Croma Security Solutions Group plc (CSSG) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Croma Security Solutions Group plc Annual General Meeting 2024. [Operator Instructions] I'd now like to hand over to members of the Board. Good morning.

Good morning. Thank you, Mark, for the introduction. Welcome, everyone, to the Croma Security Solutions Group plc 2024 Annual General Meeting. So I would like to welcome, ladies and gentlemen, and the time is now 9:00. And on that basis that a quorum of shareholders is present, being 3 shareholders present in-person or by proxy, we can proceed to business. The Board of Directors today are Teoodora Angelova Andreeva, the Chief Financial Officer, who's in the room with me now. We have Stephen Naylor, Non-Executive Director, joining online with the Investor Meet; and me, Roberto Fiorentino, Chief Executive. Earlier today, the company announced a trading update, a copy of which is available on our website. We will now proceed with the formal business of the AGM. The formal notice of the resolutions to be proposed at the AGM was posted to shareholders together with the annual report and accounts on the 4th of November 2024 and made available on the company's website. Unless anyone objects, I propose to take the notice as read. When it comes to voting, can I ask that only those persons present as either a shareholder in their own name or as a proxy for a shareholder vote on the resolutions to be proposed today. If of interest, details of the proxy votes cast on the resolutions put to the AGM will be available on the company's website. Thank you. Resolution 1, to receive the accounts, this is an ordinary resolution to receive the company's accounts for the financial year ended the 30th of June 2024 and the directors' report and the auditor's report on those accounts. Before proposing this resolution, are there any questions on the accounts? If there are no questions, I now put the resolution to the meeting and invite those in favor to raise their hands. Those against? Thank you. I declare the resolution carried. Resolution 2 is to appoint auditors. Resolution 2 is an ordinary resolution, and it relates to the reappointment of our auditors, UHY Hacker Young LLC. Before proposing this resolution, are there any questions? If there are no questions, I now put the resolution to the meeting and invite those in favor to raise their hands. Those against? Thank you. I declare the resolution carried. Resolution 3, to authorize the directors to determine the auditor's remuneration. Resolution 3 is an ordinary resolution, and it relates to the remuneration of the auditors. I propose as resolution 3 that the directors be authorized to fix the auditor's remuneration. If there are no questions, I now put the resolution to the meeting and invite those in favor to raise their hands. Those against? Thank you. I declare the resolution carried. Resolution 4, dividend declaration. Resolution 4 is an ordinary resolution to approve a final dividend of the year of 2.3p per share payable to the shareholders on the register at the close of business on the 5th of December 2024. Those in favor, please raise their hands. Those against? Thank you. I declare the resolution carried. Resolution 5, to authorize the directors to allot shares in the company. The next resolution is an ordinary resolution to authorize the directors to allot shares. The resolution is split into 2 parts consistent with the current ABI guidelines. The first part of the resolution seeks authority to allot what amounts to up to 33.33% of the issued share capital and the second part seeks authority for a further 33.33% of the issued share capital. But so far as this second part is concerned, the authority is only exercisable where the shares are to be issued pursuant to a rights issue. If granted, the authority to allot shares last until the next AGM. Before proposing this resolution, are there any questions? If there are no questions, I therefore propose the resolution and invite those in favor to raise their hands. Those against? Thank you. I declare the resolution carried. Resolution 6, to disapply preemption rights on allotment of shares. The next resolution is a special resolution to disapply the statutory preemption rights and to authorize the Board to allot shares on a non-preemptive basis. Again, if granted, this authority lasts only until next year's AGM. Before proposing this resolution, are there any questions? If there are no questions, I propose the resolution and invite those in favor to raise their hands. Those against? Thank you. I declare the resolution carried. Resolution 7 to authorize the company to market purchases. The next resolution is a special resolution to authorize the company to purchase its own shares. Again, if granted, this authority lasts only until next year's AGM. Before proposing this resolution, are there any questions? If there are no questions, I propose the resolution and invite those in favor to raise their hands. Those against? Thank you. I declare the resolution carried. Thank you, ladies and gentlemen. That was the last resolution to be considered at this meeting. And accordingly, that concludes the formal business of the Annual General Meeting. I would now like to take the opportunity, if I may, to respond to any questions. We currently have a few questions, no doubt because of our communications, which we will continue throughout next year. We have been fairly responsive in getting answers out to everyone. However, there is one question that has been raised again, and I will read it out for the benefit of those of you that cannot see this or know about it. The question submitted asks when buying a business which owns a property, typically, what percentage of the purchase price relates to the property? I imagine this is quite high. And accordingly, is there a risk that Croma's capital is invested primarily in property rather than in the area of expertise of security management. Will a property manager have to be hired [ extra cost ]? Investors are likely not to want to invest in a business that has its capital tied up in property, which isn't its area of expertise. I think in order to answer that question, we must reiterate once more that when we acquire a new business, we consider a number of factors, and we are open to taking leases and/or purchasing the properties in which those business reside. There is no fundamental desire to only buy freeholds and sometimes that isn't even available. However, there is an importance in retaining those properties, especially when those businesses have been local trades for several decades and the loss of the site could be impactful on the business, and therefore, securing the site is quite important. I think the other point to mention is that we do have to manage properties. And I think it would be a fair statement to make that we actually spend a lot more time and energy in management time looking after leased properties than we do our own properties. And that is because we're dealing with landlords, landlord's agents, [indiscernible] terminations, renewals. And therefore, they're far more onerous. Sitting on the asset of the property, especially when we have the ability as we have set up already to borrow collectively against the entire value via our bankers allows us to have funds available whenever we need them. Currently, we have no requirement for cash. You're all aware that we have a strong cash position with further cash to collect. We will readdress this and evaluate this on an ongoing basis. I hope that answers the question that's been put to us. And I don't have any other questions. I think on that basis, we can close this meeting, and I would like to thank everyone for attending today. And I look forward to updating you further in the coming year as we will continue with our investor meets. Thank you once more, and I shall hand back over to Mark.

That's great. Roberto. Thank you once again for your time this morning. Can I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it will be greatly valued by the company. On behalf of the Board of Croma Security Solutions Group plc, we'd like to thank you for attending today's Annual General Meeting. Good morning to you all.