Results for the Year to 30 June 2011 (5923S)

TIDMCMG

RNS Number : 5923S

Croma Group PLC

23 November 2011

CROMA GROUP PLC

23 November 2011

Final Results

Croma Group plc ("Croma" or the "Group"), the AIM listed total security solutions provider, is pleased to announce its final results for the year ended 30 June 2011, during which the Group has completed the final stage in its restructuring and increased sales substantially.

Highlights

-- Croma has enjoyed a third year of sales growth following the final step in the restructuring of the business

   --   Year-on-year sales increased by 67.5% 
   --   Pre-tax profit increased by 17.4% 

-- The sale of the RDDS Avionics subsidiary resulted in an exceptional charge of GBP743,000, producing a post-tax loss after exceptional items of GBP626,000

Extracts from the financial statements follow and a full version is available on the Company's website www.cromagroup.co.uk.

Sebastian Morley, CEO of Croma, commented "This has been a key year in the restructuring and development of the Group. We have now focused the businesses sharply onto the security sector, concentrating on high sensitivity defensive security projects. Our strategic partnership with CSS Group has broadened our offering to a total security services solution for our clients and this has not only enhanced our clients' security operations, it also adds value to the Group in cross marketing opportunities. We look forward to continuing this relationship and creating value for our shareholders going forward."

Notice of Annual General Meeting

Croma Group plc today gives notice that the Annual General Meeting ("AGM") of the Company will be held at Quality Hotel, Edinburgh Airport, Ingliston, Edinburgh EH28 8AU on 16 December 2011 at 10.00 a.m. The notice of AGM has today been posted to shareholders and is available on the Company's website www.cromagroup.co.uk

Annual Report and Accounts

The Company announces that the annual report of the Company for the year ended 30 June 2011 has been posted to shareholders today. The annual report is also available on the Company's website www.cromagroup.co.uk

Further information:

Croma Group Plc

Sebastian Morley [phone]

Brewin Dolphin

Sandy Fraser [phone]

Chairman's Statement

I have pleasure in announcing the results of the Group for the year ended 30 June 2011.

Financials

The results demonstrate the last element of the restructuring of the business, which was completed with the sale of the Group's subsidiary, RDDS Avionics Limited ("RDDS").The Group now stands ready to continue to target the security services sector as the engine for its future growth, based on the continuing success of the Vigilant subsidiary.

Sales improved significantly during the year reaching GBP8.46 million against GBP5.05 million for 2010 (as re-stated for the sale of RDDS). Gross profit was GBP1.62 million (2010: GBP1.38 million) and operating profit was ahead at GBP322K (2010: GBP196K). The pre-tax profit from continuing operations for the year was GBP143K against a prior year loss of GBP6K.

The sale of RDDS realised GBP928K plus the possibility of a further GBP600K in earn-out which the Board has for the time being disregarded. This has required us to make a charge of GBP743K in the period for the write-off of goodwill. The net loss attributable to shareholders for the period of GBP626K (2010: profit GBP90K) assumes no potential earn-out from the RDDS sale and but for the goodwill write off the remaining businesses delivered a profit attributable to shareholders of GBP116K against the loss attributable to continuing operations for 2010 of GBP6K, a substantial increase.

Business Review and outlook

Following the disposal of RDDS in March 2011, the Group has two key business areas, access security and installation systems (Photobase), and asset protection including manned guarding and key holding (Vigilant), and the financial results of those businesses are set out in more detail in the Directors' Report.

Towards the end of the year, Vigilant won its largest ever contract, and since the year end further significant contracts have been added. The benefit of these recent wins will fully impact on current year results. The Directors are satisfied that improved gross margins can be achieved in the coming year. The new contracts continue the strategy of widening the national reach of the business as well as broadening the client base to focus on large private businesses rather than the Ministry of Defence and public sector, which the Board continues to believe may be under threat from central government cost-saving initiatives.

We said last year that the Board would continue to review opportunities to improve efficiencies within the two subsidiaries, as well as consider more strategic opportunities as and when they arise. During the period, the Group announced the strategic framework agreement with the CSS group of companies, which specialises in using technology to add to the mix of security solutions we can offer our clients. This arrangement has proved very fruitful for both Croma and CSS; Photobase in particular has made sales of GBP450K during the period due to the success of the framework agreement.

The disposal of RDDS in March 2011 has enabled the Group to repay GBP600K of the convertible loan notes issued in 2006 and it is the intention of the Board to repay the balance of the loan notes as and when the repayment dates fall due between December 2012 and February 2013. The loan note terms are explained more fully in the notes to the accounts.

The Group is now focused, profitable and cash generative and poised to take the opportunity to broaden its activity in the delivery of security solutions. As ever, I thank our management and staff for their efforts over the period in delivering another year of steady growth.

Nick Hewson

Non-executive Chairman

22 November 2011

Consolidated Statement of Comprehensive Income

for the year ended 30 June 2011

 
                                             2011          2010 
                                              GBP           GBP 
 
 Revenue                                8,457,665     5,045,765 
 
 Cost of sales                        (6,840,379)   (3,670,386) 
 
 Gross profit                           1,617,286     1,375,379 
 
 Administrative expenses              (1,295,426)   (1,179,317) 
 
 Operating profit                         321,860       196,062 
 Finance expense costs                  (179,358)     (201,666) 
 
 Profit / (loss) before 
  tax                                     142,502       (5,604) 
 Tax                                     (26,031)             - 
                                     ------------  ------------ 
 Profit / (loss) for the 
  year from continuing operations         116,471       (5,604) 
 (Loss) / profit from discontinued 
  operations                            (742,672)        95,831 
 
 
 (Loss) / profit and total 
  comprehensive (loss) / 
  profit for the year attributable 
  to owners of the parent               (626,201)        90,227 
                                     ============  ============ 
 
 
 Basic earnings per share 
  (pence)                                  (0.33)          0.05 
 
 Diluted earnings per share 
  (pence)                                  (0.31)          0.07 
 

Consolidated Statement of Financial Position

as at 30 June 2011

 
                                          2011          2011        2010          2010 
                                           GBP           GBP         GBP           GBP 
 Assets 
 Non-current assets 
 Property, plant and equipment                       182,945                   233,863 
 Goodwill                                          1,396,390                 2,148,650 
                                                ------------              ------------ 
 
                                                   1,579,335                 2,382,513 
 
 Current assets 
 Inventories                                 -                   189,385 
 Trade and other receivables         2,231,912                 2,271,121 
 Cash and cash equivalents             597,119                   187,248 
                                  ------------                ---------- 
 
                                                   2,829,031                 2,647,754 
                                                ------------              ------------ 
 Total assets                                      4,408,366                 5,030,267 
                                                ------------              ------------ 
 Liabilities 
 Non-current liabilities 
 Convertible loan notes              (398,371)                 (379,856) 
 Deferred tax                          (7,223)                   (1,373) 
 Trade and other payables             (26,826)                  (32,162) 
 Provisions                           (23,120)                  (28,900) 
                                  ------------                ---------- 
                                                   (455,540)                 (442,291) 
 Current liabilities 
 Convertible loan notes            (1,000,000)                 (965,068) 
 Trade and other payables            (333,288)                 (313,412) 
 Current income tax liabilities      (385,273)                 (450,609) 
 Accruals and deferred 
  income                             (164,001)                 (413,853) 
 Bank overdrafts and loans           (883,773)                 (632,342) 
                                  ------------                ---------- 
 
                                                 (2,766,335)               (2,775,284) 
 Total liabilities                               (3,221,875)               (3,217,575) 
                                                ------------              ------------ 
 Net assets                                        1,186,491                 1,812,692 
                                                ------------              ------------ 
 Issued capital and reserves