Newmark Security Share Discussion Threads

[hedgehog 100] 26/1/2023 17:35

If Grosvenor Technology is spun-out of NWT in a US floatation, then this should be a key to an immediate and immense unlocking of its value.

GT's £14.56M. of revenues last year equates to c. US$18M. at current exchange rates, and growing rapidly, so it has both the size and growth prospects to command a quite generous tech-style rating.

Which in US terms could equate to a few or several US$10s of millions of valuation.

And if it delivers upon its growth prospects, then that could rise to hundreds of millions during this decade.


Informed investors would doubtless view GT status as a spin-out as a major bull point, as spin-outs on average greatly outperform the market as a whole:-

"Spin-Offs Outperforming The Market This Year

Joe Cornell Contributor

Mar 5, 2019, 10:38am EST

You can beat the Street. At a time when many professional investors lament that the proliferation of ETFs and widespread use of screening techniques have made it harder to find bargains in the stock market, one simple investing approach continues to outperform: spin-offs.

Spin-offs have long been a fruitful investment area; a number of academic studies show that they historically have generated far better returns than the overall stock market. A spin-off occurs when a corporation issues stock in a subsidiary to its shareholders to create a new public company. A related corporate event is an IPO carve-out, through which a company sells the public a stake in a unit, while retaining the rest of the division. (Sometimes, the remainder is later distributed to shareholders).

The Bloomberg U.S. Spin-Off Index, composed of companies spun off from larger companies within the past three years, has outperformed the broader market by nine percentage points since the start of the year through Tuesday (February 26th). The 35 member index contains equities with a value over $1 billion that were spun-off from U.S. companies. ..."

[hedgehog 100] 26/1/2023 15:24

A variant of the option of selling NWT's Safetell subsidiary would be to spin-out NWT's Grosvenor Technology subsidiary as an independent listed company.

This should be comparatively simple to do, and indeed GT already has its own independent website (as indeed does Safetell), which is very impressive:-


And GT looks ideal for a US listing, generating over half (£8.7M. of £14.56M.) of its revenues last year in North America.

Indeed GT's Human Capital Management (HCM) arm actually has its own North American website:-

"Human Capital Management

People and data management to suit every environment and budget

Get in touch North American website"



"THE GT8 IS HERE

GT8 with Touchless Facial Recognition

Your people. Their data. We help you manage both.

Secure data collection, collation, processing and dissemination is at the heart of GT Clocks’ offering. Put simply, we help turn diverse data into real information while increasing security, ensuring compliance and reducing time and cost for our partners

GT Clocks serves the Human Capital Management (HCM) market in North America and across the globe. We provide hardware, software, and services to create solutions that match the most complex needs of HCM solutions providers and end-users – from SMBs to Global Enterprises.

Trusted by some of the world’s biggest brands, we have created a cloud-enabled software suite of services that provides complete confidence when handling the sensitive data of people and processes."

[hedgehog 100] 25/1/2023 19:11

Another regulatory driver for NWT, to the EU time clock judgement, is biometric data privacy requirement: e.g. the GDPR (General Data Protection Regulation), and U.S. regulation:-


23/01/2023 07:00 UK Regulatory (RNS & others) Newmark Security PLC Final Results LSE:NWT Newmark Security Plc

" ... In an increasingly risk-aware enterprise environment, we have been working hard to broaden our reach and reputation as a trusted security partner, becoming a go-to brand for customers who are seeking this control to simplify the growing complexity of security and compliance requirements in the intersection between physical and digital worlds. ..."




10/09/2021 06:00 UK Regulatory (RNS & others) Newmark Security PLC Final Results LSE:NWT Newmark Security Plc

" ... Managing data privacy and security

Another element of building a strong reputation is how we manage data privacy and data security, in particular biometric data, such as fingerprints and face identification. In the US, there are different rules for biometric data capture and what you can do with it, depending on which state you are in, while in Europe and the UK, we have to adhere to General Data Protection Regulation ("GDPR") rules.

It is complex, which is why we have also invested significantly in our workflow management of biometric data. That has meant gathering the consent of people for using their data in the US and Europe, and ensuring that we have annual penetration testing of our systems - both our timeclocks and our Cloud platforms. We are dealing with this ahead of any potential Federal legislation in the US, reassuring our customers that we are secure, and future proofing our systems. ..."




"Biometric Information Privacy Act

... Proposed Federal Regulation

The National Biometric Information Privacy Act

On October 3, 2020, Senator Jeff Merkley introduced the National Biometric Information Privacy Act of 2020 (Senate Bill 4400).[11] While the Act contains provisions similar to BIPA [12] it is more expansive than BIPA.[13] If passed, the Bill would be the first of its kind to regulate biometric information on a national scale.[14] ..."

[hedgehog 100] 25/1/2023 17:41

Thanks David.

I tend to make more personal research and posting effort when I feel that a good company is overlooked, and with little posting by others.
It seems to serves more purpose then, and it's nice to 'put something back' by helping to 'educate the market'.

It's quite time-consuming though, so generally I don't put in this much effort for more than one or two stocks at a time.

Apart from NWT, the stock I've posted on most over the last few months is ZEN, but not ADVFN - over on LSE.

[davidosh] 25/1/2023 17:22

Hedgehog100.....You have an amazing ability to spot everything at Newmark and you are clearly very positive on the company.

Are there any other stocks that you follow so closely and with such knowledge?

[hedgehog 100] 25/1/2023 16:17

And Protime also offers its hardware as a rental model, which is an ideal complement to NWT's targeting of greater recurring revenues:-

"To maximize flexibility we offer our hardware both in purchase as in rental. The rental (Hardware as a Service or HaaS) model offers additional benefits like permanent online monitoring and quick repair or replacement."




"Generating long-term, recurring revenue streams is part of an overarching strategy that is dedicated to building a business that has stability and sustainability at its core."

[hedgehog 100] 25/1/2023 15:36

Like NWT, Protime looks to be strong on the provision of biometric technology solutions:-

"Is biometrics an asset to your company?

21 September 2022

... Is biometrics indispensable now?

Not necessarily, but it does have several relatively attractive advantages:

✔ A real convenience for its users: the risk of forgetting one's head or hands remains very low.

✔ Maximised security because it is practically impossible to falsify. No more risk of losing or having your access badge stolen.

✔ Save time because you don't have to worry about remembering or resetting passwords. ..."




" ... Newmark plans to continue its strategy of investing heavily in research and development allowing the Company to stay ahead of the curve and ensure the highest levels of secure technologies for its customers. The Company is continually innovating in fields such as biometrics, cloud services and mobile authentication to ensure its products are at the forefront of the sectors it operates in. ... "

[hedgehog 100] 25/1/2023 08:49

23/01/2023 07:00 UK Regulatory (RNS & others) Newmark Security PLC Final Results LSE:NWT Newmark Security Plc

" ... We have developed for Protime, our largest European partner, an additional functionality within our Android feature set that enables them to adopt the new GT8 time clock. ..."




Protime looks like a top partner for NWT to have:-

"Birth and growth

Founded in 1995, Protime is today a European market leader in time registration and personnel planning.

Our tools are now used in almost 40 countries. ..."

"Our vision

To be great place to work ...

To be the number one provider of time management solutions in Europe ..."

[melloteam] 24/1/2023 13:53

Just to let shareholders and prospective investors know that Newmark Security will be one of the companies presenting on MelloMonday on Monday 6th February 2023 at 5pm.


The event will feature Investment Director, Stephen English; company presentations from Impax Asset Management, i3 energy plc and Van Elle; and our popular Mello BASH (Buy, Avoid, Sell, Hold)!


If you would like a half price ticket, use code MMTADVFN50.


There are lots of interesting sessions and all annual pass holders and individual ticket holders will be sent the recordings within 48 hours of registering.


For a limited time you can purchase a reduced Spring Annual Pass (May 2022-April 2023) that gives access until April 2023 for just £29! Use code AP29. Also includes bonus events and exclusive discounts to partner organisations.



Click here to view our other upcoming events this year:

[hedgehog 100] 24/1/2023 11:53

Also from the history page of NWT's website:-

"Our History"

"2002
Vema business sold for £6M and Vema NV de-listed"




30 Apr 2002 7:00 am RNS Disposal

"Disposal of Business

Newmark Technology Group Plc's 51% owned subsidiary Vema N.V ('Vema' or 'the
Company')has today announced the disposal of its trading business to the Assa
Abloy AB Group ('Assa Abloy') for approximately €10 million (£6 million) cash.

Vema is a specialised distributor of security products using a consultancy based
approach to advise customers on the best solution to their installed security
locking needs. Vema is a major distributor for Assa Abloy's subsidiary, Fritz
Fuss Gmbh & Co ('Eff Eff'), a leading lock manufacturer based in Germany. ..."




With about twenty years elapsing since NWT's Vema and Drion sales, perhaps NWT could be due another such subsidiary sale, i.e. Safetell.

[hedgehog 100] 24/1/2023 10:21

When NWT acquired Safetell in 2000, part of the rationale was that it would be a natural fit with the 1999 Drion acquisition.
But then three years later NWT disposed of Drion.


Some extracts from the history page of NWT's website:-

"Our History"

"2003
Disposed Drion"

"2000
Acquired Safetell International Limited"

"1999
Acquired Drion SA"




28 Feb 2000 7:01 am RNS Interim Results - to 31 October 1999 & Other News

"... ACQUISITION OF SAFETELL INTERNATIONAL LIMITED

The Directors of Newmark, the developer of electronic and other security
products, are pleased to announce that the company has acquired the entire
issued share capital of Safetell International Limited ('Safetell'). Safetell
has two wholly owned subsidiaries, Safetell Security Screens Limited and
Safetell Limited (together with Safetell, 'the Safetell Group').

The Safetell Group specialises in the provision and maintenance of physical
security equipment for the protection of staff at transaction counters
primarily in retail finance, retail and public authorities. Historically the
Safetell Group's core product has been the Eclipse Rising Security Screen
which is designed to provide protection for cash transaction counter staff
against armed robbery. The main customers for this product have been building
societies in the UK. The Safetell Group has developed new products in recent
years including:

- Interscreen, which provides an open plan environment for interviews whilst
maintaining protection for staff in non-cash environments against acts of
violence;
- RollerCash, which is designed to fractionalise a cashier's float into a
secure location at the workstation to minimise loss through robbery; and
- CounterShield, which is aimed at the high value/high risk retail market such
as petrol retailers and off licences.

In the year ended 31 March 1999, the Safetell Group made profits before tax of
£168,000 and had net assets of £922,000.

The total consideration of £1.5 million, which is payable in cash on
completion, is being financed by a bank loan repayable over seven years.

The Directors of Newmark believe that the acquisition will be a natural fit
with Ateliers Drion which was acquired in April 1999. ..."




30 Sep 1999 2:48 pm RNS Final Results
" ... The highlight of the period was the acquisition of Ateliers
Drion S.A. in April 1999. Drion is a natural extension of the business of the
Group and the acquisition will provide entry into the Belgian market,
significantly increasing our European presence. ...
Drion is an established business specialising in the production and
installation of physical and electronic security equipment. ..."

[hedgehog 100] 24/1/2023 10:03

Does anyone have any views on a potential sale of the Safetell subsidiary?

Retaining the Grosvenor Technology side of the business: hardware & software for human capital management and access control solutions.

Grosvenor accounts for the lion's share of last year's revenues, i.e. £14.56M. out of £19.1M., and has the most exciting growth prospects.

And a Safetell disposal would give NWT a tighter focus, which investors like, and a focus on technology - with increasingly more software - both of which could help with a rerating upwards.

And as HCM North America generated £8.7M. of last year's revenues, this would mean that over half of NWT's revenues would be North American, which could also potentially facilitate a rerating upwards towards a more US tech rating.
Especially if perhaps combined with a dual-listing in North America.

In addition, a Safetell disposal could potentially generate million of pounds of proceeds, e.g. an amount similar to NWT's current market cap.

Some of this could perhaps be paid out as a special dividend, and the rest invested into the HCM and access control businesses.

[russman] 23/1/2023 18:50

the story is in the detail.

[hedgehog 100] 23/1/2023 17:31

Nice to see NWT close above 40p today (up 1.5p to 41p), for the first time since last January.

With the 40p level cleared, there now looks to be little resistance between here and the 60p level.




And the period of about one year since the disappointment a year ago is significant, as this one year period is often the sort of time period that needs to elapse before a concerted share price recovery:-

"What to do when one of your stocks warns on profit

We discuss how share prices react in the aftermath of a profit alert

06 June 2019|Feature

... RECOVERY FROM A WARNING DEPENDS ON CIRCUMSTANCES

A study by UK finance professors George Bulkley, Richard Harris and Renata Herrerias looked at 455 profit warnings issued between 1997 and 1999 and tracked the stocks until 2001. Unlike some of the other studies that we discussed, this study looked further ahead. It tracked future earnings announcements that were released to the market.

It found that between 12 and 24 months after a profit warning, the average cumulated excess daily returns of these stocks was a positive 23% relative to the market.

In other words, the stocks showed strong signs of recovery between one and two years after the warning. This can be explained by analysts being slow to change their opinions, even in the face of new information. ..."




The period of a year gives sufficient time for the share price to deflate, and for business recovery to take place and be sufficiently reported.

And it's also partly psychological: the one year period gives sufficient time for 'emotional healing'; and there's an element of 'self-fulfilling prophecy' re standard expectations of the common time period before recovery.

[hedgehog 100] 23/1/2023 15:10

23/01/2023 07:00 UK Regulatory (RNS & others) Newmark Security PLC Final Results LSE:NWT Newmark Security Plc

" ... Investments in research and development GBP0.76m (2021: GBP0.74m) ...

In the year ended 30 April 2022 (FY22), following three years of substantial investment in product innovation and software development, we have enhanced our solutions offering across all lines of business. This puts the business in a very strong position to execute on its strategic plan without requiring significant new development. This is already driving new client contracts and is building an extremely healthy pipeline for the year ahead. ...

Research & Development (R&D)
... The investment this year has been focused on the cloud development of GT Connect, our upgraded SaaS platform which will be launched in FY23. There has also been further development on facial recognition technology for our clocks. ..."




NWT's R&D investment is a major bull point here, so it's good to see it increased slightly last year.

NWT market capitalisation at the current share price of 39p: £3.65M.

Divided into NWT's year end 30.4.22 R&D spending of £0.76M.

= PRR (price-to-research ratio) of 4.8.

This highlights NWT's bullish growth prospects.


From the legendary tech stocks guru Conor McCarthy:

"Calculate annual R & D expenditure per share and compare it to the share price.
If the PRR (price-research ratio - share price divided by R and D per share) is 5 or less it is nearly always worth buying the shares. This applies particularly to recovery situations. As long as an exploration company has the wherewithal to drill holes, there is always the possibility it will strike it lucky. The same goes for an out-of-favour technology company. As long as it can continue to invest in R and D there is the chance it will come up with a blockbuster product. The lower the PRR the more development bang you get for your buck."

[hedgehog 100] 23/1/2023 12:57

So NWT has decided to release the finals results today separately from the interim results.

That's probably for the best, as there's a lot to absorb here - about ten pages or so of info.

The interim results are due by the end of January under AIM rules (i.e. within 3 months of the half year end), and there's no reason to think that deadline won't be met.
Which should give a nicely profitable interim results recovery to present to the MelloMonday investor event two weeks today.

As regards the final results themselves: the loss has clearly been well flagged up for a long time, but the second half improvement announced on 24th. May has been delivered as promised, and in a very strong way:-
I.e. the H1 pre-tax loss of £0.9M. has been slashed by two thirds in H2 to £0.3M., to give a full year pre-tax loss of £1.2M.
And this improvement has continued since the year end, with a return to profitability.

If this half-on-half pre-tax improvement of £0.6M. continues this year, this would result in a H1 pre-tax profit of £0.3M., & a H2 pre-tax profit of £0.9M.


23/01/2023 07:00 UK Regulatory (RNS & others) Newmark Security PLC Final Results LSE:NWT Newmark Security Plc

"Creating the next generation of safe workplace ecosystems

Newmark Security plc (AIM: NWT), a leading provider of electronic and physical security systems, is pleased to announce its audited results for the year ended 30 April 2022 ("FY 2022) ...

The Group is currently trading ahead of budget and has returned to profit after tax and operating cashflow generation in FY23. ..."

[hedgehog 100] 22/1/2023 14:06

"MELLOMonday
INVESTING IN GOOD COMPANY
Monday 6th February 2023, 5pm – 9pm"
"Stephen English
Investment Director, Stella Asset Management
... Stephen is an Investment Director at Stellar Asset Management, responsible for running their AIM IHT fund. ... "



"UK Tax Benefits Guide To Investing On AIM (2023)

... there are number of favourable tax reliefs that the UK government have implemented to encourage investment in smaller growth companies through the FTSE AIM Market, which we cover in this article on AIM tax benefits.

Inheritance Tax (IHT) Relief:

Business Property Relief (BPR) was originally designed to enable family businesses to be passed on without creating an Inheritance Tax liability, whereby assets have to be sold to pay for the tax.

Notably, its use has since widened to cover unquoted shares – a status AIM-listed companies possess. As such, providing the shares have been held for two years, many AIM investments are able to benefit from BPR, meaning that they are 100% exempt from Inheritance Tax.

It is worth pointing out that the two-year qualifying period does not mean that one has to hold the shares of a specific company for two years, as the shares of one qualifying company can be replaced with the shares of another qualifying company.

But which companies qualify? Unfortunately, there is no definitive list of which companies qualify for Business Property Relief, largely due to the qualification status of a company easily changing over time. For instance, non-qualification would apply to a company that is being sold or wound up, as well as a company with dual trading on a recognised overseas exchange. Non-qualification also applies to companies who mainly deal with securities, stocks or shares, land or buildings, or in making or holding investments. ..."




NWT, as a qualifying AIM share, would be eligible for the Stella Asset Management AIM IHT fund, run by Stephen English.
And note that the AIM IHT relief applies to both existing shares bought on the stock market, as well as to new subscriptions.


But the other two companies presenting on 6th. February, ahead of NWT, although they are both AIM shares, would not qualify for this relief:-
1. Impax Asset Management (IPX) because fund management companies do not qualify.
2. I3 Energy (I3E) because it is dual-listed on a recognised stock exchange (Toronto).

[hedgehog 100] 22/1/2023 11:36

"MELLOMonday
INVESTING IN GOOD COMPANY
Monday 6th February 2023, 5pm – 9pm"

"Stephen English
Investment Director, Stella Asset Management

Stephen English: Twinkle, Twinkle, small-cap stars

Stephen English will present “Twinkle, Twinkle small-cap stars” centred on cyclical/structural reasons why small-caps should out-perform large caps over the coming decade and key learnings from the recent ‘everything bubble’ which is now deflating.

Stephen is an Investment Director at Stellar Asset Management, responsible for running their AIM IHT fund. He believes in trying to give back to the investor community, having delivered keynote addresses at past Mello conferences."




NWT's 6th. February presentation event will kick off with the above keynote address, which looks a perfect introduction to highlight two more general NWT attractions:-
1. NWT being a play on the expected small-cap out-performance compared to large caps over the coming decade.
2. NWT being a little-known share that was bypassed by the 'everything bubble', retaining its 'deep value'.

And the other two company presentations, ahead of NWT, will look far less attractive on those above two criteria:-
1. Impax Asset Management (IPX) has a current market cap. of over a billion pounds. It rose exponentially in the 'everything bubble', and despite falling back greatly last year it is still on a highly-rated valuation, with a P/E in the mid 20s, and a market cap. of about seven times its annual revenue.
2. I3 Energy (I3E) has a market cap. of a quarter of a billion pounds. It's share price has quadrupled since mid 2020, and its market cap. is about three times its annual revenue.


That said, the fact that NWT will be presenting with two companies with market caps of c. £1Bn. & £0.25Bn. looks to be quite a coup, and is clearly quite a feather in its cap.

In addition, it's interesting that two of the other three presentations to NWT's will be from asset management companies: i.e. Stella Asset Management and Impax Asset Management.
So it could be an ideal opportunity for NWT to impress these institutional investors, and perhaps stimulate some hefty share buying from one or both of them.
NWT's tax benefits for investors looks a good fit for Stella, and its enabling of remote monitoring can provide environmental benefits, a criteria for Impax.


Impax Asset Management (IPX):-