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Newmark Security (LON:NWT) revealed it performed strongly in the 12 months just gone – but cautioned its profits in the current year will be lower as it invests in new products and markets.
Figures for the period to April 30 revealed turnover grew by more than 19% to £22.9mln, while pre-tax profit advanced to £2.25mln from £906,000 previously.
As forecast in the interim results, the second-half performance from Newmark, which specialises in electronic and physical security, was slightly more sluggish than that seen in the first six months.
This, it said, was primarily the result of the timing of “customer projects and roll out programmes”.
Its net cash position more than tripled to £3.95mln, while the dividend is being hiked by a third to 0.1p a share.
“The board remains optimistic about the future with various opportunities in the pipeline and accordingly has increased the proposed dividend for the year by one third," said chairman Maurice Dwek.
Newmark splits neatly into two businesses: the electronic unit operates as Grosvenor Technology and provides electronic security, access control systems and workforce management tools.
The other arm is Safetell, which supplies the cash handling equipment and fast rising screens you see in banks and the post office.
Not that this is all it does; it also offers a nationwide service division, supporting customers 24 hours a day.
For a small company, the group has some instantly recognisable High Street names as customers. The Post Office and Santander are clients, as are H&M and BP.
Chief executive Marie-Claire Dwek said she was “delighted” with the financial, which benefited from a mix of renewals and new contracts.
She said the plan over the next year is to grow geographically and via the roll-out of a mid-market version of SATEON, its browser-based access control system.
“Because some of projects have long gestation periods that’s why we are anticipating next year will be slightly lower, but we will see the return of this in the following year,” Dwek told Proactive Investors.
The shares fell 29% in the aftermath of the results – though it must be remembered they are up 120% in the year to date.
Broker Cantor Fitzgerald expects profits to decline by around 40% this year as the investment is made before recovering to the levels seen in the last 12 months.
It points out that even adjusting for this, the stock continues to trade at a substantial discount to its peer group. That said, its price target is currently under review.