AGM Statement, Potential Divestment, Board Changes
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 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.
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.
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)
Novella Tel: +44 (0)203 151 7008