I'm not doing very well here. The trading statement says "no debt and cash", not "net cash"!
Looking at my projections, I had projected cash of £4.3m at H1, so they are actually not far short and the difference could be nothing more than working capital "noise". |
Further on cash, the full-year results showed "cash and cash equivalents" of £2.14m whereas the recent trading statement flagged "net cash" of £4.1m.
Since there is no debt to net off cash, I would guess that they have netted off lease liabilities. These were £0.6m at year-end.
This seems to be deemed the correct treatment from a purist accounting point of view, even though from an investor's perspective it is nonsense.
I'll contact the company to see if I can get confirmation. |
Yes, you're quite right and I'm quite wrong.
Part of the "missing" cash is the dividend (£0.3m). |
I don't think cash is that good IMHO. After 30/6/24 when cash was indeed £2.14m the RNS, below, stated that a further £1.76m and £450k was subsequently received. So that's £4.35m in total.
We've since received another £400k from Vigilant.
ON Nov 30th AGM statement said we had £4.1m and the same on 31/12.
So where has over £500k gone? I haven't seen any significant acquisitions announced.
"Strong balance sheet with cash and cash equivalents of £2.14 million (FY23: £2.14 million) and on 6 July 2024, a further £1.76 million including interest was received in relation to the sale of Vigilant and a further £0.45 million in September 2024." |
Encouraging announcement this morning.
They have received a further quarterly payment of £0.4m for Vigilant since the year-end results, so that risk continues to slowly run off.
Cash at year-end was £2.14m and is £4.1m in this statement. Adjusting for the Vigilant payment, that means that they have generated £1.5m from operations in H1, which is pretty impressive for a business valued at £12m.
Now we just need to see that cash being put to good use through bolt-on acquisitions. |
I agree with all the positive comments which have been made about Croma recently.
The one small concern I have is that Vigilant still owes Croma £2.9 million over the next 7 quarters (effectively 2 years).
Remembering that Sebastian Morley, the previous Croma chairman who in my opinion achieved nothing while running Croma for many years, bought Vigilant, we have to hope that he makes a sufficient success of Vigilant to repay the outstanding amounts still due.
Other than that it all seems generally good news. |
Cheers penpont. It's worked out rather well so far - hopefully it won't be long until we hear about more acquisitions from the cash pile. |
Hi rivaldo - maybe not so good as it was a top-up from me!
I still think it's well undervalued at that price, and btw thanks to you and others
for the thread info that helped lead me to this one. |
Good to see a 9,533 share buy at 91p just now - a full 1p above the 90p published offer price. |
well, recently it has risen 20p/share
beats the 2.3p/share divi, 'hands down'! |
Given it is a small AIM stock I am already holding too many of these for it to be a good idea to buy more, but 130p seems like a perfectly reasonable target for 2025. If they can carefully use the cash to buy assets yielding 20% plus then that likely increases. I just hope they don't go crazy with capex as that needs to be factored in to any purchase price on new locksmiths. |
 A very confident AGM statement, particularly bearing in mind there was no trading statement at all from last year's AGM. Given today's positivity it would seem there's something to shout about....
Current trading is good:
"From the outset of the current financial year, trading has been positive and in line with market expectations with good levels of organic growth across our core markets in the education, utilities, health and leisure sectors. Customers are seeking both traditional security services and more complex, integrated solutions reflecting a general demand for greater security in today's risk-conscious environment."
Against an £11.4m m/cap, CSSG has "has a strong balance sheet with no debt and cash of £4.1 million as at 30 November 2024 with a further £2.9 million due from the disposal of Vigilant."
And an acceleration in growth is on the cards given (a) the introduction of Martyn's Law and (b) the "good pipeline of opportunities to acquire profitable locksmith stores some of which are close to completion. These stores will be transformed into modern security centres, boosting the Group's revenue and customer base, and adding to the overall network of centres". |
Happy with that AGM statement. Dividend of 2.3p too. |
Sorry, wrong thread! |
[Post from wrong thread] |
Yes good to see. AGM on Wednesday. |
Nice bit of Monday morning buying having a decent effect on the share price. |
Zeus forecast 5p EPS this year, up 28% from last year.
That's a PEG of only 0.59, which is bargain territory in itself.
The P/E of 16.6 might be considered ambitious if taken on its own - until you take into account the current £4m+ cash pile, which is forecast to rise to £5.1m, i.e 45% of the current £11.2m m/cap.
Of course (and hopefully) a decent proportion of that cash will likely be spent on earnings-enhancing acquisitions to convert into fully fledged security centres.
So imo there's still good upside from here. Zeus have a current fair value of 92p with upside to 119p, and as CSSG crystallise their promised pipeline of potential acquisitions that current fair value should increase. |
I've caught up on the investor presentation and updated my valuation model now. I reckon it's fairly valued around the current price (I get 79.4p) based on the existing business and the accumulating cash.
The key to unlocking further value is obviously converting that cash into locksmith/security centre assets purchased on low EBITDA multiples. It's disappointing that there has been no tangible progress here since the very start of 2024. They talked a good game on this at the investor presentation but really do have to start delivering. |
I echo Rivaldo and would add:
- some confusion re ROI on new sites whether including or excluding real estate. Without c. 40% and with 15% min. The site is an important part of local goodwill - if moved, sales reduce
- interesting discussion on Croma value add re increased sales, reduced direct and indirect costs
- bullish about M&A in next 12 months and beyond (current year bedding in, building pipeline and making sure have cash)
- positive about long term future (100 units?), v. clear not on AIM to be a lifestyle business
- also bullish about Ajax (Europe No 1 alarm)
Very small and niche, but I am more positive about growth prospects. |
Appreciate it, thanks. |
No probs EC. It was noted that the new strategy started relatively carefully last year with just a couple of transactions, but that this will ramp up to 3-5 acquisitions this year and (from memory) potentially more given the strong pipeline and CSSG's position as likely the only buyer around. |
Thanks, rivaldo. I couldn't make today's presentation but will catch up with the recording later in the week.
That all sounds very positive but I have found the lack of any transactions disappointing. Was there any discussion about that? |
Brief notes from this morning's presentation:
- revenues could be £20m-£25m within 3 years, but could exceed that too
- expansion will be in Fire & Security as well as Locksmiths
- NAV is 112p per share
- the cash pile is now £4.4m, up from the "over £4m" quoted at 1st November
- the 15% ROI target from new stores is a minimum, whereas actual is more like 40%
- typically acquired store revenues will be from £0.2m-£1m
- iLoq is now in 1,200 student accommodations, with discussions under way for more
- Fire & Security should be boosted by Martyn's Law, now in its final stages and introduced after the Mancheter bombing, which aims to keep the public safe in any venues with more than 100 people, including schools
- CSSG get at least 5% better prices via discounts etc than their smaller competitors |
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