REG - Newmark Security PLC - Year-end trading update

Newmark SecurityAnnouncement

17/05/2023 07:00

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RNS Number : 6278Z  Newmark Security PLC  17 May 2023

This announcement contains inside information for the purposes of Regulation
11 of the Market Abuse (amendment) (EU Exit) Regulations 2019/310.

 

Newmark Security plc

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

 

Year-end trading update

 

Continued revenue growth and a return to profitability

 

Newmark Security plc (AIM: NWT), a leading provider of electronic, software
and physical security systems, today provides an update on trading for the
year ended 30 April 2023 ("FY23"), reaffirming the Company's return to
profitability.

 

Highlights

 

·    FY23 year-on-year revenue growth, driven by a strong performance in
the People, Data Management, and Physical Security divisions.

·    Product innovation and efficient software systems have enhanced
solutions offering, driving new client contracts.

·    Human Capital Management ("HCM") annualised recurring revenues*
("ARR") increased by 133% year-on-year to £2.1 million for April 2023,
positively contributing to profit margins.

·    Confirmation of a return to profitability and cash flow generation in
FY23.

·    Continued focus to invest in people and infrastructure to fuel
sustainable growth.

 

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

 

Operations

 

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

 

Ongoing product development in cloud-based SaaS solutions and enhanced
software applications on Time Clocks and now Bring Your Own Device ("BYOD")
tablet devices has extended the reach of the Group's solutions in HCM and,
therefore, the overall share of wallet. Following the increasing momentum in
public and private sector spaces, Access Control has performed well
year-on-year.

 

Compliance with data remains a strong underpinning core value, and the
business continues to leverage this in winning new HCM SaaS recurring revenue
business in both the North American and European markets. This has resulted in
a 133% increase in the HCM ARR to £2.1 million for April 2023 (April 2022:
£0.9 million).

 

During the period, Grosvenor's US headquarters were relocated to a much larger
facility in Florida, and third-party logistics were bought in-house, further
improving the ability to serve customers.

 

Physical Security Solutions division - Safetell

 

The organisational changes have been successfully implemented within Safetell
following the restructuring of sales and marketing in 2022. This restructuring
has helped Safetell deliver FY23 revenue growth, primarily from retail
screens, entrance control installations and automatic door services.

 

During the year, Safetell developed a redesigned, cost-effective retail
attack-resistant screen for convenience stores, and this has been subject to
strong demand, having rolled out over £1 million of installations for major
UK retailers and built a pipeline of over £2 million for installations for
FY24.

 

Safetell has continued to increase its market share in the Entrance Control
market with successful installations direct to end users and within the
enlarged construction sector, including newbuild and refurbishment. The
Group's market share has continued to grow in Automatic Doors Services, with
new national service contracts increasing recurring revenues.

 

Financial Position

 

The Group's cash at 30 April 2023 was £0.6 million (30 April 2022 cash: £0.2
million). This increase was due to a significant improvement in operation
cashflows driven by higher revenues, increased gross margin percentage and
lower overheads.

 

Supply chain challenges have been successfully managed by building inventory
to satisfy ongoing customer demand. The inventory levels are expected to ease
in FY24, allowing for further cash flow generation.

 

In January 2023, the Group's UK invoice financing facility was increased by
£0.5 million to £2.3 million to provide further working capital headroom as
the Group continues to grow.

 

Maurice Dwek, Chairman of Newmark, commented:

 

"We are pleased to report that the business has returned to full-year
profitability. This is the result of the hard work that commenced in the
previous financial year, which has seen us optimise our operations, put
through necessary price increases to mitigate the inflationary environment and
enhance our product offering to meet the needs of our customers. Overall,
Newmark is a much stronger business with a platform to drive future growth.

 

"Looking ahead, the business has made a good start to FY24 with its new
revenue pipeline. Whilst the Board cautiously observes current macro events,
it remains confident in Newmark's product and service offering. The Company
looks forward to updating the market on further commercial progress in due
course."

 

 

 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 (Corporate Finance)

 Amrit Nahal, Tony Quirke (Sales & Broking)

 Yellow Jersey PR Limited                         Tel: +44 (0) 203 2004 9512

 (PR & IR)

 Charles Goodwin / Dominic Barretto

 

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/)

 

 

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