25 May 2012

Maiden profit from Croma

10/11/2009 Robert Tyerman

Security specialist Croma Group focused ‘ruthlessly’ on cutting costs to make its first profit since floating six years ago

Security specialist Croma Group focused ‘ruthlessly’ on cutting costs to make its first profit since floating six years ago

Avionics and security systems specialist Croma is contemplating funding expansion after turning a £494,300 annual loss into a £11,711 pre-tax profit.

The Fife-based company achieved this turnaround — before a tax credit took the final profit to £53,000 — in the year to June on turnover 8.4 per cent lower at £6.5 million. Chief executive officer Sebastian Morley, who sold his own business Vigilant Security to Croma in 2006, says the company has closed or restructured previously loss-making operations, streamlined itself into two divisions, personnel and equipment, and focused ‘ruthlessly’ on cutting costs, with the result that Croma has made its first profit since floating on AIM six years ago.

Chairman Nick Hewson says the company has obtained High Court approval to write down its nominal capital from 5p to 0.1p a share. He says this will allow it to pay future dividends out of retained earnings and ‘gives the board an opportunity to review all its current financing arrangements’.

Under consideration is a possible £130,000 share placing with directors, who, says Morley, will be ‘exploring value added corporate activity’. Floated at 5.5p in 2003, Croma shares now trade at 1.75p, valuing the company at £3.1 million and shareholders can only hope the improvement is maintained.

Tags: AIM, Dividend, Restructuring, Turnaround

Sector: Aerospace & Defence

Companies: Croma Security Solutions

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