Newmark Security Regulatory News (NWT)

Newmark Security plc

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

Trading Update

Newmark Security plc (AIM: NWT), a leading provider of electronic, software and physical security systems, today provides an update on trading ahead of the publication of its results for the year-ended 30 April 2022 ("FY 2022"), subject to finalisation of the audit.

Highlights:

· Strong revenue growth, with revenue of approximately £19 million (2021: £17.6 million), driven by Human Capital Management ("HCM") sales in the US and customer uptake of new products

· Enhanced product offering and end-to-end solutions driving client base expansion

· Delivering recurring income and optimising product mix provides for sustainable growth

As announced on 24 October 2022, the Company expects to release its FY 2022 results at the end of November.

As noted in the Company's year-end trading update, announced on 24 May 2022, sharp increases in componentry and freight costs impacted the Group's margins. However, we have implemented a programme of strict cost control and increased prices to mitigate the effect of higher costs to the extent possible, which has resulted in reduced losses for the second half of FY 2022. The full benefits of price increases and cost measures will be seen in the current financial year.

Operations

People and Data Management division - Grosvenor Technology ("Grosvenor")

Significant process was made during the year in the evolution of Grosvenor's business model, which now encompasses hardware-enabled software and services centres focused on providing customers with 'secure cloud control'. There was ongoing success in the North American HCM operations, which continued to deliver double-digit growth. Grosvenor is launching a new HCM SaaS Cloud Control platform in FY 2023 which is expected to increase high-margin, recurring revenues.

Physical Security Solutions division - Safetell

The Group's strategy is to build the services side of the business and took initiatives during FY 2022 to implement this, which are delivering positive results and supporting the return of Safetell to growth. Demand for security products and services partially recovered during the year compared to the prior year, where demand had been significantly impacted by the effects of the COVID pandemic, and the Group is well positioned to accelerate and scale to meet the increase in demand. Safetell is in the process of introducing new products, new strategic partnerships and improvements throughout the business which are expected to support its growth.

Current trading and financial position

The Group secured a $2 million US invoice discounting facility in February 2022 to provide additional working capital headroom and successfully managed supply chain challenges by building inventory to satisfy ongoing customer demand and stay ahead of the competition.

The Group had £0.2m of cash and cash equivalents at 30 April 2022.

The Group's working capital level is expected to ease as the amount of inventory held is reduced, allowing for improved cash flow generation. We are fully utilising our recent investments in products and infrastructure to enhance future growth and increase recurring revenues.

Post period end, the Group returned to profitability and positive operating cashflows during the first five months of FY 2023, whilst also continuing to grow revenues.

A full update on our financial performance for FY 2022 and progress in the current year will be provided in the upcoming annual report.

Ends

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 among 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/

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