REG - Newmark Security PLC - Trading Update

Newmark SecurityAnnouncement

27/10/2022 07:01

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RNS Number : 2472E  Newmark Security PLC  27 October 2022

 

Newmark Security plc

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

 

Trading Update

 

Newmark Security plc (AIM: NWT), a leading provider of electronic, software
and physical security systems, today provides an update on trading ahead of
the publication of its results for the year-ended 30 April 2022 ("FY 2022"),
subject to finalisation of the audit.

 

Highlights:

 

·      Strong revenue growth, with revenue of approximately £19 million
(2021: £17.6 million), driven by Human Capital Management ("HCM") sales in
the US and customer uptake of new products

·      Enhanced product offering and end-to-end solutions driving client
base expansion

·      Delivering recurring income and optimising product mix provides
for sustainable growth

 

As announced on 24 October 2022, the Company expects to release its FY 2022
results at the end of November.

 

As noted in the Company's year-end trading update, announced on 24 May 2022,
sharp increases in componentry and freight costs impacted the Group's margins.
However, we have implemented a programme of strict cost control and increased
prices to mitigate the effect of higher costs to the extent possible, which
has resulted in reduced losses for the second half of FY 2022. The full
benefits of price increases and cost measures will be seen in the current
financial year.

 

Operations

 

People and Data Management division - Grosvenor Technology ("Grosvenor")

 

Significant process was made during the year in the evolution of Grosvenor's
business model, which now encompasses hardware-enabled software and services
centres focused on providing customers with 'secure cloud control'. There was
ongoing success in the North American HCM operations, which continued to
deliver double-digit growth. Grosvenor is launching a new HCM SaaS Cloud
Control platform in FY 2023 which is expected to increase high-margin,
recurring revenues.

 

Physical Security Solutions division - Safetell

 

The Group's strategy is to build the services side of the business and took
initiatives during FY 2022 to implement this, which are delivering positive
results and supporting the return of Safetell to growth.  Demand for security
products and services partially recovered during the year compared to the
prior year, where demand had been significantly impacted by the effects of the
COVID pandemic, and the Group is well positioned to accelerate and scale to
meet the increase in demand. Safetell is in the process of introducing new
products, new strategic partnerships and improvements throughout the business
which are expected to support its growth.

 

Current trading and financial position

 

The Group secured a $2 million US invoice discounting facility in February
2022 to provide additional working capital headroom and successfully managed
supply chain challenges by building inventory to satisfy ongoing customer
demand and stay ahead of the competition.

 

The Group had £0.2m of cash and cash equivalents at 30 April 2022.

 

The Group's working capital level is expected to ease as the amount of
inventory held is reduced, allowing for improved cash flow generation. We are
fully utilising our recent investments in products and infrastructure to
enhance future growth and increase recurring revenues.

 

Post period end, the Group returned to profitability and positive operating
cashflows during the first five months of FY 2023, whilst also continuing to
grow revenues.

 

A full update on our financial performance for FY 2022 and progress in the
current year will be provided in the upcoming annual report.

 

Ends

 

 Newmark Security plc
 Marie-Claire Dwek, Chief Executive Officer         Tel: +44 (0) 20 7355 0070

Paul Campbell-White, Chief Financial Officer

                                                  www.newmarksecurity.com (http://www.newmarksecurity.com/)

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

 (Nominated Adviser and Broker)
 James Reeve / Freddie Wooding (Corporate Finance)

 Amrit Nahal (Sales & 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 among 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: https://newmarksecurity.com/
(https://newmarksecurity.com/)

 

Safe. Seamless. Secure

 

 

 

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