1 March 2021 

Croma Security Solutions Group Plc

("CSSG", "Croma", "the "Company" or the "Group")

Interim Results

A Stable Performance with Strong Cash Generation

Croma Security Solutions Group plc the AIM listed total security services provider announces its unaudited interim results for the six months to 31 December 2020.

Sebastian Morley, Chairman of CSSG, said:

"Having established new work practices for our security teams to operate safely during the first lockdown, we were confident, entering the new financial year in July 2020, of our ability to continue to operate safely, successfully and profitably. Naturally, the retail side of our business was the area most impacted by the ongoing pandemic which masked an increase in demand for our services to guard physical assets. This translated into a stable H1 trading performance with revenues slightly lower by just 6% to £16.36 million. Overall, the business is well placed being profitable, and having a high cash balance of £3.9 million which could support opportunistic acquisitions arising in the future out of the current crisis."

A solid, profitable performance

·    Demand for Croma's innovative security solutions remains strong

·    Revenues stable at £16.36m (H1 2019: £17.36m)

·    Generating EBITDA of £0.86m (H1 2019: £1.1m)

·    Other than lease liabilities, the Group remains ungeared with cash balances up significantly to £3.9m (31 December 2019: £2.3m)

·    No interim dividend proposed, as a prudent measure, and instead waiting to complete the financial year

Increased demand for guarding of physical assets and recovery post lockdown 1

·    When measured against the six months ended 30 June 2020, revenues from manned guarding increased by 6%, with increased demand for temporarily closed premises

·    Our Systems and Locksmiths businesses, which were impacted more heavily by the first lockdown, also posted impressive sales revenue gains, up by 31% vs six months ended 30 June 2020

·    Croma PROception the ground-breaking front of house business, continues to win new mandates

·    Strategy to establish a national chain of security stores remains unchanged

Outlook

·    Positive trading patterns have continued into the second half of the year

·    Well placed for a satisfactory result for the year

For further information visit www.cssgroupplc.com or contact:

Croma Security Solutions Group Plc                                                                         Tel: +44 (0)7768 006 909

Sebastian Morley (Chairman)

WH Ireland Limited                                                                                                    Tel: +44 (0)207 220 1666

(Nominated Adviser and Broker)

Mike Coe

Jessica Cave

Chris Savage

Novella                                                                                                                           Tel: +44 (0)203 151 7008

Tim Robertson

Fergus Young

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulations No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations

Chairman's Statement

Introduction

I am pleased to report Croma's interim results for the six months to 31 December 2020 which saw the Group generate revenues of £16.36 million and EBITDA of £0.86 million. Given the backdrop of disrupted trading conditions this was another good performance in a challenging period for all operating divisions. Our 10 retail stores were either closed or operating under restricted hours during lockdown periods, which together with lower consumer mobility meant retail sales were reduced. Conversely, demand for our security services particularly for the safeguarding of physical assets such as temporarily closed premises, has increased.  The events of the past 12 months have not changed the positive fundamentals of our businesses and we remain focused on establishing Croma as the British security brand.

Group strategy

It may be that some of the consequences of the pandemic will support the Group in its strategic objectives aimed at:

·    setting new standards in providing premium guarding services, community awareness schemes and innovative front of house solutions under the Croma Vigilant and PROception brands;

·    building a national network of Croma Security Centres, through which all the Group's services are sold; and

·    becoming the British security brand.

The UK security market is made up of a large number of smaller enterprises which may have come under financial pressure due to the pandemic.  This could accelerate the Group's ability to act as a consolidator in the sector.  There has already been a substantial increase in the number of companies approaching the Group seeking to open discussions and this has added to an existing pipeline of opportunities under consideration.  That said, the Board will always take a prudent approach to expansion, carefully balancing all future investment against possible risks.

Underlying market trends continue to be supportive of the Group's strategy.  There remains a high focus amongst private and publicly funded enterprises to ensure the safety of buildings and people against real and perceived increases in security risk across the UK. This is translating into higher demand for the Group's premium services.

Croma has always operated with a strong military ethos and a focus on security personnel being a part of a premium service in which individuals are well trained, well-motivated and well paid. This combined with the innovations in security Croma is introducing such as PROception is positioning the Group well to increase its share of the growing premium security market.

Croma Vigilant

Croma Vigilant is the largest part of our business providing manned guarding for assets and individuals.  Employing over 950 high-grade security personnel throughout the UK who have collectively performed extremely well continuing to guard people and assets as well as incorporating a wide range of new safety measures to defend against the transmission of Covid-19.  We believe by continuing to maintain our levels of premium services while adapting to significantly increased personnel absences due again to the pandemic, reflects very positively on the people and the organisation of this division.

Alongside, adapting to operating under the restrictions imposed by the pandemic, Croma Vigilant has continued to successfully pursue new business opportunities.  New contracts have been secured to protect temporarily vacant premises and a significant new contract has been secured by PROception, the Group's innovative front of house security service which is generating significant commercial interest.

Reflecting the prevailing trends in the market, an increasing proportion of this division's income is now contracted which increases visibility over future earnings and enhances our ability to invest for the future.

Croma Systems & Locksmiths

Croma Systems & Locksmiths, the provider of a range of innovative security technology services including CCTV, Intruder Alarms, FastVein (Biometrics) and high security locks, delivered a resilient performance, given the restricted circumstances. Currently, this division is operating through 10 security centres some of which were closed or operating reduced hours during lockdown periods.  The security centres are all operating under the Croma brand and are marketing, under one roof, the entire range of the Group's services.

Financial Review

Revenue decreased by 5.8% for the six months to 31 December 2020 to £16.36m (H1 2019: £17.36m).

Cash balances at 31 December 2020 are £3.9m (30 December 2019: £2.3m).

Other than lease and short-term trading liabilities, the Group remains free from borrowings.

Dividend

Reflecting the current environment and the continued uncertainties in connection to the global pandemic, the Board has decided not to pay an interim dividend and will instead decide on the level of the final dividend payment for this financial year on completion of the 12-month period.  The Board views this as a prudent approach to managing against any further delay to the expected recovery from the epidemic.

Outlook

Our belief is that the Group is well placed and will emerge from the current pandemic in a good position.  The fundamentals of our businesses have been unaffected by Covid-19 and only sales from the retail side have naturally reduced given temporary store closures and reduced consumer mobility.  Other than lease liabilities, the Group  remains ungeared with significant cash assets.  These factors, together with some interesting opportunities which have emerged because of the pandemic, combine to give the Board confidence in the outlook for the Group.

Sebastian Morley

Chairman

1 March 2021

CROMA SECURITY SOLUTIONS GROUP PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR 6 MONTHS ENDED 31 DECEMBER 2020

CROMA SECURITY SOLUTIONS GROUP PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 31 DECEMBER 2020

CROMA SECURITY SOLUTIONS GROUP PLC

CONSOLIDATED STATEMENT OF CASHFLOWS

FOR 6 MONTHS ENDED 31 DECEMBER 2020