If EPS Growth Is Important To You, Croma Security Solutions Group (LON:CSSG) Presents An Opportunity

Investors are often guided by the idea of discovering ‘the next big thing’, even if that means buying ‘story stocks’ without any revenue, let alone profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Croma Security Solutions Group (LON:CSSG). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

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In the last three years Croma Security Solutions Group’s earnings per share took off; so much so that it’s a bit disingenuous to use these figures to try and deduce long term estimates. So it would be better to isolate the growth rate over the last year for our analysis. To the delight of shareholders, Croma Security Solutions Group’s EPS soared from UK£0.039 to UK£0.057, over the last year. That’s a impressive gain of 45%.

One way to double-check a company’s growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. Croma Security Solutions Group maintained stable EBIT margins over the last year, all while growing revenue 10% to UK£9.6m. That’s progress.

You can take a look at the company’s revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

See our latest analysis for Croma Security Solutions Group

Croma Security Solutions Group isn’t a huge company, given its market capitalisation of UK£10m. That makes it extra important to check on its balance sheet strength.

Many consider high insider ownership to be a strong sign of alignment between the leaders of a company and the ordinary shareholders. So as you can imagine, the fact that Croma Security Solutions Group insiders own a significant number of shares certainly is appealing. In fact, they own 47% of the shares, making insiders a very influential shareholder group. Shareholders and speculators should be reassured by this kind of alignment, as it suggests the business will be run for the benefit of shareholders. Of course, Croma Security Solutions Group is a very small company, with a market cap of only UK£10m. So this large proportion of shares owned by insiders only amounts to UK£4.8m. That might not be a huge sum but it should be enough to keep insiders motivated!

It means a lot to see insiders invested in the business, but shareholders may be wondering if remuneration policies are in their best interest. Well, based on the CEO pay, you’d argue that they are indeed. The median total compensation for CEOs of companies similar in size to Croma Security Solutions Group, with market caps under UK£148m is around UK£302k.

The Croma Security Solutions Group CEO received UK£269k in compensation for the year ending June 2025. That comes in below the average for similar sized companies and seems pretty reasonable. While the level of CEO compensation shouldn’t be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. It can also be a sign of a culture of integrity, in a broader sense.

You can’t deny that Croma Security Solutions Group has grown its earnings per share at a very impressive rate. That’s attractive. If you still have your doubts, remember too that company insiders have a considerable investment aligning themselves with the shareholders and CEO pay is quite modest compared to similarly sized companiess. Everyone has their own preferences when it comes to investing but it definitely makes Croma Security Solutions Group look rather interesting indeed. What about risks? Every company has them, and we’ve spotted 2 warning signs for Croma Security Solutions Group you should know about.

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in GB with promising growth potential and insider confidence.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.