Good morning!
A fairly short report today, mainly because there's not much in the way of news, but also because I have to drive over to my home town of Bournemouth for a family get-together this afternoon. Good thing it's not too hot, as the aircon on my elderly Jaguar doesn't work. Must check my AA membership is up-to-date too, before I set off!
Newmark Security (LON:NWT)
Share price: 4.0p (down 18% today)
No. shares: 460.2m
Market cap: £18.4m
Results y/e 30 Apr 2015 - the first thing that jumps out at me is the lateness of this company's reporting - to be reporting results three months, and ten days after the year end date is slack. Small companies should have tight control over their finances, and should be able to report within a few weeks of the year end. I would hesitate to invest in a company where reporting performance to the owners is treated as a low priority. There was no trading update at the year end date either, so shareholders have been in the dark since the interims were published on 30 Jan 2015. That's far too long a gap.
The results look good - turnover up 19.2% to £22.9m, and EPS on a comparable basis (before an impairment provision made last year) was up from 0.38p to 0.48p, an increase of 26%, and putting the shares on an attractive PER of 8.3.
So why have the shares sold off 18% today? Probably because of the cautious outlook statement, or profit warning, for the current year;
Overall, we believe that the profits of the Group in the current year will be lower than that for the year ended 30 April 2015 whilst we build up new markets and products from which the benefits will be seen in the following year and beyond. The Board remains optimistic about the future with various opportunities in the pipeline and accordingly has increased the proposed dividend for the year by one third.
Many market participants want instant gratification, so will sell up and move on, if a company says that it expects to have a slow year. That's probably what's happening today. Well, that and the reality that the Newmark share price probably got ahead of itself (there's a lot of that about at the moment):
Placing - I note that substantial shareholders,…
