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Newmark Security switches to counter-terror rather than counters

Snapshot

The business is back to its two core businesses of clock-in equipment and security

picture of terminal

Quick facts: Newmark Security PLC

Price: 1.45 GBX

AIM:NWT
Market: AIM
Market Cap: £6.8 m
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The switch to online and mobile banking has caused ripples in some unlikely places.

AIM-listed Newmark Security PLC (LON:NWT) has been one of those caught in the fall-out.

For around thirty years one of its stalwarts has been security barriers and walls in bank branches.

Up until recently this was a very solid business, no pun intended.

But with bank branches shutting at record rates, over 700 are tipped to close in the UK this year, Newmark has been forced into a re-think.

Pared back to core businesses

Marie-Claire Dwek, chief executive, has taken the business back to its two core businesses of clock-in equipment and security, invested in new products and started the hunt for new markets.

"The focus is on areas of growth where we know we have expertise," she told Proactive, and Dwek believes that the now pared back Newmark is starting to recover.

Grosvenor, the subsidiary that makes smart access controls and work attendance terminals, has picked up a couple of sizeable contracts recently.

WorkForce Software, an established Grosvenor customer that sells equipment across the US, has ordered Linux software-based workforce management terminals.

That followed an order from an unnamed European group worth €3mln for a combination a Linux-based version of its GT-10 terminal and the recently upgraded Sateon building access product.

The GT-10 terminal was originally developed to run on Google’s Android operating software, but Newmark has now adapted it for other software systems and the customer wanted the Linux opensource option.

Workforce management is now a much more sophisticated product than just clocking in/off, Dwek adds

Staff training and work assignments, holiday booking and biometric fingerprint readers that stop an employee clocking in for an absent work-mate are all part of the new terminals.

Significant amounts of money have also gone into developing the Sateon Advance access control system, which provides smart access control from a keypad, phone, or mobile even.

Counter-terror rather than counter security 

Safetell, the physical security business, is also using Sateon as part of a switch away from the shrinking banking market and towards counter-terrorism.

If there is a terror threat, the aim is to reduce the number of casualties by restricting the access of an attacker in a building through installation of blast and bullet proof walls.

The change of strategy has not been without cost.

Last year’s results were dotted with impairment charges, redundancy costs and other one-offs.

Sales in the year to April dipped to 27% to £16mln, while the loss after one-offs was £5.2mln, though Dwek says there was a £3mln tidy up of legacy issues included within that.

And the recent orders show the benefits of the work are now starting to come through, Dwek adds.

“Some of the new products took longer than expected to develop but all are now launched and we are starting to see the fruits of that development and work.

"Once you sign a contract, it requires integration and development and it is after that it starts to scale up as the years go on.”

Supportive shareholders

Newmark still has cash in the bank and importantly a supportive group of shareholders who recognise businesses, especially small ones, have ups and downs.

This current twelve months is shaping to be ‘much better’ though there are no forecasts at this stage.

But Dwek believes Newmark is clearly on a recovery path and going forward the position is healthy.

At 1.02p, the company is valued at £4.5mln.

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