REG - Croma Sec. Sol. Grp - AGM Statement, Potential Divestment, Board Changes

Croma Security SolutionsAnnouncement

06/12/2022 07:00

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RNS Number : 6739I  Croma Security Solutions Group PLC  06 December 2022

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

 

6 December 2022

 

CROMA SECURITY SOLUTIONS GROUP PLC

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

 

 AGM Statement, Potential Divestment and Board Changes

 

 

Croma Security Solutions Group Plc provides an update on trading and announces
the proposed divestment of the Vigilant subsidiary, and resulting changes to
the Board, in advance of its Annual General Meeting ("AGM") being held at
14:00 p.m. today.

 

Trading Update

Trading since the announcement of its results for the year ended 30 June 2022
on 11 November 2022, has continued in line with management expectations.

 

The Board's strategy to acquire locksmith businesses around the country and
develop them into security centres is showing good results. Despite an almost
a two-year hold on the strategy due to the pandemic, the Company is now seeing
multiple opportunities that fit this strategy, including several direct
approaches from other operators in the sector keen to form part of a larger
group.

 

The previous acquisitions of Safeguard and Southern Stronghold in November
2021 and July 2022 respectively, have performed and continue to perform well.
Through consolidation and the implementation of our in-house software,
developed to specifically automate processes, the Company has seen improved
margins within these businesses, which might otherwise have experienced a
downturn in these challenging trading times.

Our investment in the 'Future of Locking' with our partner iLOQ is beginning
to show results this year and we have several further opportunities to
develop. Croma is leading the way with the early adoption of this highly
innovative technology that is set to change the locksmithing industry.

 

Divestment

 

As reported in the final results announcement released on 11 November 2022,
the Vigilant guarding division has secured a number of contracts wins in the
current financial year that will be ready to commence in the New Year, and
costs that have been incurred in securing the contract wins will soon begin to
bear fruit.  Nevertheless, the strategy of combining Locks and Systems with
the Vigilant manned guarding division has not generated the opportunities for
cross marketing and cross sales that had been expected.

 

The Board therefore announces that it has decided to re-focus the Group's
future strategy around the development of the businesses of Croma Locksmiths
Limited and Croma Security Systems Limited (together "Locks and Systems")
where margins are high and cash generation remains strong and where it
believes there are good opportunities for profitable growth. As a result of
focussing on Locks and Systems, the Board has decided to divest itself of the
Group's manned guarding business, Vigilant Security (Scotland) Limited
("Vigilant"), if an appropriate offer can be secured. Vigilant's management
team, led by its Operations Director Paul Williamson (also an Executive
Director of the Company) supported by its Managing Director, Sebastian Morley
(also Executive Chairman of the Company), (together the "Buy-out Team"), has
indicated its desire to acquire Vigilant from the Group.

 

In order to pursue this acquisition, Sebastian Morley and Paul Williamson have
agreed to step down from the Board at the end of the AGM being held later
today.

 

Discussions about the proposed divestment of Vigilant from the Group to the
Buy-out Team are at an early stage and there can be no certainty that CSSG
will complete a disposal to the Buy-out Team or any other party. If the
proposed divestment of Vigilant were to proceed it would be classified as a
fundamental disposal under the AIM rules and, as a result, would be subject to
shareholders' approval.

 

Board Changes

Mr Paul Williamson (Executive Director of the Company) and Mr Sebastian Morley
(Executive Chairman of the Company), will step down from the Board with
immediate effect following close of the AGM in order to pursue the proposed
acquisition of the Vigilant subsidiary from the Group, as set out above.

 

Nicholas Hewson, Non-Executive Director, will be appointed Non-Executive
Chairman with immediate effect following the close of the AGM, being held
later today.

 

 

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

 

Croma Security Solutions Group Plc
                      Tel: +44 148 956 6100

Nick Hewson (Chairman)

Roberto Fiorentino (CEO)

 

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

(Nominated Adviser and Broker)

Mike Coe

Sarah Mather

 

Novella
                         Tel: +44 (0)203 151 7008

Tim Robertson

Safia Colebrook

 

 

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