22 October 2018

Croma Security Solutions Group Plc

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

Final Results for the Twelve Months to 30 June 2018

Increased investment in Security by government and private enterprises

behind uplift in sales & profits

Croma Security Solutions Group plc, the AIM listed total security services provider, announces its final results for the twelve months to 30 June 2018.

Substantial uplift in sales and profits

·     59% increase in revenues to £35.1m (2017: £22.1m)

·     Significant rise in EBITDA to £2.5m (2017: £0.80m)

·     Substantial increase in pre-tax profits to £1.98m (2017: 0.36m)

·     Substantial increase in earnings per share to 9.89p (2017: 2.13p)

·     Paid and proposed dividends up to 1.6p (2017: 0.5p)

Real and perceived increases in security concerns behind record trading performance

·     Strong demand for total security solutions from private enterprises and government bodies

·     Organic growth across the main operating divisions

·     Croma Vigilant - sales increasing by 77%:

o    over 1,000 security personnel;

o    secured an increase in the number of long-term contracts; and

o    now providing community policing support in London under the Community Safety Accreditation Scheme.

·     Croma Systems and Locksmiths - sales increasing by 9.6%:

o    a good performance with demand for products across the division;

o    particularly strong performance from the Locksmiths retail chain; and

o    new opportunities for the Group's FastVein (Biometrics) technology.

Outlook for FY 2019

·     Good to start to the financial year with an increase in contracted revenues

·     Look to maintain progressive dividend policy for FY 2019

Sebastian Morley, Chairman of CSSG, said:

"This has been an exceptional year for our business. Demand has increased on the back of real and perceived security concerns and critically for Croma we are benefitting from this but also increasing our market share. Our offer has evolved to become a total security solution which when delivered by our teams of ex-military personnel is proving to be compelling.  Our financial results have been helped in this year by some large one-off projects, even so, our ongoing trading performance backed by an increase in the number of long-term contracts is more than double two years ago which is reflected in the Board's confidence in recommending a final dividend of 1p per share, bringing the total for the year to 1.6p per share, which is a three-fold increase on the prior 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

Novella                                                                                                                Tel: +44 (0)203 151 7008

Tim Robertson

Toby Andrews

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

This has been a highly successful year for the business and I am delighted to report Croma Security Solutions Group Plc's ("Croma" or the "Group") Final Results for the 12 months to 30 June 2018, which show Group revenues increasing by 59.2% to £35.1m and Group EBITDA increasing by more than three times to £2.5m, a very strong financial performance driven by a number of factors which bode well for our future.

Demand across the UK for security solutions from both the private and public sector has grown significantly. Institutions have responded to the perceived and real increases in crime and terror occurrences and together with government bodies are choosing to outsource security. Alongside this growth in demand, Croma is winning an increasing share of the security market as institutions opt for a premium service delivered by our team, run with a strong ex-military ethos.

While FY 2018 has been flattered by unusually high levels of project work, the overall trends are positive, and the current year will benefit from an increase in levels of ongoing contracted revenues together with a more normalised level of project work.

Premium Positioning

Our success in winning an increasing share of our market comes from being able to provide total security solutions for large corporations and institutions utilising some of the most advanced and innovative security technology available to the commercial market. Perhaps most importantly, and distinct from any other competitor in our market place, Croma's premium service is delivered under the control and direction of ex-military security professionals. The contrast with providing capable, well trained and highly motivated officers compared with the more traditional model of the low paid and lowly motivated officer, is stark. Once this is put into today's security context, it is understandable why an increasing number of clients are opting for Croma's premium service.

In addition, the Group's understanding and ability to incorporate commercially available security technology (which tends to lag behind military grade technology) is another key competitive advantage.

Trading Performance 

All main divisions have performed well in the year under review, delivering significant increases in organic led growth.  Financial prudence and responsibility are central to our ongoing strategy in order to shape an outstanding security services group that delivers for clients, staff and shareholders. 

Delivering a significant 77% uplift in revenues, Croma Vigilant, our manned guarding division has had a very good year. Our strategy of providing ex-military professionals to protect the assets of our customers has worked well and we are seeing the benefits of our growing reputation for providing a reliable and a premium level of service. Growing customer trust is enabling us to increasingly position ourselves as a total security solutions provider so that we can bring in expertise from other parts of the Group to existing Croma Vigilant clients. In addition to providing manned guarding solutions, Croma Vigilant also provides complementary police services to local councils under the 'Community Safety Accreditation Scheme', a growing incremental revenue stream.

A combined 9.6% increase in revenues for Croma Security Systems and Locksmiths demonstrated the increasing demand for innovative technical security solutions.  During the year, this division benefitted from a strong performance by Croma Locksmiths, a retail chain acquired in 2015 together with winning a significant new 3-year contract with a major UK utility company. Croma Biometrics remains a significant opportunity for the Group with FastVein™ coming to the forefront as a potent biometric high-speed human identifier.

The focus of the Group remains that of delivering sustained growth by our unique offering to the security market. We aim to be a Group apart, a true one stop offering where clients can have all of their security requirements serviced by one vertically integrated Group. The security market remains fragmented and flat footed and we aim to capitalise on this by outstanding service delivery and aggressive marketing.

Dividend

Reflecting the excellent financial performance over the year the Board is pleased to recommend a final dividend to shareholders of 1.0p per share (total 1.6p per share for the year) and subject to approval at the Annual General Meeting to be held on 28 November, the final dividend will be paid on 30 November 2018 to all shareholders on the register at the close of business on 9 November 2018. The shares will be marked ex-dividend on 8 November 2018.

Outlook

Given the platform provided by the significant improvement in the financial performance and trading position of the Group over the last two years, the Directors believe the outlook Croma is extremely positive. 

In the current financial year, we can expect to replicate some but not all of the project income we received in FY 2018 due to some large exceptional projects that are unlikely to be repeated.  However, there has been a substantial increase in contracted income and this together with the expectation of some further project work make the Board confident of achieving a good result for the year, consistent with the underlying growth in the business.

Finally, I would like to thank all employees of the Group for their tremendously hard work over the last year and I look forward to working together again this year to achieve another excellent performance.

Sebastian Morley

Chairman

22 October 2018