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RNS Number : 1599P
Newmark Security PLC
15 October 2021
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the UK Market Abuse Regulation.
With the publication of this announcement, this information is now
considered to be in the public domain.
Newmark Security plc
("Newmark", the "Company" or the "Group")
Trading update, notice of AGM, capital reorganisation and
Investor Meet Company presentation
Newmark Security plc (AIM: NWT), a leading provider of
electronic and physical security systems, announces the following
trading update and notice of its annual general meeting and a
proposed capital reorganisation.
Trading update
As noted in the Group's final results for the year ended 30
April 2021 ("FY 2021 results"), the Company has maintained a key
focus on cash in light of the challenges faced in managing
inventory levels and dealing with the global shortage of components
needed to build products. The worsening supply chain issues facing
multiple sectors and businesses of all sizes have been well
documented in recent weeks and, unfortunately, Newmark has not been
immune to these challenges. These issues include material increases
in freight costs and shipping timeframes, as well as increasing
component costs and reduced availability.
The Company has sought to bolster levels of stock held in order
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, and to better withstand the risk of
future supply-chain disruption. This increased working capital
outlay, coupled with the significantly higher freight costs and
increased component costs, has negatively impacted gross margins
and cashflows in the first four months of the year ending 30 April
2022.
As a result of this, the Company has instigated a number of
initiatives to improve profitability and cashflows. These
initiatives, together with increasing demand from the United States
and an improvement in revenues and margins in September, provides
the Board with confidence that the Group is well positioned to
navigate these market conditions for the rest of the financial
year.
Notice of AGM
The Company will hold its Annual General Meeting ("AGM") on 10
November 2021 at Holmes Hotel, 83 Chiltern Street, London W1U 6NF.
The Company is keen to welcome shareholders in person to the AGM
this year unless the COVID-19 situation changes such that this
would no longer be possible. The Company requests that any
shareholders intending to attend the AGM in person register their
intention as soon as practicable by emailing
investorrelations@newmarksecurity.com. All shareholders are
encouraged to vote electronically or to lodge a form of proxy in
advance of the meeting. Full details can be found in the notice of
AGM.
Copies of the Company's Annual Report for the year ended 30
April 2021, which includes notice of the AGM, will be posted to
shareholders today and made available on the Company's website
https://newmarksecurity.com/
Investor Meet presentation
For shareholders that are unable to attend the AGM, the Company
will host a presentation through the digital platform, Investor
Meet Company at 2:00 p.m. on 8 November 2021. Investors can sign up
to Investor Meet Company for free and add to meet Newmark Security
via:
https://www.investormeetcompany.com/newmark-security-plc/register-investor
Capital Reorganisation
As part of the business of the AGM, the Company is proposing a
reorganisation of its share capital ("Capital Reorganisation")
which will involve a sub-division and subsequent consolidation of
the Company's share capital. The Board believes that the Capital
Reorganisation could:
-- improve the liquidity of the Company's shares and increase trading volumes;
-- improve investor perception of the Company; and
-- improve marketability of the Company's shares.
In addition, the Company's shares are currently trading on AIM
at a price which is below their nominal value of one pence per
share. The issue of new shares by a company incorporated in England
and Wales at a price below their nominal value is prohibited by the
Companies Act 2006 and, accordingly, without undertaking the
Capital Reorganisation, the ability of the Company to undertake
fundraisings in future is restricted.
The Capital Reorganisation will require some amendments to be
made to the Company's Articles of Association. Resolutions will be
put to shareholders at the AGM for the purposes of approving the
Capital Reorganisation, including approving amendments to the
Company's Articles of Association.
Details of the Capital Reorganisation
The Capital Reorganisation will involve:
-- a sub-division of the existing ordinary shares of one pence
each in the capital of the Company ("Existing Ordinary Shares")
that will create two classes of shares, intermediate ordinary
shares with a nominal value of 0.1 pence ("Intermediate Ordinary
Shares") and deferred shares with a nominal value of 0.9 pence
("Deferred Shares"); and
-- following completion of the Sub-division, the consolidation
of every 50 intermediate Ordinary Shares into one new ordinary
share of 5 pence each ("New Ordinary Share").
Subject to the passing of the relevant resolutions at the AGM,
the Capital Reorganisation will take effect at the close of
business on the date of the AGM ("Record Date").
The proportion of the issued ordinary share capital of the
Company held by each shareholder immediately before and after the
Capital Reorganisation will remain, save for fractional
entitlements, unchanged.
New share issue
To effect the Capital Reorganisation, it will be necessary to
issue such minimum number of additional Existing Ordinary Shares so
that the aggregate nominal value of the ordinary share capital of
the Company is exactly divisible by 50. It is therefore expected
that 34 Existing Ordinary Shares will be issued at nominal value to
the Company Secretary prior to the date of the AGM.
Fractions
No shareholder will be entitled to a fraction of a New Ordinary
Share and where, as a result of the Consolidation, any shareholder
would otherwise be entitled to a fraction of a New Ordinary Share
in respect of their holding of Existing Ordinary Shares at the
Record Date (a "Fractional Shareholder"), such fractions will be
aggregated with the fractions of New Ordinary Shares to which other
Fractional Shareholders may be entitled so as to form full New
Ordinary Shares and sold in the market. The costs, including the
associated professional fees and expenses, that would be incurred
in distributing such proceeds are likely to exceed the total net
proceeds distributable to such Fractional Shareholders. The Board
is therefore of the view that, as a result of the disproportionate
costs in such circumstances, it would not be in the Company's best
interests to distribute such proceeds of sale and the proceeds will
instead be retained for the benefit of the Company or donated to
charity.
The provisions set out above mean that any such Fractional
Shareholders will not have a resultant proportionate shareholding
of New Ordinary Shares exactly equal to their proportionate holding
of Existing Ordinary Shares. Shareholders with only a fractional
entitlement to a New Ordinary Share (i.e. those shareholders
holding a total of fewer than 50 Existing Ordinary Shares at the
Record Date) will cease to be a shareholder of the Company.
Accordingly, shareholders currently holding fewer than 50
Existing Ordinary Shares who wish to remain a shareholder following
the Consolidation would need to increase their shareholding to at
least 50 Existing Ordinary Shares prior to the Record Date.
Shareholders in this position are encouraged to obtain independent
financial advice as appropriate before taking any action.
Shareholders with holdings of Existing Ordinary Shares in both
certificated and uncertificated form will be treated as having
separate holdings for the purpose of calculating their entitlement
to New Ordinary Shares.
Shareholder approval
Shareholder approval is needed in order to effect the Capital
Reorganisation. The resolutions to approve the steps of the Capital
Reorganisation must each be passed by an ordinary resolution of
shareholders in order for the Capital Reorganisation to become
effective.
Admission of, and dealings in, the New Ordinary Shares
Application will be made for the New Ordinary Shares to be
admitted to trading on AIM and, assuming that the relevant
resolutions are passed by shareholders at the AGM, dealings in the
Existing Ordinary Shares are expected to cease at the close of
business on 10 November 2021 and dealings in the New Ordinary
Shares are expected to commence at 8:00 a.m. on 11 November
2021.
ISIN and SEDOL codes
The New Ordinary Shares will have a new ISIN and SEDOL, which
will become effective from Admission. The ISIN code for the New
Ordinary Shares will be GB00BNYM9W73 and the SEDOL code for the New
Ordinary Shares will be BNYM9W7.
Issued share capital
Immediately following the Capital Reorganisation, the issued
share capital of the Company is expected to be 9,374,647 New
Ordinary Shares and 468,732,350 Deferred Shares.
Rights of the New Ordinary Shares and the Deferred Shares
Other than a change in nominal value, the New Ordinary Shares
will have the same rights and be subject to the same restrictions
as the Existing Ordinary Shares from which they will be derived,
including voting, dividend and other rights. Following the Capital
Reduction each shareholder will hold 50 New Ordinary Shares for
every one Existing Ordinary Share held immediately before the
Capital Reorganisation.
The Directors consider that the Deferred Shares will have no
effect on the respective economic interests of shareholders.
The Deferred Shares will have no income or voting rights. The
only right attaching to a Deferred Share will be to receive the
amount paid up on that Deferred Share (i.e. 0.9 pence) on a
winding-up of the Company or other return of capital once the
holders of New Ordinary Shares have received the amount of
GBP100,000,000 per New Ordinary Share. The Deferred Shares will
effectively be valueless.
The Deferred Shares will not be admitted to trading on AIM and
will be non-transferable.
The Deferred Shares shall have the rights and be subject to the
restrictions set out in the Company's Articles of Association as
amended pursuant to resolution 8 in the Notice of Annual General
Meeting.
Share certificates
If you hold a share certificate in respect of your Existing
Ordinary Shares, your certificate will no longer be valid from the
time the proposed Capital Reorganisation becomes effective and will
be cancelled. If you hold more than 50 Existing Ordinary Shares on
the Record Date you will be sent a new share certificate evidencing
the New Ordinary Shares to which you are entitled following the
Capital Reorganisation. Such certificates are expected to be
despatched by no later than 24 November 2021. Upon receipt of the
new certificate, shareholders should destroy any old certificates.
Pending the despatch of the new certificates, transfers of
certificated New Ordinary Shares will be certified against the
Company's share register.
No share certificates will be issued in respect of the Deferred
Shares.
Uncertificated shares
If you hold your Existing Ordinary Shares in uncertificated
form, you should expect to have your CREST account credited with
the New Ordinary Shares to which you are entitled on implementation
of the Capital Reorganisation on 11 November 2021 or as soon as
practicable after the Capital Reorganisation becomes effective.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2021
AGM 10.00 a.m. on 10 November
Latest time and date for dealings 4.30 p.m. on 10 November
in Existing Ordinary Shares
Record Date 5.30 p.m. on 10 November
Admission effective and commencement 8.00 a.m. on 11 November
of dealings on AIM in the New Ordinary
Shares
CREST accounts credited with New Ordinary 11 November
Shares (where applicable)
Despatch of definitive certificates By 24 November
for New Ordinary Shares (where applicable)
STATISTICS RELATING TO THE CAPITAL REORGANISATION
Existing Ordinary Shares in issue at
the date of this announcement 468,732,316
Conversion ratio of Existing Ordinary One New Ordinary Share
Shares to New Ordinary Shares for every 50 Existing
Ordinary Shares
Total expected number of New Ordinary
Shares in issue following the Consolidation 9,374,647
ISIN for the New Ordinary Shares GB00BNYM9W73
SEDOL for the New Ordinary Shares BNYM9W7
Enquiries:
Newmark Security plc
Marie-Claire Dwek, Chief Executive Tel: +44 (0) 20 7355
Officer 0070
Paul Campbell-White, Chief www.newmarksecurity.com
Financial Officer
Allenby Capital Limited Tel: +44 (0) 20 3328
(Nominated Adviser and Broker) 5656
James Reeve / Liz Kirchner
(Corporate Finance)
Amrit Nahal (Sales & Broking)
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