Newmark Security (NWT) H1 24/25 earnings summary

Executive summary

• Interim results show a first-half loss, expected due to second-half weighting and strategic investments, with positive full-year EBITDA anticipated.

• Revenue for H1 FY25 was £10.2 million, down 1% year-on-year due to project phasing in Physical Security Solutions.

• Focus remains on accelerating growth through HCM partnerships, recurring revenues, and innovation in device and data management.

• Strategic partnerships with Oracle, Workday, and SAP are expected to drive significant future revenue.

• EBITDA declined to £0.5 million from £0.8 million, reflecting increased investment aligned with a new five-year strategic plan.

Financial highlights

• Group revenue for the half year was £10.2 million, slightly down from £10.4 million year-on-year, reflecting normal H2 cyclicality.

• Annual recurring revenue (ARR) reached £3 million in October 2024, up 30% year-on-year.

• Gross profit was £3.9 million, flat year-on-year, with gross margin up 0.9 percentage points to 38.1%.

• EBITDA decreased by £0.3 million to £0.5 million due to a 10% rise in overheads from inflation and strategic investments.

• Loss after tax was £0.4 million, with a loss per share of 4.60 pence.

Outlook and guidance

• Management expects a strong second half, with sales pipelines at record levels and full-year performance anticipated to surpass the prior year.

• Margin improvement is forecasted, driven by recurring HCM revenues and ongoing strategic initiatives.

• Profitability improving each quarter, trend expected to continue into Q4 FY25.

• Positive cash position and supportive banking relationships underpin confidence in future growth.

• Safetell on course for improved H2 performance.