89% YoY, reflecting the cash-generative qualities of the business even in difficult times. Encouragingly, trading patterns are good in the current calendar year (FY-21E H2 from thecompany’s reporting perspective).
Divisionally, thanks to Covid, this is a tale of varying developments, with the well-respected Vigilant manned guarding operation (manned by ex-military personnel and now offering a well-received front-of-house service) suffering little or no impact from the pandemic –in fact, possibly emerging as a net gainer, and succeeding in growing revenues by as much as 6%. Again, this is highly creditable since we estimate that H1 run-off work may have declined by as much as £100k YoY. In Systems and Locksmiths, revenues fell YoY, inevitably, given that trading was below normal levels due to Lockdown 2; however sales grew strongly as against the second half of the prior year, by some 31%, a tribute to the fact that CSSG’s Locksmith centres were able to open for the whole of the six months to December ’20, as they were not in the first lockdown. That said, Security Systems clients such as entertainment venues remained closed, -bearing everything in mind, we view this as a very decent outcome at the divisional level.
WHI view:
We expect similar dynamics as before to continue to play out in H2, in other words (1) good underlying growth from Vigilant, which continues to fire on all cylinders, (2) the non-underlying business flagged previously to have been concluded, (3) lockdown generating its own security concerns which are answered by manned guarding supporting Vigilant, (4) continued recovery within the Security Systems and Locksmiths businesses, moderated by Lockdown 3. Looking further forward, we view the company as a gainer from renewed economic activity looked for in the second half of calendar 2021, and see future opportunities within the increased emphasis on security, the strong brands within the group (notably Vigilant) and the excellent track record in winning prestigious local authority and other contracts. The company has highlighted potential consolidation opportunities going forward, and this too seems very believable."
Moving up! Looks like a 27k buy at 74p did the trick. Looks cheap to me.
Disappointed with the numbers, although i guess there is the impact of C19 to be considered. No dividend, despite it only being reinstated a few months back.
Unless they can demonstrate growth, PE will have to be heavily discounted.
Jolly, thoughts?
Good H1 results today given the pandemic - particularly with the cash pile up to £3.9m against the £10.7m m/cap!
The outlook is very good too - "Positive trading patterns have continued into the second half of the year", and "Well placed for a satisfactory result for the year".
With 36% of the m/cap represented by the cash pile, that means CSSG are on track to make an annualised PAT of almost £800,000 against a net EV of only £6.8m.....
I wonder if there's a big opportunity for the likes of CSSG in guarding/front of house/security for hotels under the just announced UK hotel quarantine plan starting in just over a week?
Https://www.bbc.co.uk/news/uk-55944464
why doesn't that appear as rns on lse (or HL)??
Canaccord Genuity have been buying - they now have over 12%, with 1.825m shares. Great vote of confidence from such a heavyweight institution, happy to have such a large stake in this microcap £10m m/cap company:
https://uk.advfn.com/stock-market/london/croma-security-solutions-CSSG/share-news/Croma-Security-Solutions-Group-PLC-Holdings-in-Com/84109305
My broker just quoted 76p to buy 1000 shares ; 77p for 5k and no offer for 10k ; on the sell side the quote was 68p for any quantity ... so ridiculously wide spreadmeans there is no real indication of the correct market price. It does atleast look as though we have finally moved up from the 64p that was unchanged for a month in Nov / Dec. I'm still hoping for 80-90p when next results get announced
A £2k buy at 70p has raised the price 5.5p.....presumably very little stock around.
£4k of buys today has pushed the bid price up 4p :o))
That £4.1m and rising cash pile (40% of the m/cap) must be burning a hole in the directors' pockets given the stated intention to make acquisitions.
They said in October the new financial year had started well - the current lockdown won't help, but hopefully it will be relatively short, and CSSG's trading was "resilient" through the first lockdown as evidenced by the final results.
A 7k buy at 70.9p (nicely above the 70p offer price) has moved the price up quickly - perhaps not much stock around?
Good to see the bid price move up 5p to 65p in particular.
daft spread: 60/8...why MMs??????
now 69.5p to buy
still 64.xp to sell
yes, 55p would be nuts given what we know about the business/prospects