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Paychex (NASDAQ:PAYX) has a current market cap. of c. US$40 billion, at c. $111/share:
https://finance.yahoo.com/quote/PAYX?p=PAYX&.tsrc=fin-srch
And it's another nice example of a 100-bagger stock in this sector: more than a 600-bagger at its current s.p.; and at its all-time high of c. $140/share last year a c. 800-bagger.
"Paychex shares jumped more than 17,000% from their first day of trading in the early 1980s though October 2004."
https://www.investors.com/news/management/leaders-and-success/paychex-founder-tom-golisano-processed-opportunity-paychex-winner/
From NWT's latest Investor Meet Company presentation video, 26th. September 2023, Questions & Answers segment:-
Q5: "Do you expect to add new HCM software partners in the US as customers in FY 2024? Is Paychex already a customer?"
A5 (NWT CEO Marie-Claire Dwek): "We're continuing to onboard customers. We've onboarded a couple of new customers this year, and that's part of our growth project. And we're speaking with Paychex on a regular basis."
https://www.investormeetcompany.com/
Paychex would be a huge customer-partner for NWT, but also an ideal match.
And the fact that they're speaking on a regular basis suggests that such a contract win is a real possibility.
If it happens, it would be nice if it could RNSed separately, and would certainly be deserving of this (subject of course to discretion-confidentiality).
"Paychex, Inc. is an American provider of human resource, payroll, and benefits outsourcing services for small- to medium-sized businesses.[2][3] With headquarters in Rochester, New York, the company has more than 100 offices serving approximately 670,000 payroll clients in the U.S. and Europe.[4] In 2019, Paychex ranked in position 700 on the Fortune 500 list of largest corporations by revenue,[5] and the company's revenue for fiscal year 2020 is projected to exceed $4.1 billion.[6]"
https://en.wikipedia.org/wiki/Paychex
"The Peter Lynch Approach to Investing in "Understandable" Stocks
... Summing It Up
Lynch offers a practical approach that can be adapted by many different types of investors, from those emphasizing fast growth to those who prefer more stable, dividend-producing investments. His strategy involves considerable hands-on research, but his books provide lots of practical advice on what to look for in an individual firm, and how to view the market as a whole.
Lynch sums up stock investing and his outlook best:
"Frequent follies notwithstanding, I continue to be optimistic about America, Americans, and investing in general. When you invest in stocks, you have to have a basic faith in human nature, in capitalism, in the country at large, and in future prosperity in general. So far, nothing’s been strong enough to shake me out of it."
The Peter Lynch Approach in Brief
Philosophy and style
Investment in companies in which there is a well-grounded expectation concerning the firm’s growth prospects and in which the stock can be bought at a reasonable price. A thorough understanding of the company and its competitive environment is the only "edge" investors have over other investors in finding reasonably valued stocks.
... Stock monitoring and when to sell
• Do not diversify simply to diversify, particularly if it means less familiarity with the firms. Invest in whatever number of firms is large enough to still allow you to fully research and understand each firm. Invest in several categories of stock for diversification.
• Review holdings every few months, rechecking the company "story" to see if anything has changed. Sell if the "story" has played out as expected or something in the story fails to unfold as expected or fundamentals deteriorate.
• Price drops usually should be viewed as an opportunity to buy more of a good prospect at cheaper prices.
• Consider "rotation"-selling played-out stocks with stocks with a similar story, but better prospects. Maintain a long-term commitment to the stock market and focus on relative fundamental values."
https://home.csulb.edu/~pammerma/fin382/screener/lynch.htm
"The Peter Lynch Approach to Investing in "Understandable" Stocks
... Lynch does not believe in restricting investments to any one type of stock. His "story" approach, in fact, suggests the opposite, with investments in firms with various reasons for favorable expectations. In general, however, he tends to favor small, moderately fast-growing companies that can be bought at a reasonable price.
Selection Process
Lynch’s bottom-up approach means that prospective stocks must be picked one-by-one and then thoroughly investigated--there is no formula or screen that will produce a list of prospective "good stories." Instead, Lynch suggests that investors keep alert for possibilities based on their own experiences--for instance, within their own business or trade, or as consumers of products.
The next step is to familiarize yourself thoroughly with the company so that you can form reasonable expectations concerning the future. However, Lynch does not believe that investors can predict actual growth rates, and he is skeptical of analysts’ earnings estimates.
Instead, he suggests that you examine the company’s plans--how does it intend to increase its earnings, and how are those intentions actually being fulfilled? Lynch points out five ways in which a company can increase earnings: It can reduce costs; raise prices; expand into new markets; sell more in old markets; or revitalize, close, or sell a losing operation. The company’s plan to increase earnings and its ability to fulfill that plan are its "story," and the more familiar you are with the firm or industry, the better edge you have in evaluating the company’s plan, abilities, and any potential pitfalls. ..."
https://home.csulb.edu/~pammerma/fin382/screener/lynch.htm
"AAII Journal - January 1997
The Peter Lynch Approach to Investing in "Understandable" Stocks
By Maria Crawford Scott
No modern-day investment "sage" is better known than Peter Lynch. Not only has his investment approach successfully passed the real-world performance test, but he strongly believes that individual investors have a distinct advantage over Wall Street and large money managers when using his approach. Individual investors, he feels, have more flexibility in following this basic approach because they are unencumbered by bureaucratic rules and short-term performance concerns.
Mr. Lynch developed his investment philosophy at Fidelity Management and Research, and gained his considerable fame managing Fidelity’s Magellan Fund. The fund was among the highest-ranking stock funds throughout Mr. Lynch’s tenure, which began in 1977 at the fund’s launching, and ended in 1990, when Mr. Lynch retired.
Peter Lynch’s approach is strictly bottom-up, with selection from among companies with which the investor is familiar, and then through fundamental analysis that emphasizes a thorough understanding of the company, its prospects, its competitive environment, and whether the stock can be purchased at a reasonable price. His basic strategy is detailed in his best-selling book "One Up on Wall Street" [Penguin Books paperback, 1989], which provides individual investors with numerous guidelines for adapting and implementing his approach. His most recent book, "Beating the Street" [Fireside/Simon & Schuster paperback, 1994], amplifies the theme of his first book, providing examples of his approach to specific companies and industries in which he has invested. These are the primary sources for this article.
The Philosophy: Invest in What You Know
Lynch is a "story" investor. That is, each stock selection is based on a well-grounded expectation concerning the firm’s growth prospects. The expectations are derived from the company’s "story"--what it is that the company is going to do, or what it is that is going to happen, to bring about the desired results.
The more familiar you are with a company, and the better you understand its business and competitive environment, the better your chances of finding a good "story" that will actually come true. For this reason, Lynch is a strong advocate of investing in companies with which one is familiar, or whose products or services are relatively easy to understand. Thus, Lynch says he would rather invest in "pantyhose rather than communications satellites," and "motel chains rather than fiber optics." ..."
https://home.csulb.edu/~pammerma/fin382/screener/lynch.htm
From the "Corporate Governance" page of NWT's website: an excellent exposition of NWT's winning business model & strategy:-
"Principle 1: Establish a strategy and business model which promote long-term value for shareholders
Newmark Security is a leading provider of people and data management and physical security solutions through its subsidiaries, Grosvenor Technology Limited and Safetell Limited, in the UK, and Grosvenor Technology LLC in the USA, with exports to Europe and USA, and worldwide through our established customer base. The Company aims to help address some of the major challenges facing corporations in an environment of ever-increasing global security concerns and add value for all our stakeholders through partnership and innovation. We will continue to develop exceptional and secure products backed up by industry leading support. The Company strategy is focused on delivering growth through the development of new products, providing its customers with much-needed peace of mind whilst also improving business efficiency and flexibility through innovative technology. The three core markets served, Access Control, Human Capital Management (HCM) and physical security, are anticipated by industry analysts to grow significantly in the medium to long-term. The company takes a ‘deep and narrow’ approach in each of these markets through the provision of products and services that are highly developed and specialist, thus delivering tangible added value to its downstream partners and creating barriers to entry to potential competitors.
Grosvenor Technology’s products are at the cutting edge of access control and human capital management technology. The business is well positioned to capitalise on the crossover between these two aspects of electronic security and continued investment ensures that it stays at the forefront of this marketplace. Long term strategies are in place to increase recurring revenues through the provision of more cloud-based services on an ongoing basis, particularly in the HCM sector. This is envisaged to deliver greater shareholder value over time as both quantity and quality of earnings increase through this strategy.
Safetell is one of the industry leaders in high-demand physical security products and is perfectly placed to service the industry. The market for asset security products and services is fast growing with the ever-increasing threat of terrorism and crime placing security high on the priority list for corporate clients. It is the policy of the Company to maintain the highest standards of product quality meeting statutory and regulatory requirements by the control of its sales, purchasing, production, delivery, installation and service activities."
https://newmarksecurity.com/investor-relations/corporate-governance/
Thanks Trojan for flagging up that NWT presentation made last week:-
"Newmark Security presents at the Proactive One2One Investor Forum - October 26th
Published: 14:08 02 Nov 2023
Sergio Braga-Mullin
Marie-Claire Dwek, CEO of Newmark Security PLC (AIM:NWT), delivered a positive update on the company's 2023 annual results at the Proactive One2One Investor Forum.
The company, dedicated to providing secure cloud control for people's access, identity, and timekeeping at work, saw group revenue increase by 6%, hitting £20.3 million. The firm's two market-facing brands, Grosvenor Technology (GT) and Safetell, were key drivers of this growth.
GT, their people and data business, particularly dominant in the US, experienced a 7% top-line revenue growth, reaching £15.6 million, largely driven by their Human Capital Management (HCM) business. HCM sales surged by 10%, totaling £12.6 million.
Safetell, Newmark's physical security brand, also witnessed growth with revenue rising modestly by 3% to £4.7 million. The brand's focus areas include auto doors, screens and counters, and building security.
Dwek celebrated 2023 as a pivotal year, marked by the firm's return to full-year profitability and the successful launch of their strategic cloud platform, GT Connect.
Looking ahead, Dwek expressed confidence in achieving their 2025 growth strategy, emphasizing the firm's increasing recurring revenues and preparation for a more robust 2024."
“All it takes is one big winner to change your life. Find it before others, know it better than others, and hold it longer than others. When diligence, skill, and luck collide. One time.”
- Ian Cassell
"CHRISTOPHER MAYER
100 BAGGERS
STOCKS THAT RETURN 100-TO-1 AND HOW TO FIND THEM
... You should read this book if you want to get more out of your stocks.
Even if you never get a 100-bagger, this book will help you turn up big
winners and keep you away from sleepy stocks that go nowhere. If you
like investing in utility stocks, with their limited upsides, then this book
isn’t for you.
This book will change the way you think about investing in stocks.
You will never look at the problem in quite the same way again. I hope it
will energize and excite you about what’s possible. ...
Phelps found hundreds of such stocks, bunches available in any single year,
that you could have bought and enjoyed a 100-to-one return on
—if you had just held on.
This was the main thrust of our conversation: the key is not only finding
them, but keeping them. His basic conclusion can be summed up in the
phrase “buy right and hold on.” ..."
http://csinvesting.org/wp-content/uploads/2017/05/100Baggers.pdf
Every cloud has a silver lining, and NWT's UKG business loss last year, stemming from the $22 billion merger of Kronos and Ultimate Software in 2020 to create UKG, could be a case in point.
Because it could be the perfect link to flag up the very relevant example of Kronos to US investors.
I.e. the fact that Kronos evolved in a similar way to the direction that Grosvenor Technology is currently moving in:-
"Products
Originally a manufacturer of time clocks, the majority of Kronos' revenue is now derived from software and services. The company provides cloud applications[20] for workforce management and human capital management, as well as consulting, education, and support services to its customers."
https://en.wikipedia.org/wiki/Kronos_Incorporated
Kronos was previously publicly traded, from 1992 to 2007, and 100-bagged during this period.
"In 1992, Kronos became a publicly-traded company on NASDAQ."
https://en.wikipedia.org/wiki/Kronos_Incorporated
"BUSINESS NEWS MARCH 23, 2007 2:12 PM UPDATED 17 YEARS AGO
Kronos to be taken private in $1.8 billion deal
By Reuters Staff 2 MIN READ
PHILADELPHIA (Reuters) - Staffing services firm Kronos Inc. KRON.O said on Friday that it agreed to be acquired by private equity firm Hellman and Friedman LLC for about $1.8 billion. ..."
https://www.reuters.com/article/us-kronos-takeover-pvtequity-idUSBNG11524220070323
Grosvenor Technology's results for its year ending 30.4.23, i.e. pre-tax profit of £2.196M. on revenue of £15.574M., are certainly sizeable enough for it to be spun-out as a separate listed company: and in the USA, which accounts for over half (£8.83M., 56.7%) of GT's revenue.
And it was indicated from NWT's first AGM of this year, in February, that this GT idea might be progressed this year.
So the forthcoming NWT presentation to US investors, in America, could well be an indicator that this idea is being seriously sounded out.
NWT has previously spun-out one of its subsidiaries, in a double global first involving foreign markets.
So a Grosvenor Technology spin-out from NWT, in a US floatation, not only makes perfect sense, but would follow an established NWT modus operandi.
And a GT spin-out in America would likely be a key to an immediate and immense unlocking of its value.
GT has both the size and growth prospects to command a quite generous tech-style rating, in America, which tends to be far more generous in its ratings than UK standards.
Paycor HCM (NASDAQ: PYCR) is a major North American partner of Grosvenor Technology:-
"Paycor & Grosvenor Technology: A Powerful Pair
... “ ... The Grosvenor Technology team is an amazing partner. The collaboration and communication as we worked on the development of our software was great. ...” ..."
https://www.grosvenortechnology.com/insights/paycor-grosvenor-technology-a-powerful-pair/
Paycor reported turnover of US$552.7M. last year, and has a current market cap. of c. US$3.36 billion, at c. US$19/share: i.e. a sales multiple valuation of c. 6, despite making significant losses.
This gives some indication of the hefty valuation that a Grosvenor Technology spin-out from NWT could potentially command in a US float.
Certainly a few or several US$10s of millions of valuation could be very possible.
And if GT delivers upon its growth prospects, then that could rise to hundreds of millions during this decade.
We have of course today entered NWT's H2, which is expected to be stronger than H1, i.e. the inverse of NWT's year ending 30.4.23.
So with the H1 just ended itself looking strong, NWT is looking good for a year of substantial growth in both revenues & profits.
NWT's CEO Marie-Claire Dwek will clearly have a very attractive story to tell when she presents to some US investors 'across the pond' in a few weeks.
Especially as NWT's Grosvenor Technology subsidiary, where all NWT's US revenues are achieved, reported a pre-tax profit of £2.196M. in its year ending 30.4.23:-
26th Sep 2023 7:00 am RNS Final Results
https://www.lse.co.uk/rns/NWT/final-results-s32ymd0rnewx4w0.html
Thanks and well done Dab on that quite superb write-up.
Happy days indeed!
There's been quite a bit of NWT buying this afternoon, after the AGM, with the s.p. closing up 4.5p at 52p, a rise of 9.5%.
Not to be sniffed at in the current challenged markets, and it's good to be back in the 50s nice & quickly.
We complimented the management team on the improved investor approach. The new website, video, RNS services and the resent presentations. They responded positively to this and welcomed input from investors on how they can go further. We recommended a deep dive on the US business would be a great area to cover a future meetings.
The new auditors have done a great job, lower impact, easy to work with and lower cost. Timings are back on track, 1H results should be out in January, full year results out in September 24.
After the session I caught up with another investor. We agreed that the last few years have been transformational for NWT and we have a very bright future ahead. Now's the time to get in given we're pretty sure that there is no need to tap the market for cash to keep the business running and there is nothing baked into the numbers for the stella growth underway.
Just happy days for NWT shareholders.
Hi all,
So I attended the AGM today, here is a quick summary.
The directors appeared very happy with the state of play. Everyone was in good spirits, the business is performing inline/ahead of expectations (they don't do forecasts). Lost UKG income is being replaced and the strategy is working well. All resolutions passed, then the meeting closed and they opened to questions.
The RNS earlier in the day was discussed. It was great that we have updated on UKG but we (the shareholders present) requested that the company disclose further in the 1H results the true revenue impact associated with the loss of UKG so we can see for ourselves the like for like and underlying growth in 1H 23 verses 1H24 with and without UKG. We reiterated that whilst management can see the more detailed growth picture, we as shareholders cannot. This means we must wait until the final results for 2024 to work through and even then the picture would remain murky. Marie-Claire took this on board with nods from Paul so we really hope that we'll get this view as we can only see an outcome that is positive.
We discussed the US business in more detail than ever before. We have 9 FTE based in the US. They are doing an amazing job and across HCM we are now working with 40 software vendors. These US staff is supported from the UK, this provides a very cost efficient way of working. As reported in the RNS today subscriptions are up significantly. As the software vendors are doing much of the business development, and we support from the UK in the background, we do not need to add significantly to the head count as we grow. We have a very scalable and low overhead operating model with reoccurring revenues. Not only is this growing rapidly in the US but we now have the rest of the world (reported as up 35% from a low base to scale on) again without adding much overhead. Given our growing presence in the US, Marie-Claire is out in the US in a few weeks time and will present to some US investors our business and model - exciting stuff.
Both MD's are making an enormous difference, and supporting each others strategies.
We didn't go deep on Safetell other than the automated doors install and maintenance business is scaling and teeing nicely with safety screens as an overall package. We are winning further contracts and all this scale is reducing the sub-scale inefficiencies previously reported. A UK servicing network is being established for national UK businesses/stores and Government contracts.
We talked capital and fundraising and whether this was needed. No need to do anything on either front at present was the confident response. Supplemented by that doesn't mean that where it might make sense from a growth or acquisitions perspective, it wouldn't be ruled out. I took from this that we are well positioned given the cash balance increases YoY recently announced and further positive traction into 2024.
"O NWT's positive momentum from its year ending 30.4.23 has continued though its current half year; and H2, which starts tomorrow, is expected to be even better."
That should say:-
"So NWT's positive momentum from its year ending 30.4.23 has continued though its current half year; and H2, which starts tomorrow, is expected to be even better."
O NWT's positive momentum from its year ending 30.4.23 has continued though its current half year; and H2, which starts tomorrow, is expected to be even better. (This latter point could have been spun more positively than it has been.)
Amidst all the good news about contracts etc., two more detailed points are worth noting:-
• The UKG contract hit occurred in Q3 of NWT's last financial year, rather than Q4, meaning that both Q3 & Q4 were impacted by this in H2.
• HCM subscriptions are up 13% in H1, an annualised growth rate of 27.7%.
But as H2 is expected to be stronger, the full year increase should be significantly more than that.
31st Oct 2023 7:00 am RNS AGM Statement
"Newmark Security plc (AIM: NWT), a leading provider of electronic and physical security systems, is holding its Annual General Meeting ("AGM") today at 10:30 am (UK).
At the AGM, Maurice Dwek, Newmark Chairman, will make the following statement:
"Last year was a period of significant progress across both businesses, culminating in the Group returning to full-year profitability. As we close the first half of the current financial year, I'm pleased to report that the momentum has continued. New clients and contracts have been won across both businesses, and the Group has further strengthened its position to address the growing people and data security market.
"Grosvenor continues to rebuild with a focus on recurring revenues following the anticipated end of the UKG contract. The Company announced in its full year results to April 2020 that it anticipated this contract would reduce over time following the merger in 2020 between Ultimate Software, our original HCM partner, and Kronos, a competitor in time clock products. However, the timing for this was uncertain and it is testament to the quality of services provided by our team that this only happened in Q3 of the last financial year. Notwithstanding this, Grosvenor has seen an excellent performance across its Human Capital Management business lines. This has included the onboarding of new clients and displacing its competition, growing its subscription numbers by c.13% and winning contracts with the London Fire Brigade and Coventry Hospital for its Janus C4 access control solution.
"At the same time, Safetell has fulfilled a large Protection Screens order for a major supermarket chain, rolled out five new ballistic protection systems for a new money exchange client, with a further 22 planned for next year, and won new orders within banking, retail, utilities and public sector verticals.
"The Board notes that due to the timing of new contracts and orders, it expects revenue for the current financial year to be predominantly weighted to the second half. Importantly, we have adequate financial resources in place to deliver on our plans. Whilst continuing to monitor the impact of global macro events closely, we remain cautiously optimistic on the outlook for the rest of the year." ..."
https://www.lse.co.uk/rns/NWT/agm-statement-hupzhufl06ll125.html
Thanks for your posts Hedgehog.
It'll be interesting to see what comes from the AGM tomorrow and any RNS preceding it.
I will of course be attending in person although on the back of the finals my expectations for this year have been somewhat muted given we need UKG to work itself through.
There are a couple of positive factors, the first being the price rises that we have successfully embedded and the second the inventory run down. Both would be good for cash flow. I noted debt servicing costs have quadrupled in the last 3 years, it'd be good to stop wasting £300k on debt servicing.
We have to lift revenues but with the UKG position I believe this will only show up in 2H 24 results. I hope I am wrong and we see the uplift earlier.
I will report back from the AGM tomorrow with a note. If you're not there and have any questions you want asked let me know.
Keep the faith, we'll get there.
"So by not it could potentially be considerably less ..."
That should say: "So by now it could potentially be considerably less ..."
I would add that NWT's net debt of £0.889M. was the position nearly six months ago, i.e. 30.4.23. So by not it could potentially be considerably less, especially with GT's US relocation completed in the previous half year.
In NWT's last financial year, the value of NWT's "Property, plant and equipment" increased from £2.088M. to £2.914M., and I would expect that the US relocation accounted for a lot of this.
"GT Clocks Powers Up with Strategic Office Move
Colin Leatherbarrow
Managing Director
3 February 2023 1 min read
GT Clocks Soars to New Heights with its new Florida Headquarters: In-House Fulfillment, Total Control, and a Growing Team at the Ready
Get ready for GT Clocks’ game-changing move to its brand-new Florida headquarters! Located in Cooper City and accessible from both Fort Lauderdale and Miami airports, this state-of-the-art office boasts three times the space of its previous location. With in-house warehousing and customer order fulfilment now at the team’s fingertips, they’ll have full control over operations and delivery. And that’s not all – new team members are joining the GT team to keep up with growing customer demand and the exciting expansion of their product offerings.
Brian Hack, VP of Operations, commented:
“With demand reaching new heights, our brand-new headquarters will power us to even greater success. By taking control of our operations, we’ll have an eagle-eye view of fulfilment, guaranteeing fast delivery and the unparalleled level of service our customers know and love. This is a pivotal moment in our growth journey, and we can’t wait to see what the future holds.”
With decades of hands-on experience, our cutting-edge technology is developed and distributed from our UK headquarters and supported by our Florida office and teams worldwide. Our unparalleled expertise in the field allows us to continually revolutionize the industry with innovative hardware and software that prepares you for today and the future. Trust us to deliver responsive customer support, in multiple languages and across all time zones, as we help you manage your human capital and secure your assets on a global scale.
Unlock the full potential of your workforce and safeguard your success with GT Clocks – a global leader in human capital management (HCM) solutions and access control. Explore the full range of products and services from GT here."
http://gtclocks.com/insights/gt-clocks-powers-up-with-strategic-office-move/
It's certainly well worth reading NWT's new annual report & accounts, if you haven't already done so.
Note that this includes extra material which isn't in NWT's lengthy final results RNS of 26th. September 2023.
Including statements from the MDs of its subsidiaries Grosvenor Technology & Safetell, & from NWT's CFO:-
"Connected services with everything!
“Looking ahead, our strategy is simple, as we continue to seek
and onboard new HCM partners with exciting prospects
already well-advanced in our pipeline. We will continue to
attach services to all new business and push services to all
partners as a priority. With enhanced capability at the lower
and higher ends of the market, we will actively seek to displace
incumbents, offering competitive alternatives at both ends of
market to achieve full share-of-wallet, seeking to secure
exclusive partner status wherever possible. Our new GT
Connect platform also enables us to explore new opportunities,
such as seeking direct end-user business via partnerships with
Workday, Oracle and SAP using a new Per-Employee-PerMonth
subscription model. The future is expansive and full of
opportunity, and I am particularly proud to lead such a
talented team as we continue to execute strongly and with
disciplined focus.”
Colin Leatherbarrow, MD"
"“With a larger market opportunity and the advantage of much
stronger pipeline visibility as we enter FY24, I am confident
Safetell is now ready to take the next step in meeting
ambitious growth targets we have set ourselves for the year
ahead. Offering an even more competitive range of products,
with improved costs, lead times and services can only lead to
increased success. This will be further leveraged by our
improved sales and marketing capability, as we continue to
keep our customers at the forefront of everything we do,
building a strong brand upon which customers feel entirely
confident to rely for the long-term.”
Nick Shannon, MD"
"“I am very pleased that the steps we took in the second half of
the last financial year to increase customer prices, cut costs
and improve working capital management have resulted in a
return to profitability and net cashflow generation”
Paul Campbell-White, CFO"
Someone here may have got 'spooked' yesterday by the current stock market turmoil: i.e. a minor sell sending NWT down to 47.5p for the weekend, its lowest closing price since 3rd. March this year.
But NWT should release an AGM Statement RNS on Tuesday 31st. October: and the signs are that it will be 'Treat', not 'Trick'.
So this could be the mother of all buy opportunities for NWT.
Or perhaps I should say 'The Mummy' of all buy opportunities, because the value here is scary.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 APRIL 2023
£'000
Total current assets 9,709
Total current liabilities 7,961
Total non-current liabilities 2,637
Total liabilities 10,598
https://www.lse.co.uk/rns/NWT/final-results-s32ymd0rnewx4w0.html
= Net debt £0.889M.
EBITDA of £1.5m (2022: £0.03m loss)
https://www.lse.co.uk/rns/NWT/final-results-s32ymd0rnewx4w0.html
Current market cap. at 47.5p: £4.453M. + £0.889M. = Enterprise value £5.342M.
= NWT EV to EBITDA multiple 3.56
Compare to the EV to EBITDA multiple of a very good value acquisition (Amcomri) expected to float by the end of this year, via RTO into the shell ROC:-
15th Nov 2022 3:56 pm RNS Potential Reverse Takeover & Suspension of Listing
"... The consideration for the Acquisition if it is concluded ("the Price") will be £22,340,625 (based on the forecast pro-forma aggregate EBITDA for FY2022 of £5.401m, an agreed EV to EBITDA multiple of 6.84 and net debt of £14.6m) ...
The terms of the Acquisition value the existing issued share capital of Rockpool at £1m, or approximately £0.0786 per Ordinary Share. ..."
https://www.lse.co.uk/rns/ROC/potential-reverse-takeover-suspension-of-listing-ryf9u6tg0kix1sg.html
The good value of Amcomri reflects the good value of the ROC shell in that deal: not that much more than ROC's cash at the time of the suspension, attributing very little to the value of its listing (on the main market).
But NWT is on a EV to EBITDA multiple of barely half of Amcomri's, despite the fact that is looks to have the better growth prospects.
This further demonstrates how monstrously undervalued NWT is ... even for the season of Halloween.
12th Oct 2023 10:56 am RNS Presenting at MelloMonday Investor Event
"Presenting at MelloMonday Investor Event
Newmark Security plc (AIM: NWT), is pleased to announce that the Company will be attending the MelloMonday webinar, on Monday 16 October 2023 starting at 5pm, taking place via Zoom Webinar.
Marie-Claire Dwek, CEO and Paul Campbell-White, CFO, will be presenting and taking questions from webinar participants at 6:15pm. If you would like to attend, you can register here for a free ticket for the event using code SHR100.
The recording will be sent out to all registrants within 48 hours of the event. ..."
https://www.lse.co.uk/rns/NWT/presenting-at-mellomonday-investor-event-j6hwkkgvkkxoztb.html