Excellent - CSSG have a new major shareholder.
Russell Long has bought 872,054 shares and now owns 6.4% of CSSG:
Mythril LLP, of which he's a member, holds 400,000 of these shares. They appear to have almost £10m of net assets, so reasonably substantial: |
If Vigilant can't afford to pay the full £7.xm and CSSG then have the right to "step in", they're not stepping into something very desirable, one might think! |
CSSG have already received £2.14m of cash from the buyers of Vigilant. The likelihood on any reasonably optimistic view of the future is that the rest will be paid, particularly as on any default CSSG have the right to step in and take control of Vigilant.
Vigilant made £0.7m operating profit last year and only £0.28m EBITDA in H1'22 due to investment in the large new contract win. Given this, £7.6m appears to me to be a rather good price for a company in Vigilant's sector, and a bird in the hand for CSSG rather than waiting for new contracts to pay off. |
Was the price they got for Vigilant really so miserable? I guess with some of those long term contracts they signed recently the future could be bright for them but then by the same token I thought a number of their contracts were also coming up for renewal so there's also some uncertainty. |
 "We now know that this £7.6m m/cap company, which already had £0.65m net cash, will now receive over time a further £7.6m"
Sadly this simply isn't true. Just rampy nonsense IMO. Exchange the "will" for "may" and it's perfectly reasonable IMO.
If those receipts were 100% certain, why on earth did they sell Vigilant for such a miserable price? At least some of those receipts depend of the survival and sufficient success of Vigilant...
"The Consideration will be satisfied as to (i) £1,073,314 payable in cash on Completion; (ii) £4,126,686 by the issue of the Loan Notes; and (iii) either (at the Buyer's sole discretion) the payment of an additional £1,300,000 in cash on Completion or the issue of the Redeemable Share on Completion. In addition, inter-company balances of £1,067,913 owed by Vigilant to the Company will be settled on Completion. Therefore on Completion the Company will receive in aggregate cash of either £2,141,227 if the Redeemable Share is issued or £3,441,227 if the Redeemable Share is not issued." |
Another 110,000 shares just gone through at 45p - I assume another buyback. |
RNS just out - a whopping buyback of 400,000 shares at 45p should be good news for the EPS going forward assuming the "strong" trading previously reported is continuing.
I note that the shares bought back might be used to part fund future acquisitions, so hopefully more corporate action is on the cards: |
Good news - the Vigilant sale has completed smoothly.
We now know that this £7.6m m/cap company, which already had £0.65m net cash, will now receive over time a further £7.6m with between £2.1m and £3.4m receivable immediately.
Plus we already know that trading has been "strong" this H2 and the period to 30th June will report good figures ahead of last year.
Mucho undervalued imho. |
Who sells 22 shares in Croma? With trading costs I don't think you would get any money back. |
So what's going on? A sell sends the share price up 1.6p why? |
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." |
First payment for selling the Vigilant subsidiary.
When should that be in the bank account of CSSG ? |
...bull and bear opinions....no problem with that
but can we phps all try to put the past behind us and all be polite from now on. |
charming, not !! |
Notwithstanding what others have said about the terms of the deal / possible mates' rates etc., this would still seem to be a real opportunistic valuation if all goes ahead and they're right about the opportunities presented by the remaining higher margin areas of the business?
Will have to make acquisitions though as the remaining parts' current turnover would be too nothingy? |
I took a look at the AR and it looks like most of the £1.093 was actually spent on acquiring freehold property, presumably due to the expansion of the locksmiths business. It doesn't look untoward to me. |
Effortless. Don´t you have a big position here? Don´t be sulky and slag me off. You yourself noticed some unexplained funnies in the cash flow (see below). This was enough for CSSG to become a bargepole for me. It was about 85p/share at the time. If you´d followed your nose you´d have saved a packet. Bulletin boards are sadly lacking those with the skills to see bad stuff coming. It´s only the idiots that post all the bull stuff. Grow up and learn IMO.
"9 Mar '22 - 07:48 - 309 of 373
Yes, a decent announcement this morning. H1 revenue was ahead of my "expectations" (an educated guess, really) but PTP was a bit behind.
Cash was about £1.5m lower than I expected, mainly due to a £1.093m on the "purchase of property, plant and equipment". This is odd, as it is over 4x higher than in expenditure in this area in any prior half year, and I can't see any explanation of it in the announcement. I'll see if I can get further information on this from the company." |
Exactly, ALS. EezyMunny a waste of bulletin board space. |
If vigilant doesn't generate any cash post sale and goes broke then I suppose we should be grateful that at least we got 2 or 3 million for it when we could. |
fair point phps
but
the dirs. of Vigilant will have invested in it & will want it to be profitable, to pay their wages etc & to phps make a capital gain by selling it in the future.
the buyers of Vigilant will work to try to keep it profitable, & trading well in last 18 months. |
Errr if Vigilant doesn´t produce any cash to repay the loan notes then it presumably won´t be worth anything much! Step-in rights to a waste of corporate space! |
EezyMunny,
Anyone using their brain would have read the announcement thoroughly before posting here:
"In the event that the buyer defaults on any one payment due to the company under the loan notes the company shall have step-in rights to assume control of Vigilant at board and shareholder level" |
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