REG - Newmark Security PLC - Full year trading update

Newmark SecurityAnnouncement

14/05/2024 07:00

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RNS Number : 2441O  Newmark Security PLC  14 May 2024

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

 

14 May 2024

 

Newmark Security plc

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

 

Full year trading update

 

Robust year-on-year revenue growth and improved 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 2024 ("FY24").

 

Highlights

 

·    Group expects to report robust year-on-year revenue growth with FY24
revenues of not less than £22 million (FY23: £20.3 million)

 

o  the revenue growth was achieved in both the People and Data Management and
Physical Security divisions

 

·    Improved profitability and cash flow generation in FY24 led to higher
year end cash position of £1.1 million (30 April 2023: £0.6 million)

 

·    Strong performance in the People, Data Management, and Physical
Security divisions

 

·    Human Capital Management ("HCM") annualised recurring revenues*
("ARR") increased by 28% year-on-year to £2.9 million for April 2024 (April
2023 ARR: £2.1 million), positively contributing to profit margins

 

·   Combination of increased cross-selling to existing customers and new
blue-chip customer wins contributed to strong second half

 

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

 

All FY24 figures stated are subject to audit.

 

Operations

 

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

 

The HCM division within Grosvenor delivered growth in both the US and Rest of
World territories. This was achieved despite the ending of the UKG contract,
which stopped contributing to revenues in Q3 FY23.

 

Growth was driven by winning three new customers earlier in the year, which
contributed to a stronger H2, the cross-selling of new products to existing
customers and increasing our share of wallet. Grosvenor's strategy to
transition to a 'hardware-enabled software and services' business also
continues to build momentum, underlined by customer subscriptions growing ARR
by 28% to £2.9 million for April 2024 (April 2023: £2.1 million).

 

Recognising the growth opportunity that the US market presents, earlier in the
year Grosvenor successfully relocated its US headquarters to a much larger
facility in Florida, whilst third-party logistics have also been brought
in-house, which has improved the ability to serve customers to a higher
standard and enables more control in servicing customers and their growing
needs.

 

Physical Security Solutions division - Safetell

 

Safetell delivered encouraging revenue growth supported by a strong
performance in both halves of the year. The division continues to execute its
strategy to broaden its customer base and grow its revenues from service and
maintenance work in the UK autodoor servicing market, which rose significantly
compared to the previous year.

 

Safetell has been targeting new sectors such as retail and critical public
services, where there is strong demand for physical security solutions, whilst
at the same time developing new strategic partnerships and product lines.
Safetell has also achieved good growth in the Entrance Control market and has
made important improvements to the processes of product delivery and
installation, which have helped to reduce cost and therefore improve margins.

 

Financial Position

 

The Group's cash at 30 April 2024 was £1.1 million (30 April 2023 cash: £0.6
million). This increase was due to an improvement in operating cashflows
driven by higher revenues and increased margin percentage, particularly in the
second half of the year.

 

FY24 cashflows were also helped by an easing of inventory levels following the
building up of positions over the last couple of years to mitigate against the
supply chain challenges which have now eased.

 

The Group currently has capacity within its UK and US invoice financing
facilities to provide further working capital headroom as the Group continues
to grow. Banking net debt at 30 April 2024 was £2.0 million (30 April 2023:
£3.0 million).

 

Marie-Claire Dwek, Chief Executive Officer of Newmark, commented:

 

"I am pleased to report that the positive momentum we experienced in the first
half of the year has continued, resulting in an expected year-on-year revenue
growth and improved profitability. This is testament to the success of the
strategies being implemented across both divisions to drive customer
acquisition, growth in recurring revenues and enhanced customer service.

 

"Whilst we continue to closely monitor macroeconomic events, we are excited
about the opportunities building in our markets and the promising sales
pipeline for the new financial year. We look forward to providing further
update on our 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 / Liz Kirchner / Lauren Wright (Corporate Finance)

 Amrit Nahal / Tony Quirke (Sales & Corporate 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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