Newmark Security PLC (LON:NWT) said the second half of its financial year has broadly continued on the lines of the first half.
Revenues in the year to 30 April are expected to be not less than £22.0mln, down from £22.9mln the year before, while profit after tax should be in line with market expectations at around £1.2mln.
The provider of electronic and physical security systems said its strategy in the Middle East is proving successful, as evidenced in part by the recent signing of Abu Dhabi National Oil Company as a client. Beyond the Middle East, its electronic security arm, Grosvenor Technology, has also achieved a number of new client wins, including the Bank of Tokyo-Mitsubishi UFG and the Royal Albert Hall in London.
The group continues to invest in upgrading its technology and in its trading update it highlighted three major product developments from Grosvenor, including a combined hardware and software access control range, in addition to a completely new Workforce Management terminal built on the burgeoning Android platform.
Grosvenor has also announced an opportunity for existing customers to upgrade from Grosvenor's JANUS-based access control system, which is no longer supported by Microsoft, to its Sateon platform.
The Sateon platform's new advanced range will provide customers with a seamless access control solution, Newmark said.
Customer benefits include easier installation, enhanced reliability, lower cost per door and future proofing, while Grosvenor installers will benefit from quicker installation times.
Grosvenor expects to launch the new product during the summer of 2016.
As for the new Workforce Management terminal, it spells bad news for those who like to “swing the lead”, as it will incorporate a biometric fingerprint reader to prevent employees signing in on behalf of workmates.
The new product range will facilitate quicker and easier integration with other applications, requiring less development time and cost, which the board of directors believe will consolidate Grosvenor's position as a leading hardware provider for software partners. Grosvenor hopes to increase both market share and growth into adjacent new markets such as aviation, which require robust, trustworthy kiosk terminals.
“These new offerings are part of our on-going drive to create an excellent product pipeline that will deliver for customers for years to come,” said Marie-Claire Dwek, chief executive officer of Newmark.
“As anticipated in January, our products are gaining traction in the Middle East and we are delighted to announce several new client wins in this expansive region where the market never stands still, and demands products that respond to new requirements as they arise. We look forward to delivering products that offer benefits for end users and new opportunities for intermediaries in our supply chain,” she added.
House broker Cantor Fitzgerald said it was an “in line” trading update.
Profits for the current year are set to be lower year-on-year, the broker noted, due to the completion of some major customer orders and the decision to make significant investments in new products, markets and systems to drive future growth.
“The successful execution of the strategy remains the key catalyst for out-performance,” the broker said, as it reiterated its 'buy' recommendation and target price of 4.5p.
“Whilst Newmark benefits from long-term relationships with many blue-chip customers – including the world's second largest retailer and the UK's largest supermarket chain – much of the group's work is project-based and revenues are influenced by the phasing of customers' investment plans,” said Cantor's Richard Hickinbotham.
Shares rose 4.1% in a falling market to 2.94p on the update.