Newmark Security PLC (LON:NWT) maintained its dividend for the year despite a slower than anticipated sales pipeline.
In its final results for the year ended April, the security systems provider maintained its dividend for the year at 0.10p, but said that despite the continued growth of the opportunity pipeline, conversion into sales has been slower than hoped.
The EU referendum earlier in the year potentially resulted in delays in spending by certain customers, said the group. Although the full impact of Brexit on the group was too early to forecast, the benefit to exports should outweigh additional material cost of imports.
It reported revenues of £21.8mln compared to £22.85mln last year, a 4.5% decrease, but in line with expectations following the completion of some major customer programmes.
Revenue in the electronic division was up 0.8% from £7.58mln to £7.64mln, whilst the asset protection division revenue was down 7.2% in the year from £15.3mln to £14.2mln.
“Revenue from the Asset Protection Division was lower for the year under review due to lower volumes of some major customer programmes,” said chairman Maurice Dwek.
Group operating profits were also affected by new market and product developments, including the costs of opening the new office in Hong Kong, said Dwek.
Pre-tax profit stood at £1.2mln for the year, almost half the £2.25mln reported last year.
It ended the year with £4.3mln in cash, compared to £4.2mln last year.
“The group retains a significant cash position and the board remains optimistic about trading in future years and has therefore maintained the proposed dividend for the year at the same level as last year.”
Analysts at Cantor Fitzgerald reiterated its Hold recommendation and target price of 1.8p, reflecting the lack of immediate visibility.
The broker said given the dependence on a high number of new product launches over the coming months, investors need to see positive sales momentum established.
Shares were up 12.5% to 1.94p.
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