Newmark Security PLC (AIM:NWT) said it expects profitability to improve with each quarter and anticipates this trend will continue into the final months of its financial year.
The company, which provides security systems and services, said it remains on track to grow revenue for the full year, with a strong sales pipeline supporting this outlook.
Chairman Maurice Dwek said the company delivered a “positive first half” as it focused on increasing recurring revenue and enhancing its service offerings.
He noted that while higher investment had led to lower reported earnings before interest, tax, depreciation, and amortisation (EBITDA), stronger profit margins and subscription-based revenue had helped strengthen cash flow and the company’s balance sheet.
Revenue for the six months to October 31 was £10.2 million, slightly lower than the £10.4 million reported for the same period a year earlier.
Gross profit remained steady at £3.9 million, with margins rising to 38.1%. However, the company posted a £0.4 million loss after tax, compared to a £0.1 million loss the previous year.
Newmark’s Grosvenor Technology division saw recurring revenue from its workforce management services grow 30% year-on-year, reaching £3 million.
Revenue from these services grew 8%, with North American sales rising 16%. Meanwhile, its Safetell division, which provides security doors and screens, increased service and maintenance revenue by 38% and extended contracts with major banking and retail clients.
The company said it had a strong pipeline of new contracts and expects its North American and global business to contribute to full-year revenue growth.