Newmark Security PLC (AIM:NWT) reported first-half underlying revenue and gross profit growth and said it is on track for a stronger second half.
Revenues of £10.4 million were generated in the six months ended 31 October 2023, down 2% year on year, which mostly reflected the People & Data Management (P&DM) division, Grosvenor Technology, losing its partner UKG after its merger the previous year.
Underlying earnings (EBITDA) came to £0.8 million, compared to £1.1 million a year earlier, and a loss after tax of £0.1 million was reported versus £0.5 million pre-tax profit last time.
Grosvenor’s sales were down 9% to £7.6 million, but this was partly offset by strong growth in the Physical Security Solutions division, Safetell, where sales grew 24%.
If stripping out the UKG impact, underlying group revenue grew 11% and underlying gross profit increased by £0.2 million.
Newmark said the group returned to profit after tax in the second quarter of the financial year.
The strong trading trend is expected to continue into the second half of the financial year, with both electronic and physical security systems divisions to grow in the full year.
“The group's existing financing facilities are sufficient to execute its current plans and both divisions are anticipating stronger sales in the second half, supported by a good spread of public and private sector contracts,” the company said.
Chairman Maurice Dwek said it was a successful period for Newmark as both divisions continued to execute their strategies and build a better platform for growth, as shown by 77% growth in subscription-based recurring revenues for Grosvenor’s Human Capital Management arm and Safetell’s 100% sales growth of entrance control products.
Dwek also pointed to the number of blue-chip clients being won across public and private sectors, including a ‘big four’ supermarket, a major UK utility and multiple police forces.
“Our sales pipeline is expanding and we are on track for stronger second half, with both divisions set to deliver full year revenue growth,” he said.
"Whilst we are watchful of the macroeconomic outlook and pending elections, the people and data security market continues to grow and we are confident that the group is in a stronger position to capitalise on the opportunities this will bring.”