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

Newmark Security plc (AIM: NWT), a leading provider of products and services in the security and data sectors announces an update on trading for the year ended 30 April 2021 ("FY 20/21").

Trading for the second half of FY 20/21 continued broadly in line with management's expectations, with the Company showing an improved performance in H2 as compared to H1. As a result, subject to audit, the Company expects to report revenue for FY 20/21 of c. £17.7m, 6% lower than FY 19/20 (£18.8m), and a marginal profit for the full year. This reduction in full year revenue is significantly lower than what was achieved at the half year (23% reduction in revenue compared to H1 19/20), demonstrating the improved trading in H2.

During the year, Grosvenor Technology ("Grosvenor"), which specialises in data security and privacy, achieved further growth in its Human Capital Management ("HCM") activities. Increases in sales from existing and new HCM customers outstripped the expected reduction from the merger of Ultimate Software with Kronos Incorporated as anticipated, resulting in year-on-year growth of 6%. Grosvenor's Access Control division was impacted to a greater degree by COVID-19 with less ability for our installer network to attend sites during lockdown, although the second half of the year showed improvement over the first half as expected and with Janus C4 continuing to build traction.

Safetell, the Group's asset protection division, managed to recover revenues well in the second half of the year resulting in a full year c. 7% reduction against last year compared to a 24% reduction reported at the half year, whilst still maintaining a strong sales pipeline.

Outlook

With the expectation that the COVID-19 pandemic will continue to become more controlled with the successful roll out of vaccinations, the Directors of Newmark are optimistic about future trading. HCM is expected to continue growing from the continued onboarding of Software Houses and the further roll out of its Software-as-a-Service ("SaaS") and Clock-as-a-Service ("ClaaS") subscription services. Further focus is being placed on the transition from Legacy Access Control sales to Janus C4 and in Safetell we anticipate steady growth from a more considered and targeted approach to the market.

The Board appreciates the amount of hard work from the Newmark team that has gone into delivering a set of good results considering the events of the past year.