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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Croma Security Solutions Group Plc | CSSG | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.00 | 0.00% | 70.50 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 70.50 | 70.50 | 70.50 | 70.50 | 70.50 |
| Industry Sector |
|---|
| SUPPORT SERVICES |
| Announcement Date | Type | Currency | Dividend Amount | Ex Date | Record Date | Payment Date |
|---|---|---|---|---|---|---|
| 07/11/2023 | Final | GBP | 0.022 | 30/11/2023 | 01/12/2023 | 15/12/2023 |
| 11/11/2022 | Final | GBP | 0.021 | 01/12/2022 | 02/12/2022 | 16/12/2022 |
| 21/10/2021 | Final | GBP | 0.02 | 11/11/2021 | 12/11/2021 | 26/11/2021 |
| 21/10/2020 | Final | GBP | 0.012 | 12/11/2020 | 13/11/2020 | 27/11/2020 |
| 13/08/2020 | Interim | GBP | 0.0075 | 20/08/2020 | 21/08/2020 | 04/09/2020 |
| 21/10/2019 | Final | GBP | 0.011 | 07/11/2019 | 08/11/2019 | 29/11/2019 |
| Top Posts |
|---|
Posted at 14/8/2024 07:22 by rivaldo Russell Long has been buying again - he's increased to 7.4% (from 6.4%) and now owns 1.022m shares, so has bought another 150,000:He's a member of Mythril LLP which has almost £9m of net assets, so reasonably substantial: |
Posted at 08/8/2024 09:57 by rivaldo Zeus's 27 page note from 16th May is well worth a read if you can access it. The section on the synergies from acquisitions is particularly interesting and reflects on the potential to grow quickly from the historic £1.06m EBITDA:"Roll-up at low multiples and clear synergies driving attractive ROIs Of the roughly 6,500 locksmith stores operating in the UK (Source: MLA), the vast majority are owner-operated or part of small enterprises of between one and three stores. With a large number of these stores facing succession issues, there are numerous stores available to acquire at highly attractive valuations – CSSG targets multiples ranging from 1-5x to 3x EV/EBITDA – with clear opportunities for synergies on day one to improve margins immediately post-acquisition. Having made a number of acquisitions in recent years (see Table 5 above), CSSG has built up a clear picture of the opportunities, which extend to i) cost savings and ii) sales growth. On the first score, given some inevitable cost duplications, together with a low level of professionalisation in the market as whole (in terms of financial and business management software adoption), the integration of CSSG’s proprietary software systems post-acquisition provides an immediate time/cost saving for small operations. Bulk purchasing rebates/discounts of more than 5% are typical once stores are brought into the group. On top of this, we note significant opportunities for cross-selling to large customers, which could be serviced by multiple stores in the CSSG group. On this basis, we assume a post-acquisition improvement in EBITDA (pre-central costs) margins from ca.8% to 14% once operating within the group. Indicative scenarios Below, we present indicative scenarios to demonstrate the potential impact of the proposed roll-up strategy. With a base case of five acquisitions per year of typical stores with £350k-£500k turnover, we project an ROI in excess of the company’s target 15%, with scope for this to improve with cross-selling, and an EBITDA run rate of £2.4m by FY27E. Indicatively, if the roll-up is slower than anticipated, we expect EBITDA to reach £2.0m by FY27E, if three sites are acquired per year. We project EBITDA of ca.£2.6m by FY26E, if the group could accelerate acquisitions to 10 a year" And the section on valuation, with a 92p current core valuation and an indicative valuation post-acquisitions of 119p: "Valuation The current market valuation of CSSG seems, to us, anomalous, when the accumulating cash deriving from the sale of Vigilant is taken into account. With the company’s market capitalisation currently standing at £9.6m (based on 13.7m shares in issue, Treasury Shares excluded, and a 71p share price), this is well ahead of the £2.1m actual net cash balance at end-FY23; and, indeed, the net cash forecast for FY26 equates to as much as 65% of the current market cap, assuming all payments for Vigilant are received. With this context taken into consideration, we feel on balance that EV/EBITDA is a better guide to value for CSSG at this point than the P/E ratio, while also noting the ex-cash P/E ratio of below 5x. Valuation based on organic growth prospects combined with cash Following this through, we premise our basic valuation for CSSG on our core EBITDA forecast, which is entirely driven by organic growth in the group’s existing businesses. Our forecast for the balance sheet includes the proceeds of the sale of Vigilant, with cash consideration expected to be received over the next approximately three years, bringing net cash at y/e F026E to £6.3m, prospectively. With no directly comparable companies operating in the locksmith and security centre market, we base our valuation on a broad group of operators in the wider security markets (listed in Table 9, below) together with a basket of stocks representing the overall Support Services sector, discounted to allow for size disparities, given the small size of CSSG. Based on a CY25E EV/EBITDA multiple of 5.8x (6.4x peer group average discounted at 10%), we arrive at a current core valuation of 92p (24% upside); noting that, in practice, variables around the reinvestment of the Vigilant proceeds will be a dominant element in the valuation in the future (see p. 15 below). On a final point, we note (a) the capacity for CSSG to operate with minimal net cash, and (b) its ability to borrow against freehold properties (£1.6m, as at June 2023, currently estimated to be ca.£2.0m)." |
Posted at 07/8/2024 08:34 by rivaldo In the current environment, with business premises and shops in cities all over the UK under threat from small groups of flag-waving extremists, I'd have thought CSSG's products and retailers would be doing rather well to say the least.Which would make CSSG even better value than it already is. |
Posted at 22/7/2024 11:03 by rivaldo Zeus Capital have summarised today as follows:"Strong cash position for roll-up This morning’s update from CSSG highlights positive trading in FY24E (year to June) together with a healthy cash position following the payment earlier this month of a £1.76m tranche in respect of the Vigilant disposal. CSSG has leading market positions and is increasingly a national player in the fragmented UK locksmiths market / security services / products. Having disposed of its former low-margin manned guarding business for a good price, the company has a real opportunity in our view to mop up the disaggregated UK market for its services, which in turn will enhance earnings and the valuation as increased efficiencies flow through. With now 16 centres, CSSG has already built a strong platform underpinned by efficient proprietary software. Fair value ignoring plans to translate cash into business (acquisition) opportunities is assessed at 92p (30% upside), but these plans do offer significant further upside beyond this in our view." "Well-positioned and a healthy market: With sixteen centres and effective technology, CSSG can capitalise on a security market which shows inherent growth as crime has continued to rise and historic cuts to police budgets remain a drag on crime resolutions. Well-placed to fulfil its core strategy: Sitting on £4m of net cash and with further payments on the way as highlighted above, we view CSSG as very well placed to exploit the consolidation opportunity inherent in the key market in which it operates, security centres for electronic security and locksmiths. It has acquired no fewer than seven sites since November 2022, and sees further M&A-based potential. Valuation positives: With further Vigilant receipts expected, forecast net cash is rising as a proportion of market cap (FY2025E forecast net cash of £6.3m will represent around two thirds of current market cap by the time all the Vigilant receipts are in), our forecasts ignore the company’s earnings enhancing plans, although we do in practice expect to see further deals. Fair value, ignoring these plans, is assessed at 92p (30% upside), but they do offer significant further upside beyond this in our view. See our note of May 16th for detailed commentary on the roll-out potential / potential synergies and an indicative valuation stretching to 119p." |
Posted at 22/7/2024 09:38 by rivaldo Agreed EC - in theory CSSG could have not far off the entire current m/cap in cash by the time the Vigilant payments have been fully received.Particularly as, quite rightly, Zeus's forecasts don't include anything for the recycling of the cash pile into more profitable acquisitions with the resulting increases in profitability and cash flows from synergies, new product introductions etc. A quick favour - would you mind updating/editing your thread header post as (1) CSSG sold Vigilant and have a new strategy and (2) the header is rather overlong and could be nicely shortened with the deleting of all your old updates which readers currently have to scroll down? |
Posted at 22/7/2024 08:28 by rivaldo Good to see a buy just now at 76p, i.e above the published 75p offer price.That 16th May coverage initiation sneaked past me too EC! Zeus's update today confirms 4.4p historic EPS to 30th June, and they have 5p EPS pencilled in for this year and a closing £5.1m cash pile. Using today's £4m cash pile, that puts CSSG on a cash-adjusted P/E of only 8.7. Zeus have a 92p price target, but they also state that CSSG "offer significant further upside beyond this in our view" to an indicative valuation stretching to 119p given the potential of the roll-out and synergies. |
Posted at 08/7/2024 07:20 by rivaldo Excellent news - £1.76m cash received means CSSG now have £3m+ of net cash against the £9.8m m/cap, even after January's acquisition, plus a highly profitable core business.Extremely undervalued imho. Time for a re-rating. |
Posted at 03/4/2024 07:17 by rivaldo Excellent news this morning of another NHS security systems contract win, not so much for the quantum at £0.4m but because it's a further example of CSSG spreading its wings through the NHS.As the RNS says, "Croma now service several NHS Trust's and healthcare providers". Once a company establishes itself in the public sector it's usually the case that a series of regional organisations or Trusts follow each other once a reputation is established. For the £9.4m m/cap CSSG this would be transformational alongside the expansion via acquisition propelled by the cash pile. |
Posted at 29/1/2024 09:53 by rivaldo WH Ireland are still waiting to produce new forecasts, but make some useful points:"Croma Security Solutions (CSSG) – Corporate – H1 update: rapid pace of growth; contract streams underpin; M&A offers good opportunities" "We are encouraged by the continuing positive pace of growth, which we view as both organic and acquisition based. On the score of organic growth, we note last week’s release by the Home Office of data relating to outcomes following a crime, which shows a further increase in the year to September 2023 in unsuccessful investigations (“completed without suspect”) to over 40% of total crimes, in addition to c.38% described as posing “evidential difficulties”, while criminals charged are under 6% (2014:17%). We anticipate that underlying demand for CSSG’s services will continue to grow." "We believe that many more consolidation opportunities of this kind are available for CSSG. It is important to note the cash available to the company to generate earnings enhancing growth through market consolidation, given that in addition to the last announced year end net cash of £2.1m, further substantial payments are to be expected in respect of Vigilant (£0.5m cash payment in March ’24 to be followed by a further nine payments of c.£0.4-0.5m each, plus the redemption of £1.3m of Vigilant shares anticipated for July 2024)." "WHI view: In addition to underlining the consolidation opportunity for CSSG, this morning’s update provides further evidence of the very reasonable prices that the company is paying for its acquisitions, with the most recent £0.4m consideration paying for a profitable two-site business and additionally including a site valued at £0.35m freehold. With sites typically turning over revenues in the range of £300-350k (though these can be more sizeable or smaller), we believe that the resources available to CSSG make a meaningful site acquisition programme, further expanding the national geographical footprint and offering operational gearing opportunities, very much within the company’s grasp. Also in this morning’s update, it is good to see the contract renewal with an NHS trust. Historically, CSSG has announced similar contracts, and combined with contracts with national cinema chains and other major clients, we believe that these renewals indicate a helpful strand of repeat earnings where the company is effectively well embedded with its clients." |
Posted at 08/6/2023 09:29 by rivaldo For the record here's WH Ireland's summary of the deal - the sale "looks to us like a good outcome for CSSG" on a historic EBITDA of 9.46:"Croma Security Solutions (CSSG) – Corporate – Successful disposal of Vigilant, subject to shareholder approval Market Cap: £7.1m Share Price 47.5p CSSG’s announcement this morning brings to a successful conclusion, subject to shareholder approval, the disposal process for Vigilant, its manned guarding operation, announced at the company’s AGM at the start of December last year (2022). The overall strategy behind the disposal recognises the disparity between the ongoing CSSG businesses (Security Systems and Locks) on the one hand and Vigilant on the other, and the relative lack of cross-selling opportunities between the sides of the business prior to the disposal. In addition, in terms of the fundamentals, notably, firstly, the ongoing businesses are higher margin operations than Vigilant, which operates at the upper end of the mid-single digit operating margin level typical of manned guarding businesses. Secondly, we note the consolidation opportunities which CSSG perceives in the wider locksmith market in particular, lending further logic to the deal from the company’s perspective. The company also updates on FY23E trading in the eleven months to June ‘23, which is said to be ahead both consecutively – H2-23E as against the half year to December ’22 – and on a full year basis, and across the business. Positive news, this suggests resilience / growth in the underlying markets for the ongoing group, with further market penetration a consistent theme. WHI view: In terms of the disposal price, CSSG has disclosed revenues, EBITDA and operating profit for Vigilant of £29.3m, £0.8m and £0.7m respectively for year to June ‘22. Given the effective overall sale price of £7.57m, based on a consideration of £6.5m plus inter-company balances of £1.07m, the implied historical ratio of 9.46x EBITDA looks to us like a good outcome for CSSG. Subject to details of the final deal structure, CSSG within the overall £7.57m will receive on completion either £3.4m or £2.1m in cash, with further cash payments starting at March 31st 2024 and over the following nine quarters. Following the recent Safecell announcement, the company has already announced its intention to continue to take advantage of the consolidation opportunities in its markets as it grows its national footprint, with further acquisition opportunities identified. With no forecasts in the market at this point, we await developments post-the General Meeting announced for June 30th." |
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