If you're looking for security..........try this tiddler?

Croma Security Solutions is an Aim market tiddler that made it onto my monitor when the share price was in the low 20s, but never made it into my portfolio. That's a shame because it is a small company that is progressing very well, and indeed the share price is now around 47p (at time of writing) and I believe has further to run from here.

This morning Croma released a RNSNON which I'd imagine has been missed by most investors. The announcement relates to two significant contract wins with a Healthcare Institution and a major London based property group, worth £1.5m and £1m per annum respectively. Furthermore, the Directors state that they "are increasingly confident about the prospect for Croma Vigilant in both the short and medium term."

What particularly captured my attention was this assertion from Sebastian Morley, the Executive Chairman. He commented: "These contracts have been awarded to Croma in the face of sharp competition. Although our offering was not the cheapest, we won because of our luminous difference as the ex-military security professionals. This is becoming a welcome theme for our business and we will aggressively spread this message to companies who demand the highest standards for their security services."

Since the interim results were released in February this year, they have also announced 4 further contract wins with Odeon, Hilton Hotels, the second largest bank in the UK and a Saudi Arabian customer.

Croma describes itself as a total security services provider. In their interim results they announced revenue up 14% to £8.8m,  diluted EPS up by 92% to 1.44p (six months to 31 December 2013: 0.75p), net assets at £9.1m  (31 December 2013: £8.7m), cash at £0.68m  (31 December 2013: £0.84m) and they declared a maiden dividend of 0.3p per share with the promise of a final dividend.

The current market cap. of Croma is around £7m. Broker forecasts for this year and next are for revenues of £15.3m and £15.7m with EPS at 3.3p and 3.8p respectively giving forward p/e ratios of 14 and 12. The balance sheet is sound, although if you strip out goodwill and intangibles then net asset value is around £2m. The company appears to generate cash, although at the interim stage there was  a slight outflow due to changes in the net working capital.

All in all, for investors interested in good value micro-caps I would be inclined to believe that Croma warrants further investigation. I might add that I don't hold shares in Croma, but would consider picking some up on any significant price weakness, however that does appear unlikely in the short to medium term.