Market's view on Croma Security
Published on April 2024
- CSSG received the first payment of over £500k from Vigilant as scheduled on 28 March 2024.
- A stock watcher suggests CSSG could provide a non-regulatory news service (NRNS) update for significant payments to boost investor confidence.
- The expectation for CSSG’s market performance includes a 30th percentile market PE ratio valuation at 86.5p, assuming all payments from Vigilant are timely.
- WH Ireland is set to resume forecasts and full coverage of CSSG, noting the company’s alignment with management plans, a healthy net cash position of £2.1m, and expectations of further substantial payments from Vigilant.
- The terms of the Vigilant deal include a total of ten payments, with the first payment of approximately £450,000 due nine months post-deal completion.
- Another NHS security systems contract valued at £0.4m was secured by CSSG, highlighting its expanding influence within the NHS and the potential for transformational growth.
- Recent trading updates have been positive, with a reported net profit increase of 18% in H1, and CSSG is actively pursuing acquisitions, having recently acquired two profitable locksmith businesses.
- Analysts are encouraged by CSSG’s growth both organically and through acquisitions, with a rapid pace of growth and contract streams that underpin future performance.
- CSSG’s acquisitions strategy includes the purchase of companies at reasonable prices, which offer operational gearing opportunities and expand its national footprint.
- The company’s strategy includes a consistent push for acquisitions, with several more under consideration, demonstrating a robust pipeline and potential for significant scale-up.