Newmark Security Regulatory News (NWT)

This announcement contains inside information for the purposes of Regulation 11 of the Market Abuse (amendment) (EU Exit) Regulations 2019/310.

Newmark Security plc

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

Year-end trading update

Continued revenue growth and a return to profitability

Newmark Security plc (AIM: NWT), a leading provider of electronic, software and physical security systems, today provides an update on trading for the year ended 30 April 2023 ("FY23"), reaffirming the Company's return to profitability.

Highlights

· FY23 year-on-year revenue growth, driven by a strong performance in the People, Data Management, and Physical Security divisions.

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

· Human Capital Management ("HCM") annualised recurring revenues* ("ARR") increased by 133% year-on-year to £2.1 million for April 2023, positively contributing to profit margins.

· Confirmation of a return to profitability and cash flow generation in FY23.

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

*ARR is calculated by annualising revenue recognised in a given month from all clients on deployed HCM subscription contracts.

Operations

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

Ongoing product development in cloud-based SaaS solutions and enhanced software applications on Time Clocks and now Bring Your Own Device ("BYOD") tablet devices has extended the reach of the Group's solutions in HCM and, therefore, the overall share of wallet. Following the increasing momentum in public and private sector spaces, Access Control has performed well year-on-year.

Compliance with data remains a strong underpinning core value, and the business continues to leverage this in winning new HCM SaaS recurring revenue business in both the North American and European markets. This has resulted in a 133% increase in the HCM ARR to £2.1 million for April 2023 (April 2022: £0.9 million).

During the period, Grosvenor's US headquarters were relocated to a much larger facility in Florida, and third-party logistics were bought in-house, further improving the ability to serve customers.

Physical Security Solutions division - Safetell

The organisational changes have been successfully implemented within Safetell following the restructuring of sales and marketing in 2022. This restructuring has helped Safetell deliver FY23 revenue growth, primarily from retail screens, entrance control installations and automatic door services.

During the year, Safetell developed a redesigned, cost-effective retail attack-resistant screen for convenience stores, and this has been subject to strong demand, having rolled out over £1 million of installations for major UK retailers and built a pipeline of over £2 million for installations for FY24.

Safetell has continued to increase its market share in the Entrance Control market with successful installations direct to end users and within the enlarged construction sector, including newbuild and refurbishment. The Group's market share has continued to grow in Automatic Doors Services, with new national service contracts increasing recurring revenues.

Financial Position

The Group's cash at 30 April 2023 was £0.6 million (30 April 2022 cash: £0.2 million). This increase was due to a significant improvement in operation cashflows driven by higher revenues, increased gross margin percentage and lower overheads.

Supply chain challenges have been successfully managed by building inventory to satisfy ongoing customer demand. The inventory levels are expected to ease in FY24, allowing for further cash flow generation.

In January 2023, the Group's UK invoice financing facility was increased by £0.5 million to £2.3 million to provide further working capital headroom as the Group continues to grow.

Maurice Dwek, Chairman of Newmark, commented:

"We are pleased to report that the business has returned to full-year profitability. This is the result of the hard work that commenced in the previous financial year, which has seen us optimise our operations, put through necessary price increases to mitigate the inflationary environment and enhance our product offering to meet the needs of our customers. Overall, Newmark is a much stronger business with a platform to drive future growth.

"Looking ahead, the business has made a good start to FY24 with its new revenue pipeline. Whilst the Board cautiously observes current macro events, it remains confident in Newmark's product and service offering. The Company looks forward to updating the market on further commercial progress in due course."

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: www.newmarksecurity.com