Moving up once again, on no trades as yet so probably another larger buy will again be reported late. |
That's an unusually large Buy of 20,000 shares at the full 85p offer this afternoon.... |
Starting to get some traction at these higher levels, should be over £1 with strength of balance sheet, and trading performance. |
Hello - a series of small buys, and now the share price has broken out to new 18-month highs.
Interesting :o)) |
Good link, cheers. Interesting to see the repeated references to "continued growth". |
The slow crawl upwards continues....and we have news :o)) |
A mere 10,000 shares bought at the full 80p offer price or just under has caused a 3p rise and a big closing of the spread..... |
Good to see the price continuing to move up with the spread widening - not much stock around perhaps (or even less than usual).
Maybe one or two larger buys will be reported later. |
In my book this is way undervalued by the market, not the most inspirational management but very steady. A frustrating company, but more the fact that due to its size it is virtually unheard off, and the fact that they could do with a broker like Numis, a bigger hitter albeit but likely more expensive. Throws off consistent results, simply too small to be noticed. |
Quite busy today - 6 transactions already :o))
Good to see a 3p move up on only £8k or so of buys at around the prior full 75p offer. |
I suspect they will make some kind of announcement regarding the dividend, like last year, prior to results in August. Even maybe a return of capital via share buyback or special dividend. But I would rather they stop fannying around and think about expanding the security centre side of the business, there have to be numerous areas in the UK which could prove to be beneficial to the bottom line in our overpopulated and crime ridden country. |
Closing the gap from previous sharp rise, just can not get a handle! |
Surprising that this company cannot come up with ways to improve shareholder value, they are clearly cash generative and sooner or later someone will buy this up with a view to grow the security centre side of the business. I just hope management do not make any stupid misteps, they seem good to trundle along at their own speed but are they capable of growing this business, indicators do not look particularly promising. With the high cash balance and decent contracts in progress it must be a sitting duck. |
Nice 75,000 share buy at 80p just reported.... |
 Cheers EC. As you say, I think those forecasts are prudent. In particular I believe the cash pile will be much higher than £4.65m, unless of course there's an acquisition or two.
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." |
Header updated with new projections and valuation based on today's trading statement. |
May reach out to them soon... |
I'd add 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 newfangled methods of engagement like Investor Meet etc. |
I would say they are simply overlooked. There is no proper broker coverage (no forecasts), RNSs are infrequent, the management make no effort to engage with PIs and the business is too small for meaningful institutional interest. Liquidity is poor, too, so it is hard to build a meaningful stake. |
Why are they so cheap? No debt. Half mcap cash. Profits. £11m mcap? |
I was £44k down on these at the weekend, but I'm glad I stuck with them. Indeed, I've added a further 12,500 shares this morning, on the back of this update. If they can now start to grow top line at a decent rate, they really do have huge potential to multibag. |
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." |
Agreed, a great announcement this morning. EBITDA about £400k ahead of my forecast in the header and net cash £1.7m higher. These are big beats considering the tiny market cap of this business. |
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