REG - Newmark Security PLC - Full Year Trading Update

Newmark SecurityAnnouncement

20/05/2025 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250520:nRST2980Ja&default-theme=true

RNS Number : 2980J  Newmark Security PLC  20 May 2025

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse (amendment)
(EU Exit) Regulations 2019/310 ("MAR"). With the publication of this
announcement via a Regulatory Information Service, this inside information is
now considered to be in the public domain.

 

 

20 May 2025

 

Newmark Security plc

("Newmark", the "Company" or the "Group")

 

Full Year Trading Update

 

Full year Group Revenue increased to £23 million driven by strong growth at
Human Capital Management ("HCM")

 

Newmark Security plc (AIM: NWT), a leading provider of electronic and physical
security systems, is pleased to provide an update on its trading for the year
ended 30 April 2025 ("FY25") in advance of the publication of the Group's
audited FY25 results in early September 2025.

 

Commenting on the year, Marie-Claire Dwek, Chief Executive Officer of Newmark,
said: "As anticipated, the second half of the year was much stronger in terms
of Group sales and profitability, and we expect to report a slight growth in
Group full year revenue and adjusted EBITDA^. HCM went from strength to
strength in the period with revenue growing 14% and the division now
accounting for c. 67% of total Group revenue."

 

"In line with our HCM plan, we have grown recurring revenues through services,
displaced clock competitors and are diversifying our sales channels through
our direct-to-end-user strategy as we integrate our clock and
cloud-based software with world leading HCM platforms. We are expecting
continued significant HCM growth through FY26, particularly in North America
given the size of the market and progress being made with our Direct to
End-User ("D2E") strategy. We are already building a D2E sales pipeline with
Oracle and SAP and we expect to secure our first customers in FY26.

 

"Across the rest of the Group, both Access Control and Safetell reported
stronger revenues in H2, particularly after several contract start dates were
deferred to later in the year and FY26. Whilst these businesses are moving in
the right direction, HCM has become our focus given its growth and the scale
of commercial opportunities that lie ahead. As such, we are reviewing both
Access Control's and Safetell's growth strategies to assess how we can best
drive value for the Group and ultimately our shareholders."

 

Highlights:

 

·    Total Group revenue for FY25 expected to be no less than £23
million, up 3% (FY24: £22.3 million)

·    Executed strategic focus on HCM, with FY25 revenue of £15 million,
up 14% year-on-year ("YOY")

·    HCM annualised recurring revenue ("ARR") increased by 24% YOY to
£3.6 million in April 2025, positively contributing to profit margin growth
(April 2024 ARR: £2.9 million)

·    Over 40,000 monthly device subscriptions for GT Connect and other GT
Services

·    Group debt (including leases) reduced by a further £0.9 million to
£4.0 million

·    Cash as at 30 April 2025 was £0.4 million, a decrease of £0.7
million on the prior year primarily due to the debt repayments

 

*ARR is calculated by annualising revenue recognised in a given month from all
clients on deployed HCM subscription contracts.

^Adjusted EBITDA is stated after adding back LTIP and other share-based
payments.

 

Grosvenor Technology (HCM and Access Control)

 

HCM

 

Delivering strong growth with pipeline building

 

HCM has continued to lead our growth, with sales of £15 million, up 14% YOY,
whilst ARR for April 2025 increased by 24% YOY to £3.6 million, further
improving HCM's profitability.

 

In North America, demand for the GT4 and lower-cost GT4-Lite devices have also
been particularly strong, with orders for the latter helping to displace its
main low-cost clock competitor in the North American market. Our team
continues to build strategic partnerships across the industry to open new
sales channels, which will help to accelerate growth. Every customer in the
region with one exception now has attached recurring services.

 

During the year, our partner Workforce Software was acquired by ADP, an
employee management solutions company, whilst another partner, Paycor, was
acquired by Paychex, a payroll and HR solutions company. The disruption caused
by these acquisitions impacted orders received by these partners during the
second half of FY25. However, we believe that these acquisitions are a
positive development for us in terms of introducing their newly acquired
customers to our products and services, and we are excited by the potential
new sales opportunities that lie ahead.

 

In the Rest of the World region ("ROW"), revenue growth was achieved despite
our largest European partner completing a series of acquisitions in H1, which
caused a temporary slow-down in orders. However, these acquisitions have led
to our partner expanding into new European territories and HCM is negotiating
to benefit directly as the sole provider of timeclock software and hardware
solutions to them. Sales activity through this partner bounced-back to deliver
a strong H2, with the pipeline building for FY26. We also delivered a series
of upgrades for existing long-term UK retail clients, underlining the strength
of our customer relationships and products.

 

D2E strategy establishing new sales channels for GT Time

 

Our D2E strategy involves selling directly to end users through large HCM
partner platforms, unlocking enterprise-sized customers and larger orders for
our GT Time products and services with our per-employee subscription model.

 

During the second half of the year, HCM gained Oracle integrator
status following the successful testing of HCM's Clock and
Cloud-based software. The sales pipeline is building and
we expect to secure our first D2E customers during FY26. We also now
expect to be integrated with SAP earlier than anticipated and are targeting
first sales with them during FY26. Our Workday integration is progressing well
and we plan to have certification by mid-FY26, which will enable us to build
pipeline over the remainder of the year.

 

The recently announced partnership agreement with Synerion, a global provider
of cloud workforce management software, underlined further rapid progress with
our D2E strategy. The partnership will see HCM's GT Clock devices combined
with Synerion's workforce management software and then integrated into several
of Synerion's HCM partner platforms in North America, enabling HCM to provide
a fully unified hardware and software solution.

 

Access Control

 

As communicated at the half year, Access Control experienced a slower start
to FY25, with sales impacted by delays with our Janus C4 Ultras software
partner and to upgrade projects. The division did see sales improve in the
second half as anticipated, although full-year revenue was 10% down on last
year. We are reviewing the current strategy to deliver better value for the
Group.

 

Safetell

 

As previously disclosed, the business experience delayed starts to several
public sector installation contracts that were originally planned for 2025.
Whilst the business did see slightly higher revenues in H2 due to a strong
performance from services, which grew by 30% in FY25, some of these
installation contracts have been delayed further into FY26. Acknowledging that
this has been frustrating for the business, the outlook for 2026 is looking
more positive with a strong contract pipeline, increasing demand for entrance
control products and door services. The streamlining of processes and project
execution will also help to improve margin. Whilst we expect an improved 2026,
the Board will be assessing Safetell's ongoing strategy in the context of the
increasing focus on HCM.

 

Current Trading & Outlook

 

The Group is making a good start to FY26 with sales building across both
divisions. Acknowledging the recent concerns over changes to US tariffs, the
Group is currently seeing minimal impact with HCM  terminals appearing to be
exempt from tariffs.

 

For HCM, the D2E Oracle partnership is an immediate focus with the business in
the early stages of building a sales pipeline. The division is also launching
GT Tablet in FY26, which has had significant interest from our existing HCM
partners. We anticipate this will be an important incremental source of
recurring revenue at the end of FY26, with one HCM partner already committed
to onboarding GT Tablet, whilst discussions with others are progressing well.

 

Safetell has had a more confident start to the year with a good pipeline
building and a proportion of the deferred orders being delivered in H1 FY26.
It also expects to continue to grow its services revenues through its door
services offering.

 

ENDS

 

 

 Newmark Security plc                                       Tel: +44 (0) 20 7355 0070

 Marie-Claire Dwek, Chief Executive Officer                 www.newmarksecurity.com (http://www.newmarksecurity.com/)

 Paul Campbell-White, Chief Financial Officer

 Allenby Capital Limited                                    Tel: +44 (0) 20 3328 5656

 (Nominated Adviser and Broker)

 James Reeve / Lauren Wright (Corporate Finance)

 Amrit Nahal, Tony Quirke (Sales & Corporate Broking)

 

About Newmark Security plc

 

Newmark is a leading provider of electronic, software and physical security
systems that helps organisations protect human capital and provide safe spaces
seamlessly and securely.

 

From our locations in the UK and US, we operate through subsidiary businesses
positioned in specialist, high-growth markets.

 

We foster an open and inclusive work environment amongst our c.100 employees,
serving hundreds of blue-chip customers.

 

Our product portfolio consists of Human Capital Management and Access Control
Systems providing both hardware and software and Physical security
installations to various sectors.

 

Newmark Security plc is admitted to trading on AIM (AIM: NWT).

 

For more information, please visit: www.newmarksecurity.com
(https://newmarksecurity.com/)

 

Safe. Seamless. Secure

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTFLFSTETIALIE