RE: Encouraging results and outlook today7 Nov 2023 09:01
WH Ireland aren't yet publishing full forecasts following the Vigilant disposal, but anticipate doing so, and note that a rating "on an EV/EBITDA basis below 5x does not seem overly demanding".
They summarise:
"Croma Security Solutions (CSSG) – Corporate – FY results reflect continuing strong momentum
Market Cap: £5.8m
FY results from CSSG this morning reflect very healthy growth from the continuing business following the disposal of Vigilant. The company is a leading provider of specialist security products, notably locks and related devices; and beyond this, of electronic security products and monitoring services, with 14 security centres in the UK.
Continuing revenues for the year to June ’23, at £8.03m 38% ahead YoY, included significant underlying growth of 21%, while the overall underlying (ex-Vigilant) gross margin has also moved ahead YoY at 46.7% (was: 43.9%).
Overall EBITDA at £0.954k was 78% ahead YoY, and continuing PBT / EPS also well ahead – £0.4m continuing PBT plays £0.1m in the prior year.
Net cash is very healthy at £2.1m, notwithstanding substantial investments – and further substantial payments are to be expected in respect of Vigilant, with a £0.5m cash payment in March ’24 to be followed by a further nine payments of c.£0.4-0.5m each, and the redemption of £1.3m of Vigilant shares anticipated for July 2024.
Overall, the results suggest that the group is making excellent progress in its new shape, while encouragingly, current trading is said to be good."
Also:
"The company is a beneficiary of underlying drivers, notably concerns over rising crime, increasing corporate risk aversion and regulation, and CSSG’s ability to meet changing demands from its customer base."
"Moreover, CSSG’s core market offers fertile opportunities for consolidation, and with a meaningful funding stream deriving from the disposal, we view the company as extremely well-placed to pursue further accretive acquisitions in line
with its stated strategy."
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