Croma Security wins £6.1m of new annual contracts

15th Sep 2022 15:24

(Sharecast News) - Croma Security announced four new contract wins worth £6.1m in annual revenue on Thursday, equivalent to 17% of total group sales.

The AIM-traded firm also said it was expecting to deliver EBITDA of at least £1.5m for the financial year recently ended.

It said its manned guarding division, Croma Vigilant, won a competitive three-year contract with a "major" unnamed London property manager, worth £5m per annum.

The "substantial contract" would see Croma Vigilant provide manned guarding services across a portfolio of commercial properties in central and greater London.

In addition, the same London property manager awarded Croma Vigilant's 'PROception' business a three-year contract, worth £0.5m per annum, to provide its front-of-house services incorporating the building's reception into the overall security strategy.

The contracts together were worth £5.5m per year, and both had the option to be extended for another two years.

Croma said the third contract, also won by Croma Vigilant, was a three-year security contract to provide manned guarding services for a large retail space in the North East of England, worth £0.4m annually.

The fourth contract was for the 'iLOQ' product, and worth £0.3m per annum together with ongoing maintenance support fees.

Croma described the customer as a "well-known" UK company in the education sector, with the order expected to be the first in a series .

It said iLOQ is a battery free digital door lock opened by smartphone, powered by the mobile phone opening it.

In October last year, Croma formed a strategic partnership with Finnish company iLOQ to be the primary distributor and service operator of the product in the UK.

The firm said the order would be its first major installation in the UK.

Looking at its trading, the company said it would announce results for the 12 months ended 30 June in late October, and expected to deliver EBITDA of at least £1.5m.

The board said the year was one of investment in technology and new service offerings, with a focus on training, particularly for the installation of the iLOQ product, and the retention of key staff.

Croma said that investment "naturally impacted profitability" in the short term, but also positioned the business to be able to anticipate the needs of customers in the post-pandemic market, as shown by its recent contract wins.

In addition, the 2022 results would include a provision for £0.1m against a possible bad debt, which the board said could prove to be "overly prudent".

"These contracts taken together are substantial for our business and reflect the significant investment that has gone into ensuring the company is well positioned to win such awards," said chairman Sebastian Morley.

"The perceived additional value of PROception's services by customers is amply demonstrated with this combined win and the iLOQ win is perhaps a signal of further contracts to come now we have a trained team in place, to support customers on a national basis.

"Overall, the business remains financially robust with a strong balance sheet and is well placed to continue to move forward in this post pandemic market."

At 1401 BST, shares in Croma Security Solutions Group were up 6.25% at 68p.

Reporting by Josh White at Sharecast.com.