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Newmark Security plc

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

Year-end trading update

Top-line growth despite market challenges

Well-positioned to capitalise on market opportunities, building a resilient business model.

Newmark security plc (AIM: NWT), a leading provider of electronic and physical security systems, today provides an update on trading for the year ended 30 April 2022 ("FY 2022").

Highlights:

·    Confirmation of FY 2022 year-on-year revenue growth, driven by Human Capital Management ("HCM") sales in the US.

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

·    Product initiatives are set to increase recurring revenues, an area of strategic focus.

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

As noted in the Company's half year report, announced on 27 January 2022, sharp increases in componentry and freight costs have impacted the Group's margins. However, the Company has implemented a programme of strict cost management and increased its prices to mitigate the effect of higher input and freight costs. This has resulted in reduced losses for the second half of the year compared to H1.

Operations

People and Data Management division - Grosvenor Technology

·      New product development continues in the Human Capital Management and Access Control businesses to capture positive market momentum and increase market share.

·      Launching a new HCM SaaS Cloud platform that will further increase high margin, recurring revenues.

·      Continue to deliver market-leading secure data processing complying with international standards such as ISO27001.

·      Currently exploring the establishment of a new manufacturing facility in the US, a fast-growing and large market.

·      Investing in human capital and infrastructure to drive business growth and underpin the "will-to-win" vision.

Physical Security Solutions division - Safetell

·      Nick Shannon joined in February from G4S Secured Solutions to head up the division. He will lead the strategic focus to build the services side of the business with the aim of increasing the proportion of recurring revenues. 

·      We have successfully launched new products, expanded our client base, and formed new partnerships.

Financial Position

·      Recently secured a $2m US invoice discounting facility to provide additional working capital headroom.

·      Successfully managed supply chain challenges by building inventory to satisfy ongoing customer demand and stay ahead of the competition.

·      Working capital level is expected to ease as we reduce inventory held, allowing for cash flow generation. 

·      We are fully utilising our recent investments in products and infrastructure to fuel our future growth.

·      We are continuing to implement strict cost management that, together with increased selling prices, are expected to mitigate the effect of higher input and freight costs.

·      We expect to see the full benefit of the price rises and cost savings in the year ending 30 April 2023.

Maurice Dwek, Chairman of Newmark, commented:

"I am pleased with the progress in executing our strategy and setting the right foundations for success. We are delivering on our targets for revenue growth and cost management initiatives whilst focusing on our new product pipeline that provides us with the ability to offer complete solutions to our clients continuously.

Our proactive approach during the pandemic demonstrated our agility to manage the business for the long term, building credibility and client preference. We have high confidence in our product portfolio and client-focused strategy, remaining agile and prioritising our investments with discipline to continue to drive sustainable growth.

I am confident that we have taken the right measures, working towards an optimal structure and product mix to drive our business forward. Moreover, we are well placed to further scale our business by identifying the appropriate opportunities that will synergise and complement our product offering."

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: https://newmarksecurity.com/

Safe. Seamless. Secure