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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Newmark Security Plc | LSE:NWT | London | Ordinary Share | GB00BNYM9W73 | ORD GBP0.05 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 85.00 | 80.00 | 90.00 | 85.00 | 85.00 | 85.00 | 0.00 | 07:38:41 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Security Systems Service | 20.31M | 353k | 0.0377 | 22.55 | 7.97M |
From Apr 2019 to Apr 2024
TIDMNWT
RNS Number : 5021V
Newmark Security PLC
30 January 2017
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).
30 January 2017
Newmark Security plc
("Newmark", the "Company" or the "Group")
Interim Results
For the six months ended 31 October 2016
Newmark Security plc (AIM: NWT), a leading provider of electronic and physical security systems, is pleased to report today on its unaudited interim results for the six months ended 31 October 2016.
Financials:
-- Revenue of GBP8.4m (HY 2015: GBP11.2m) -- Loss from operations of GBP816k (HY 2015: profit GBP765k) -- Loss per share of 0.17 pence (HY 2015: earnings 0.15 pence) -- Cash outflow from operating activities was GBP1.148m (HY 2015: inflow GBP2.127m). -- Overall cash outflow in the period was GBP2.397m (HY 2015: inflow GBP1.189m) -- Cash balance at 31 October 2016: GBP1.9m (31 October 2015: GBP5.4m)
Asset Protection Division
-- Revenue decreased by 39.4% from GBP7.6m to GBP4.6m, mainly as a result of the anticipated reduced contribution from sales of time delay cash handling equipment to the Post Office
-- Order inflow was lower in the lead up to the Brexit vote as many customers put plans on hold. Following the result of the Brexit vote there was the cancellation of planned work by several customers, including government departments. Other businesses in physical security have encountered similar problems
-- Focus for business development in the division is moving towards counter-terrorism solutions in line with changing global demand for physical security
Electronic Division
-- Revenue increased by 5.2% from GBP3.6m to GBP3.8m
-- SATEON revenue increased by 80% whilst JANUS revenues continued to decline in line with expectations
-- The new SATEON version 3.0 software and SATEON Advance hardware were both released post the period end, later than originally anticipated, which affected revenues in H1. Significant revenues from this new release are not now expected until the next financial year
-- In workforce management ("WFM") development resource was focussed on the GT-10 employee terminal, which has now been released
Commenting on the results, Maurice Dwek, Chairman of Newmark, said:
"In the electronic division, the previous two years have been a period of material investment into new products and this has resulted in two new products having been launched in the second half of the year: the SATEON Advance access control system and GT-10 Android based terminal for workforce management. Both products have been well received and several potentially high volume, early stage enquiries have been received. SATEON Advance was also short-listed for an award at the prestigious Security and Fire Excellence Awards.
"In the asset protection division, business development activities have shifted focus towards the provision of counter-terrorism solutions, where the business is well positioned to drive sales and create new opportunities. This strategy will offset any sector specific downturns as the counter-terror market spans multiple sectors. The Group's expertise in ballistic resistant products will be a key advantage in responding to the rapidly increasing demand for physical security from corporates around the world.
"As previously reported, the Group has been affected by challenging market conditions and has had to navigate a period of economic uncertainty amongst our customers in the UK. This, together with the anticipated decline in sales to the Post Office, resulted in the expectation that the Group would make a loss in the current financial year.
"The Directors have reduced the Group's costs and continue to review its cost structure to improve the financial position going forward. As stated above, a number of new products have now been launched and these have already resulted in some significant interest from customers."
Copies of the interim results for the six months ended 31 October 2016 will shortly be sent to shareholders and will shortly be available on the Company's website www.newmarksecurity.com.
For further information:
Hot Features
Premium
Newmark Security plc
Marie-Claire Dwek, Chief Tel: +44 (0) 20 7355
Executive Officer 0070
Brian Beecraft, Group Finance www.newmarksecurity.com
Director
Allenby Capital Limited Tel: +44 (0) 20 3328
(Nominated Adviser and 5656
Broker)
Jeremy Porter / James Reeve
/ Liz Kirchner
Yellow Jersey PR Limited Tel: +44 (0) 7768
537 739
Felicity Winkles / Joseph
Burgess / Dom Barretto
CHAIRMAN'S STATEMENT
The Board announces the Group's interim results for the six months ended 31 October 2016.
The consolidated income statement shows a reduction in revenue of 25% from GBP11,180,000 to GBP8,368,000. This reduction was derived from the anticipated decrease in sales to the Post Office within the asset protection division, together with the cancellation and deferral of orders by customers in that division, partly due to concerns following the result of the Brexit vote. This reduction in revenue flowed through to the results for the period with a loss from operations of GBP816,000 (2015: profit of GBP765,000). Loss per share was 0.17 pence (2015: earnings 0.15 pence).
A detailed review of the activities, results and future developments of each division is set out below.
Asset Protection Division
Revenue GBP4,607,000 (2015: GBP7,606,000)
Asset protection revenue was 39.4% lower than the corresponding period last year, mainly as a result of the expected reduced contribution from sales of time-delay cash handling equipment to the Post Office, which saw the sales of cash handling equipment fall 37.3%.
Product Division revenue was 30.5% lower than the corresponding period last year. The lead up to the Brexit vote resulted in many customers putting plans on hold and afterwards there was the cancellation of planned work by several customers, including the government departments that we supply on a regular basis, resulting in reduced orders. Sales were further reduced by the cancellation of a sales order for the supply of time delay cash handling equipment to a longstanding financial institution after they entered negotiations to sell 300 of their high-street branches.
Revenues from Eclipse Rising Screens were affected by reduced spending from two long standing financial institution customers. CounterShield revenue was lower as a result of a planned refurbishment programme for a large Police Force being delayed due to the sale of its headquarters. Sales of Fixed Glazing products were unchanged with increased competition from low cost counter suppliers.
Sales within the service division in the first six months have been challenging with the impact of branch closures that have occurred in the banking sector. Towards the end of the period, we embarked on the installation of our new TC105 rising screen activation system which the Directors expect to provide good revenue streams over the next few years, replacing the now obsolete TC104. Pneumatic upgrades continue as budgeted and as mentioned in previous reports. Action to readdress resources within the division have been taken and overheads were reduced by 7%. The new field management software has now been bedded in and provides invoice capture and cash flow advantages. We continue to explore and develop our other product offerings and to reduce our reliance on rising screen revenue streams in the future.
Electronic Division
Revenue GBP3,761,000 (2015: GBP3,574,000)
In Access Control ("AC") revenues from SATEON continued the strong growth trend shown in previous periods, increasing 80% compared to the corresponding period last year. Much of this growth came through the upgrade of existing JANUS sites, with many end users keen to continue long-standing relationships with Grosvenor. Notable projects included Greater Manchester Fire Service and a major defence contractor.
JANUS revenues continued to decline in line with expectations as less new projects were completed. JANUS remains the AC platform of choice however for many end users and a major roll-out continued for one of the world's largest data centres.
Significant investment was made during the period developing SATEON version 3.0 software and SATEON Advance hardware, both of which were released at the beginning of the second half of the financial year. V3.0 is the fastest, most intuitive iteration of SATEON Software to date, dramatically increasing the speed of configuring doors and personnel. SATEON Advance hardware represents a major step for both Grosvenor Technology and the AC sector as a whole. Its blade-based architecture allows a modular approach to system design and it is anticipated that this product will become the majority AC revenue generator through the second half of this year and into the next financial year.
In workforce management ("WFM") development resources were focussed on the GT-10 employee terminal, released towards the end of the first half. GT-10 has an Android based operating platform, allowing current and potential software partners to integrate their web-based offerings seamlessly, where they have existing Android based applications. First launched at a US trade show, negotiations have commenced with several potential major WFM software providers in the US, UK, Europe and the Middle East.
In addition to existing WFM markets, GT-10 provides an opportunity to generate revenue in entirely new markets and the firm has begun research into several vertical sectors to investigate the potential return on investment available, particularly those that offer an "as a service" ("aaS") opportunities. Increasing recurring revenue through the provision of both hardware and software on an aaS basis remains a key focus and ambition in both WFM and AC product families.
Sales of existing RS and IT series of WFM terminals continued in line with management's expectations. The Company has recently secured a new GBP350,000 contract with one of the world's top ten steel producers for the supply of its IT31 WFM terminals. This order will be shipped in two tranches with GBP200,000 realised in the current financial year and GBP150,000 in next year.
In North America, business development activities increased to leverage the potential that exists for growing WFM revenues. The Directors consider that the US market remains the region with the greatest growth opportunities for both the existing IT series terminals and the newly launched GT-10. For the first half, WFM revenues grew 11% compared to the corresponding period last year and a number of marketing initiatives are planned for the second half to increase brand awareness through the sales channel and into end-user markets.
The Hong Kong business was monitored closely through the period as revenues fell well short of expectations. As revenues were not forecast to significantly improve over the short to medium term a decision was taken to withdraw from Hong Kong during the period, so the business can redeploy resources into regions of greater potential and lower its total cost base.
Balance sheet and cash flow
Overall there was a cash outflow in the period of GBP2,397,000 (2015: inflow: GBP1,189,000). The outflow reflected the trading result for the period and the payment of the dividend of GBP469,000, as well as increased stock holding for customer orders delayed until the second half and a lower level of advance payments from customers.
Outlook
In the electronic division, the previous two years have been a period of material investment into new products and this has resulted in two new products having been launched in the second half of the financial year: SATEON Advance access control system and GT-10 Android based terminal for workforce management. Both have been well received and several potentially high volume, early stage enquiries have been received. SATEON Advance was also short-listed for an award at the prestigious Security and Fire Excellence Awards.
In the asset protection division, business development activities have shifted focus towards the provision of counter-terrorism solutions where the business is well positioned to drive sales and create new opportunities. This strategy will offset any sector specific downturns as the counter-terror market spans multiple sectors. The Group's expertise in ballistic resistant products will be a key advantage in responding to the rapidly increasing demand for physical security from corporates around the world.
As previously reported, the Group has been affected by challenging market conditions and has had to navigate a period of economic uncertainty amongst its customers in the UK. This, together with the anticipated decline in sales to the Post Office, resulted in the expectation that the Group would make a loss in the current financial year.
The Directors have reduced the Group's costs and continue to review its cost structure to improve the financial position going forward. As stated above, a number of new products have now been launched and these have already resulted in some significant interest from customers.
M DWEK Chairman
31 January 2017
CONSOLIDATED INCOME STATEMENT
For the six months ended 31 October 2016
Unaudited Audited Unaudited
Six months Year Six months
ended ended ended
31 October 30 April 31 October
2016 2016 2015
Notes GBP'000 GBP'000 GBP'000
Revenue 8,368 21,823 11,180
Cost of sales (5,322) (12,725) (6,623)
------------ ---------- ------------
Gross profit 3,046 9,098 4,557
Administrative expenses (3,862) (7,900) (3,792)
------------ ---------- ------------
(Loss)/profit from operations (816) 1,198 765
Interest received 4 11 -
Finance costs (4) (13) (4)
(Loss)/profit before
tax (816) 1,196 761
Tax expense 2 - 31 (82)
(Loss)/profit for the
period/year (816) 1,227 679
============ ========== ============
Attributable to:
- Equity holders of
the parent (816) 1,227 679
(Loss)/earnings per
share
- Basic (pence) 3 (0.17p) 0.26p 0.15p
============ ========== ============
- Diluted (pence) (0.17p) 0.26p 0.15p
============ ========== ============
All activities relate to continuing operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 October 2016
Unaudited Audited Unaudited
Six months Year Six months
ended ended ended
31 October 30 April 31 October
2016 2016 2015
GBP'000 GBP'000 GBP'000
(Loss)/profit for the period/year (816) 1,227 679
Foreign exchange gains on
retranslation of overseas
operation 45 9 -
------------ ---------- ------------------
Total comprehensive income
for the period/year (771) 1,236 679
------------ ---------- ------------------
Attributed to:
* Equity holders of the parent (771) 1,236 679
------------ ---------- ------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 October 2016
Unaudited Audited Unaudited
31 October 30 April 31 October
2016 2016 2015
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and
equipment 764 738 694
Intangible assets 8,965 8,859 8,711
Total non-current assets 9,729 9,597 9,405
============ ========== =============
Current assets
Inventories 1,775 1,406 1,361
Trade and other receivables 3,575 3,715 3,085
Cash and cash equivalents 1,902 4,299 5,391
Total current assets 7,252 9,420 9,837
------------ ---------- -------------
Total assets 16,981 19,017 19,242
============ ========== =============
LIABILITIES
Current liabilities
Trade and other payables 3,074 3,865 4,568
Other short term borrowings 78 99 101
Corporation tax liability - 1 -
Provisions 106 106 100
Total current liabilities 3,258 4,071 4,769
------------ ---------- -------------
Non-current liabilities
Long term borrowings 81 64 61
Provisions 100 100 100
Deferred tax 325 325 412
Total non-current liabilities 506 489 573
------------ ---------- -------------
Total liabilities 3,764 4,560 5,342
TOTAL NET ASSETS 13,217 14,457 13,900
============ ========== =============
Capital and reserves
attributable to equity
holders of the company
Share capital 4,687 4,687 4,688
Share premium reserve 553 553 553
Merger reserve 801 801 801
Foreign exchange difference
reserve (128) (173) (182)
Retained earnings 7,264 8,549 8,000
13,177 14,417 13,860
Minority interest 40 40 40
------------ ---------- ------------
TOTAL EQUITY 13,217 14,457 13,900
============ ========== ============
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 October 2016
Unaudited Audited Unaudited
Six months Year Six months
ended ended ended
31 October 30 April 31 October
2016 2016 2015
GBP'000 GBP'000 GBP'000
Cash flow from operating
activities
Net (loss)/profit after
tax from ordinary activities (816) 1,227 679
Adjustments for:
Depreciation and amortisation 648 1,201 666
Interest expense - 2 4
Income tax expense - (31) 82
Operating (loss)/profit
before changes in working
capital and provisions (168) 2,399 1,431
Decrease/(increase) in
trade and other receivables 163 (706) 45
(Increase)/decrease in
inventories (363) 35 79
(Decrease)/increase in
trade and other payables (780) (115) 578
Cash generated from operations (1,148) 1,613 2,133
Income taxes (paid)/received - 145 (6)
Cash flows from operating
activities (1,148) 1,758 2,127
------------ ---------- ------------
Cash flow from investing
activities
Payment for property,
plant and equipment (81) (205) (65)
Sale of property, plant
and equipment - 43 58
Research and development
expenditure (644) (945) (446)
(725) (1,107) (453)
------------ ---------- ------------
Cash flow from financing
activities
Share issues - 89 90
Repayment of finance
lease creditors (55) (182) (110)
Dividend paid (469) (460) (461)
Interest paid - (2) (4)
(524) (555) (485)
------------ ---------- ------------
(Decrease)/increase in
cash and cash equivalents (2,397) 96 1,189
============ ========== ============
STATEMENT OF CHANGES IN EQUITY
Share Share Merger Foreign Retained Non-controlling Total
capital premium reserve exchange earnings interest
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 May 2016 4,687 553 801 (173) 8,549 40 14,457
Dividends paid - - - - (469) - (469)
Total comprehensive
income for
the period - - - 45 (816) - (771)
--------- --------- --------- ---------- ---------- ---------------- --------
As at 31 October
2016 4,687 553 801 (128) 7,264 40 13,217
--------- --------- --------- ---------- ---------- ---------------- --------
At 1 May 2015 4,602 549 801 (182) 7,782 40 13,592
Share capital
issued 86 4 - - - - 90
Dividends paid - - - - (461) - (461)
Total comprehensive
income for
the period - - - - 679 - 679
--------- --------- --------- ---------- ---------- ---------------- --------
As at 31 October
2015 4,688 553 801 (182) 8,000 40 13,900
--------- --------- --------- ---------- ---------- ---------------- --------
NOTES TO THE ACCOUNTS
1. BASIS OF ACCOUNTS
The financial information for the six months ended 31 October 2016 and 31 October 2015 does not constitute the Group's statutory financial statements for those periods within the meaning of Section 434(3) of the Companies Act 2006 and has neither been audited or reviewed pursuant to guidance issued by the Auditing Practices Board. The annual financial statements of Newmark Security Plc are prepared in accordance with IFRS as adopted by the European Union. The principal accounting policies used in preparing the interim results are those that the Group expects to apply in its financial statements for the year ended 30 April 2017 and are unchanged from those disclosed in the Group's Annual Report for the year ended 30 April 2016.
The comparative financial information for the year ended 30 April 2016 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2016 have been filed with the Registrar of Companies. The Independent Auditors' Report on that Annual Report and Financial Statement for 2016 was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2)-498(3) of the Companies Act 2006.
After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly condensed consolidated financial statements.
2. TAXATION
The tax charge is impacted by the benefits of reliefs on research and development expenditure, and the effect of items not deductible for tax purposes.
3. EARNINGS PER SHARE
Earnings per share has been calculated based on the weighted average number of shares in issue during the period, which was 468,732,316 shares (2015: 461,646,446).
4. DIVIDENDS
No interim dividend is proposed (2015: Nil).
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BUGDBDUXBGRG
(END) Dow Jones Newswires
January 30, 2017 10:54 ET (15:54 GMT)
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