15th Oct 2021 12:23
(Alliance News) - Newmark Security PLC on Friday said trading in the first half has "not been immune" to recent supply chain challenges, as it unveiled its plans for capital reorganisation.
The London-based electronic and physical security systems company said it has weathered the increased freight costs and shipping time frames impacting many industries at the moment, as well as increased component costs and reduced availability.
Newmark shares were trading 8.7% lower at 0.87 pence in London on Friday.
As a result, Newmark said it sought to bolster stock levels to "build in a buffer to ensure that the global supply chain issues do not impact the group's ability to fulfil existing and anticipated client orders".
It added that the increased working outlay, coupled with increased freight and component costs, negatively impacted gross margins and cash flows for the first four months of the current financial year, which ends on April 30.
However, Newmark instigated initiatives in the four month period to improve profitability and now has confidence it is "well positioned" to navigate the market conditions for the rest of the year.
Also on Friday, Newmark reported reorganisation of its share capital to improve liquidity and trading volumes. It believes the reorganisation will improve investor perception of the company and marketability of its shares.
The security firm is currently restricted from fundraising due to its shares trading below their nominal value on AIM.
The reorganisation will sub-divide Newmark's existing shares into two classes, including intermediate shares with a nominal value of 0.1 pence each and deferred shares with a nominal value of 0.9 pence each.
Once the sub-division is completed, it will consolidate every 50 intermediate shares into one new ordinary share.
By Josie O'Brien; [email protected]
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