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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| -2.50 | -2.44% | 100.00 | 95.00 | 105.00 | 102.50 | 100.00 | 102.50 | 10,000 | 13:04:30 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Security Systems Service | 20.31M | 353k | 0.0377 | 26.53 | 9.37M |
From May 2022 to May 2024
TIDMNWT
RNS Number : 3212O
Newmark Security PLC
31 January 2023
This announcement contains inside information for the purposes of Regulation 11 of the Market Abuse (amendment) (EU Exit) Regulations 2019/310.
31 January 2023
Newmark Security plc
("Newmark", the "Company" or the "Group")
Interim Results
for the six months ended 31 October 2022
Newmark Security plc (AIM: NWT), a leading provider of electronic, software, and physical security systems and installations is pleased to announce its unaudited interim results for the six months ended 31 October 2022 ("H1 FY23"). The Board of Newmark is pleased to reiterate positive momentum and the Group returning to profitability.
Financial highlights:
-- Revenue up 10% to GBP10.6m (H1 FY22: GBP9.7m) -- Gross profit margin increased by 5.7% pts to 38.9% (H1 FY22: 33.2%) -- EBITDA of GBP1.1m (H1 FY22 EBITDA loss: GBP0.03m) -- Operating profit of GBP0.5m (H1 FY22 loss: GBP0.6m) -- Profit after tax of GBP0.5m (H1 FY22 loss: GBP0.8m) -- Earnings per share of 4.89 pence (H1 FY22: loss per share 0.17 pence) -- Investment in research and development GBP0.3m (H1 FY22: GBP0.4m) -- Net assets of GBP8.2m (H1 FY22: GBP7.6m)
Key business highlights:
-- Returning to profitability is a testament that our strategic business plan has set the right foundations for sustainable growth
-- Human Capital Management ("HCM") annual subscription-based recurring revenues increased by 260 % year-on-year to GBP1.3m positively contributing to our profit margins
-- Substantially increased net profit margins despite the inflationary cost pressures and higher cost of funding to fuel our growth
-- Continued focus on cost management initiatives and product innovation -- Further customer base expansion driven by our product offering and end-to-end solutions
-- Efficient management of our supply chain makes for stability and uninterrupted sales, underpinning the Group's competitive edge
Operational highlights:
Group performance
Hot Features
Premium
Six months Six months
to to
31 October 31 October Increase/ Percentage
Revenue 2022 2021 (decrease) change
GBP'000 GBP'000 GBP'000 %
People and Data Management
division 8,415 7,129 1,286 18%
Physical Security Solutions
division 2,210 2,568 (358) (14%)
Group revenue 10,625 9,697 928 10%
------------ ------------ ------------ -----------
Group revenue increased by 10% year-on-year to GBP10.6 million (H1 FY22: GBP9.7 million), driven by a strong performance in the People and Data Management division with double-digit growth in both HCM and Access Control.
Gross profit in value terms is up year-on-year and the gross profit percentage has substantially increased by over 5.7 percentage points to 38.9% (H1 FY22: 33.2%). This result is due to a combination of H2 FY22 price rises flowing into higher H1 FY23 revenues, product mix and increased higher margin HCM recurring revenues.
Administrative expenses have decreased by 11% to GBP3.6 million (H1 FY22: GBP4.0 million) driven by a number of cost-saving initiatives. Operating profit before exceptional items of GBP0.5 million (H1 FY22: loss of GBP0.6 million). Finance costs during the period came to GBP0.15 million (H1 FY22: GBP0.06 million). This increase resulted from additional invoice financing borrowings to support higher working capital requirements and higher interest rates.
Group's earnings per share reached 4.89 pence (H1 FY22: loss per share of 0.17p).
People and Data Management division - Grosvenor Technology ("Grosvenor") : Hardware-enabled software and services
Revenue information
Six months Six months
to to
31 October 31 October Increase/ Percentage
2022 2021 (decrease) change
GBP'000 GBP'000 GBP'000 %
People and Data Management
division
HCM US 4,875 4,209 666 16%
HCM ROW 1,507 1,249 258 21%
Total HCM 6,382 5,458 924 17%
------------ ------------ ------------ -----------
Janus C4 1,022 270 752 279%
Sateon Advance 838 558 280 50%
Legacy Janus 173 843 (670) (79%)
Total Access Control 2,033 1,671 362 22%
------------ ------------ ------------ -----------
Division total revenue 8,415 7,129 1,286 18%
------------ ------------ ------------ -----------
Human Capital Management ("HCM")
The business achieved revenue growth of 17% to reach GBP6.4 million (H1 FY22 GBP5.5 million), primarily driven by strong HCM business growth from both the US and Rest of World (ROW) regions as we have been expanding our relationships with Tier 1 software partners.
Our growth is driven by strong market demand for reliable data security solutions and intelligence. We are capitalising on this opportunity to continue winning in the marketplace by being a trusted security partner for our customers, offering cutting-edge, end-to end solutions. Through our advanced secure cloud control systems of people's access, identity and attendance, we are raising the quality and speed of intelligence creating the new workplace ecosystems.
Key achievements during the period included re-platforming our core cloud control software, GT Connect, and evolving warranty and support services with GT Protect. We have seen substantial progress in our HCM hardware-enabled SaaS strategy with HCM annual recurring revenue increasing by 260% year-on-year to GBP1.3 million in April 2022 driven by SaaS and ClaaS (clocks as a service).
We continued our successful partnership with major software vendors enabling us to supply directly to their large customer base. We are working with our partners to increase our share-of-wallet acting as their preferred supplier and new partnerships are being established to help us deliver our growth targets. We are pleased to announce we have signed a GT Connect and support contract with one of the largest US retailers based in Mexico in the second half of FY23. This contract will help accelerate our growth in HCM recurring revenues.
Access Control
The Access Control line of business has been another success story for the first half of the year. Revenue increased by 22% to GBP2.0 million (H1 FY22: GBP1.7 million).
Janus C4, our Security Management System (SMS), has seen continued year-on-year revenue growth of 297%, to GBP1.0 million. The onboarding of new partners has been driven by our ability to conduct face-to-face sales visits and conduct installations after many months of disruption. The increase in sales is also due to upgrades from our legacy Sateon and Janus ranges.
Grosvenor Product update
During H1 FY23, Grosvenor has undertaken the following product developments:
-- Advanced facial recognition in GT Clocks -- Changed to a modular design for GT Clocks, which reduces development costs for new devices
-- The new GT Connect secure cloud control platform, released in the second half of 2023 is highly scalable with modern cloud architecture, advanced multi-tenanted hosting and an enhanced security model operating on a microservices framework
-- Accelerated product migration of Janus C4, simplifying transition and released our new advanced driver that enhances the performance at all sites. In addition, we launched our new software support agreement providing additional revenue streams
Physical Security Solutions division - Safetell - Diversifying our product portfolio
Revenue information
Six
months Six months
to to
31 October 31 October Increase/ Percentage
2022 2021 (decrease) change
GBP'000 GBP'000 GBP'000 %
Physical Security Solutions
division
Products 1,483 1,821 (338) (19%)
Service 727 747 (20) (3%)
Division total revenue 2,210 2,568 (358) (14%)
------------ ------------ ------------ -----------
Safetell revenue has decreased by 14% to GBP2.2 million compared to the corresponding prior period. We are in the process of transforming the division with a revised strategic plan, led by our new, highly experienced management and sales team that is setting the direction for sustainable growth. Our traditional work of installing and maintaining rising screens has continued to be impacted by the reduction in the number of bank and post offices across the country but we have now further diversified our product offering by bringing auto door and entrance control into our product portfolio. The demand for these products has been continuously increasing so we have shifted our product offering to capture this market opportunity.
We have also seen significant demand for our safety screens in the retail sector given the current economic climate and the need to protect their staff. We are pleased with the progress made so far as we delivered two large retail projects in H1 FY23, with another one secured for H2.
Despite the revenue decline in the six months to 31 October 2022, gross margins have increased from 38.7% in H1 FY22 to 41.9% in H1 FY23. This is a result of the implementation of operational efficiencies and cost saving initiatives.
Safetell Product update
A strategic priority in our long-term plan is to grow service and maintenance work in the UK autodoor servicing market, estimated at twice the size of Safetell's traditional target markets .
Major initiatives to strengthen our competitive position in fast-growing security markets have included:
-- Focusing on the retail sector following strong market demand -- New strategic partnerships and onboarding of new clients -- Introduction of new product lines -- Investment in human capital, strengthening our sales organisational structure
-- Investment in sales and marketing to support the two key areas (automatic door servicing and entrance control)
Balance sheet and financing
Inventory increased during the period by GBP0.1 million to GBP3.9 million at 31 October 2022 to secure the purchase and adequate supply of certain components in advance of the usual lead times in response to the continued global supply chain challenges.
Cash at 31 October 2022 was GBP0.1 million, down GBP0.1 million during the period since 30 April 2022. The Group has an unused GBP0.2 million UK overdraft facility at the balance sheet date.
Total borrowings decreased by GBP0.3 million in the period to GBP5.1 million at the balance sheet date primarily due to CBILS loan repayments which started in September 2021. Subsequent to the balance sheet date, in January 2023, the UK invoice financing facility was increased by GBP0.6 million to GBP2.3 million to provide further working capital headroom as the Group continues to grow. The Group also has a $2 million US invoice financing facility.
Current trading
-- Robust year-to-date trading performance -- Increased gross margins and positive operating performance
-- The transition to high-margin hardware-enabled SaaS HCM business continues, positively contributing to our profitability
-- Sufficient inventory levels allow us to provide an uninterrupted supply of products to our customers
Maurice Dwek, Chairman of Newmark, commented:
"I am pleased to announce a strong trading and financial performance over this period which highlights our focus on our strategic priorities, customer service excellence, product innovation and complete product offering. We are effectively managing the supply chain, pricing and spending across our business alongside with our focus on efficiency, resulting in these positive results today.
Looking ahead, we are pleased with our robust commercial pipeline and trajectory of high-margin recurring income reflected in the year-to-date performance. Combined with our cost-saving initiatives, strong global market demand for internet-enabled software control devices and investment in human capital, we expect 2023 to be a year of profitable growth".
Newmark Security Plc Tel: +44 (0) 20 7355 Marie-Claire Dwek, Chief Executive 0070 Officer www.newmarksecurity.com Paul Campbell-White, Chief Financial Officer Allenby Capital Limited Tel: +44 (0) 20 3328 (Nominated Adviser and Broker) 5656 James Reeve / Lauren Wright (Corporate Finance) Amrit Nahal (Sales & Corporate Broking)
About Newmark Security plc
Newmark is a leading provider of electronic, software and physical security systems and installations 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: https://newmarksecurity.com/
Safe. Seamless. Secure
CONSOLIDATED INCOME STATEMENT
For the six months ended 31 October 2022
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2022 2021 2022
Note GBP'000 GBP'000 GBP'000
Revenue 10,625 9,697 19,145
Cost of sales (6,491) (6,474) (12,726)
Gross Profit 4,134 3,223 6,419
Administrative expenses (3,616) (4,043) (7,633)
Profit/(loss) from operations before
exceptional items 518 (637) (1,090)
Exceptional redundancy costs (183) (124)
----------------------------------- ----- ------------- ------------- ---------
Profit/(loss) from operations 518 (820) (1,214)
Finance costs (147) (59) (220)
Profit/(loss) before tax 371 (879) (1,434)
Tax credit 87 104 630
Profit/(loss) for the period/year 458 (775) (804)
------------- ------------- ---------
Attributable to:
- Equity holders of the parent 458 (775) (804)
------------- ------------- ---------
Earnings per share
- Basic (pence) 2 4.89 (0.17) (0.32)
- Diluted (pence) 2 4.89 (0.17) (0.32)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 October 2022
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2022 2021 2022
GBP'000 GBP'000 GBP'000
Profit/(loss) for the period/year 458 (775) (804)
Foreign exchange on the retranslation
of overseas operation 147 43 143
Total comprehensive income for the
period/year 605 (732) (661)
----------- ----------- ---------
Attributable to:
- Equity holders of the parent 605 (732) (661)
----------- ----------- ---------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 October 2022
Unaudited Unaudited Audited
31 October 31 October 30 April
2022 2021 2022
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 2,115 1,058 2,088
Intangible assets 5,615 5,630 5,564
Deferred tax 406 205 410
Total non-current assets 8,136 6,893 8,062
----------- ----------- ---------
Current assets
Inventory 3,880 3,689 3,983
Trade and other receivables 4,504 4,188 3,979
Cash and cash equivalents 63 211 157
Total current assets 8,447 8,088 8,119
----------- ----------- ---------
Total assets 16,583 14,981 16,181
----------- ----------- ---------
LIABILITIES
Current liabilities
Trade and other payables 3,211 3,306 3,105
Bank overdraft - 448 -
Other short-term borrowings 2,930 1,604 2,958
Total current liabilities 6,141 5,358 6,063
----------- ----------- ---------
Non-current liabilities
Long term borrowings 2,151 1,965 2,447
Provisions 100 100 100
Total non-current liabilities 2,251 2,065 2,547
----------- ----------- ---------
Total liabilities 8,392 7,423 8,610
----------- ----------- ---------
TOTAL NET ASSETS 8,190 7,558 7,571
----------- ----------- ---------
Capital and reserves attributable
to equity holders of the company
Share capital 4,687 4,687 4,687
Share premium reserve 553 553 553
Merger reserve 801 801 801
Foreign exchange difference reserve (12) (259) (159)
Retained earnings 2,121 1,736 1,649
Total attributed to equity holders 8,150 7,518 7,531
Non-controlling interest 40 40 40
TOTAL EQUITY 8,190 7,558 7,571
----------- ----------- ---------
CONSOLIDATED CASH FLOW STATEMENTS
For the six months ended 31 October 2022
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2022 2021 2022
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Net profit/(loss) after tax from
ordinary activities 458 (775) (804)
Adjustments for: Depreciation, amortisation
and impairment 569 606 1,248
Exceptional items - 183 124
Interest expense 147 55 220
Gain on sale of property, plant
and equipment (15) 2 (30)
Share based payment 14 - 7
Income tax (credit)/expense (87) (104) (630)
Operating profit/(loss) before changes
in working capital and provisions 1,086 (33) 135
(Increase)/decrease in trade and
other receivables (525) (445) (29)
Decrease/(increase) in inventories 103 (545) (856)
Increase/(decrease) in trade and
other payables 106 (87) (658)
Cash generated from operations
before exceptional items 770 (1,110) (1,408)
Exceptional items - (183) (124)
Cash generated from operations 770 (1,293) (1,532)
Income taxes received - 374 871
Cash flows from operating activities 770 (919) (661)
Cash flow from investing activities
Acquisition of property, plant and
equipment (173) (265) (561)
Sale of property, plant and equipment 15 - 30
Research and development expenditure (304) (417) (766)
(462) (682) (1,297)
----------- ----------- ---------
Cash flow from financing activities
Bank loans repaid (200) - (267)
Bank overdraft received - 448 -
Principal paid on lease liabilities (158) (267) (376)
(Repayments)/proceeds from invoice
discounting (34) 1,226 2,263
Interest paid on lease liabilities (26) (39) (48)
Interest paid (127) (16) (84)
(545) 1,352 1,488
----------- ----------- ---------
(Decrease)/increase in cash and
cash equivalents (237) (249) (470)
Cash and cash equivalents at beginning
of period/year 153 484 484
Exchange differences on cash and
cash equivalents 147 (24) 143
Cash and cash equivalents at end
of period/year 63 211 157
----------- ----------- ---------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Amounts
attributable
Foreign to owners
Share Share Merger exchange Retained of the Non-controlling Total
capital premium reserve reserve earnings parent interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 May 2022 4,687 553 801 (159) 1,649 7,531 40 7,571
Profit for
the period - - - - 458 458 - 458
Other
comprehensive
income - - - 147 - 147 - 147
Transactions
with owners
Share based
payment - - - - 14 14 - 14
Total
comprehensive
income for
the year - - - 147 472 619 - 619
-------- -------- -------- --------- --------- ------------- ---------------- --------
As at 31
October 2022 4,687 553 801 (12) 2,121 8,150 40 8,190
-------- -------- -------- --------- --------- ------------- ---------------- --------
At 30 April
2021 4,687 553 801 (302) 2,511 8,250 40 8,290
(Loss) for
the period - - - - (775) (775) - (775)
Other
comprehensive
(loss) - - - 43 - 43 - 43
Total
comprehensive
income for
the year - - - 43 (775) (732) - (732)
-------- -------- -------- --------- --------- ------------- ---------------- --------
As at 31
October 2022 4,687 553 801 (259) 1,736 7,518 40 7,558
-------- -------- -------- --------- --------- ------------- ---------------- --------
NOTES TO THE ACCOUNTS
1. BASIS OF ACCOUNTS
The financial information for the six months ended 31 October 2022 and 31 October 2021 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 IFRSs 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 ending 30 April 2023 and are unchanged from those disclosed in the Group's Annual Report for the year ended 30 April 2022.
The comparative financial information for the year ended 30 April 2022 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2021 have been filed with the Registrar of Companies. The Independent Auditors' Report on that Annual Report and Financial Statement for 2022 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. EARNINGS PER SHARE
The earnings per share has been calculated based on the weighted average number of shares in issue during the period, which was 9,374,647 shares (H1 FY22: 468,732,316).
At the Annual General Meeting held on 10 November 2022, the Company sought shareholder approval for a sub-division and consolidation of the Company's share capital ("Capital Reorganisation"). The shareholders passed the resolution, and as of 11 November 2022, the new ordinary shares were admitted to trading on AIM. As a result of the Capital Reorganisation, each existing ordinary share was subdivided into one new ordinary share of 0.1 pence and one new deferred share of 0.9 pence. Immediately following the sub-division, shareholders received one consolidated ordinary share of 5 pence for every 50 ordinary shares of 0.1 pence.
Prior to the Capital Reorganisation, the Company's ordinary share capital consisted of 468,732,350 ordinary shares of 1 pence, and subsequent to the Capital Reorganisation, the Company's ordinary share capital consists of 9,374,647 ordinary shares of 5 pence with voting rights listed on AIM and 468,732,350 deferred shares of 0.9 pence with no voting rights. The new ordinary shares have the same rights and benefits as the ordinary shares which existed before the consolidation, including voting, dividend and other rights.
3. DIVIDENDS
No interim dividend is proposed for H1 FY23 (H1 FY22: Nil).
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END
IR BIGDBXDXDGXG
(END) Dow Jones Newswires
January 31, 2023 02:00 ET (07:00 GMT)
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