Interim Results

Newmark Security PLC
25 January 2005



                              NEWMARK SECURITY PLC

                                 INTERIM REPORT
                    for the six months ended 31 October 2004

CHAIRMAN'S STATEMENT

RESULTS FOR THE SIX MONTHS ENDED 31 OCTOBER 2004

The Group made an operating profit of £465,000 before amortisation of goodwill
and interest for the six months ended 31 October 2004 (2003: £132,000 continuing
operations).

The results for the period include Custom Micro Products Limited (''CMP'') for
the four months since acquisition. CMP was acquired for a total consideration of
up to £2.885 million with an initial cash consideration of £800,000 paid on
completion. There are two tranches of deferred consideration of £1.4 million and
£685,000 respectively, the latter payable on the achievement of profits before
tax of £600,000 for the year ending 30 April 2005. In order to part fund the
acquisition of CMP, the Group raised an additional £1,700,000 (before expenses)
through a placing of 136,000,000 ordinary shares at 1.25p per share.

ELECTRONIC DIVISION

Turnover 6 months 31 October 2004: £2,998,000 (2003: £2,071,000).
Operating profit 6 months 31 October 2004: £585,000 (2003: £443,000).

The combined access control operation comprising of Grosvenor and Newmark
Technology was ahead of plan for the period and is expected to remain so for the
remainder of the year.

With the release in January 2005 of the new eSeries JANUS controllers working in
conjunction with JANUS 3.1 software, Grosvenor is leading the way and is set to
take full advantage of the emerging IP revolution within the security industry.
TCP/IP networks are in every organisation and the new JANUS hardware sits
directly onto these networks without any other wiring being required to enable
the controllers to 'talk' to the JANUS Main PC/server. The cost savings are
significant for the end user.

With the addition of CMP into the Group, we have integrated their Time &
Attendance system into JANUS. Grosvenor will now be selling the CMP hardware and
software re-badged as a Grosvenor/JANUS product called ViewPoint.

We have sourced and completed a move of our core hardware production to Hungary
where substantial cost savings can be made. The new eSeries controllers are
amongst the first boards to be manufactured in this way and have proved
successful from the start.

Potential business for the coming period looks very encouraging for all of these
products with large corporates showing a great interest in the new system. The
underlying business trend remains very strong with a continuing volume of steady
core business.

Other contracts being sought and due to be placed include a major bank looking
to upgrade its entire security infrastructure, defence companies and government
facilities so a significant overall increase in revenue is expected in the next
financial year.

CMP's revenue comprises two major elements with approximately two thirds as a
result of many small orders received from dealers with the balance from large
one-off orders typically from distributors and end users in the UK. Since
acquisition, regular dealer revenue has been broadly in line with expectations
and several new dealers have been recruited which should increase the volume of
product sold through this channel in the near future. There has been significant
activity as far as potential large orders are concerned particularly in the
retail, hospital and construction sectors. However, none were completed in the
period and, as a consequence, turnover was lower than projected. These potential
contracts have not been lost and the current expectation is that they will now
occur in the financial year 2005/06.


SECURE LOCKING DIVISION

Turnover 6 months 31 October 2004: £748,000 (2003: £533,000).
Operating loss 6 months 31 October 2004: £214,000 (2003: £280,000).

Over the past six months, NSP Europe has made significant headway with certain
key distributors in the industry. At the beginning of 2005, NSP Europe has also
received initial orders for contracts established towards the end of 2004.
Since the launch of NSP Europe's standalone locking system, hotels and several
large groups have acquired and distributed the system throughout Europe. The
company also received a rolling contract to install and commission the European
Parliament in Brussels, with the initial stage to begin at the end of January.
The SIL range continues to attract demand from organisations with large
projects, which entails continuous specified work, and thus a somewhat lengthy
turnaround time. However, profits margins are good.

NSP Europe's Paris based division continues to expand, having made a successful
entry into the market, developing close ties with several distributors.

ASSET PROTECTION

Turnover 6 months 31 October 2004: £2,883,000 (2003: £2,346,000).
Operating profit 6 months 31 October 2004: £429,000 (2003: £382,000).

Safetell's sales have been in line with plan and represented revenue growth of
23% over last year's corresponding period. A change in product mix had an
adverse effect on gross margin percentage but gross profit overall was increased
by 5.6%. Overheads were contained within 2.1% of the previous year resulting in
a rise in operating profit of 11.7% compared to last year.

The Eclipse rising screen programmes were maintained with long-term customers in
retail finance and petrol retailing. A contract to replace counter fronts for
Abbey was largely complete by the target date of 30 September. A further order
for full height glass hampers for HBOS was awarded in October and this will be
completed in January 2005.

In the area of moving glass screens, CounterShield has found acceptance with a
number of Police forces but actual sales progress remains slow. There have been
a number of new customers for the Eye2Eye product but quantities remain small.
However the prospects for this product remain good and the value of outstanding
quotations is encouraging.

The development of a modular, bullet resistant glazing system to complement the
two anti-physical attack systems has increased market opportunities and fixed
glazing sales were 72% ahead of last year.

Safetell was awarded the new, 3-year Post Office contract for four sizes of Cash
Handling Units. Demand is dependent on Government funding for Post Office
re-organisation but a single order for approximately £400,000 was received in
December for delivery from March. The development of the new fully re-cycling,
teller cash dispenser is taking longer than expected and significant sales will
not start until financial year 2005/06.

The service and maintenance business increases pro-rata to the installed base of
primary equipments. The contract to maintain all locks for security doors for
HBOS is proving to be successful and the demand is higher than predicted
increasing the annual contract value by approximately 40%.

The outlook for the second half is encouraging . The level of enquiries and
outstanding quotations is promising and offers good prospects for next year.

SUMMARY

The Group results for the first six months have been very rewarding and reflect
the changes made in the Group structure and activities in previous years. We
believe that the outlook for the remainder of the year is very encouraging.

Maurice Dwek
Chairman
25 January 2005

                    CONSOLIDATED PROFIT AND LOSS ACCOUNT
                  for the six months ended 31 October 2004

               Notes    Unaudited   Unaudited   Unaudited   Audited  Unaudited
                              Six         Six         Six      Year        Six
                           months      months      months     ended     months
                            ended       ended       ended  30 April      ended
                               31          31          31      2004         31
                          October     October     October              October
                             2004        2004        2004     Total       2003
                           Before    Goodwill       Total     £'000      Total
                         goodwill       £'000       £'000                £'000
                            £'000
TURNOVER
Continuing
operations                 5,695           -       5,695     9,830       4,950
Acquisitions                 934           -         934         -           -
Discontinued
operations                     -           -           -       754         752

                           6,629           -       6,629    10,584       5,702

Cost of                   (4,044)          -      (4,044)   (6,479)     (3,511)
sales

Gross profit               2,585           -       2,585     4,105       2,191

Administrative
expenses                  (2,120)          -      (2,120)   (4,163)     (2,374)
Amortisation
of goodwill                    -        (185)       (185)     (298)       (151)
Termination
costs                          -           -           -      (167)          -
Administrative
expenses-total            (2,120)       (185)     (2,305)   (4,628)     (2,525)

OPERATING
PROFIT/(LOSS)

Continuing
operations                   338        (149)        189        58         (19)
Acquisitions                 127         (36)         91         -           -
Discontinued
operations                     -           -           -      (581)       (315)
                             465        (185)        280      (523)       (334)
Loss on
disposal of
subsidiary/business            -           -           -    (1,133)       (753)

PROFIT/(LOSS) ON 
ORDINARY ACTIVITIES
BEFORE INTEREST AND
TAXATION                     465        (185)        280    (1,656)     (1,087)

Interest
receivable                    14           -          14        15           3
Interest-discount 
charge on deferred
consideration               (130)          -        (130)     (179)        (89)
Interest payable             (36)          -         (36)      (51)         (9)

PROFIT/(LOSS) ON 
ORDINARY ACTIVITIES
BEFORE TAXATION              313        (185)        128    (1,871)     (1,182)

Tax on
ordinary
activities         2        (100)          -        (100)     (146)          -

PROFIT/(LOSS)
FOR THE YEAR
AFTER TAX                    213        (185)         28    (2,017)     (1,182)

Minority
interest                       -           -           -       (27)          -

                             213        (185)         28    (2,044)     (1,182)

                            Pence       Pence       Pence     Pence       Pence
Earnings/(loss) 
per share                    0.1p       (0.1p)         -     (1.0p)      (0.6p)
Earnings/(loss) 
per share before
amortisation of 
goodwill, losses 
of discontinued
operations, loss 
on disposal of
subsidiary/business 
and discount charge 
on deferred
consideration      6         0.1p           -        0.1p    (0.2p)       0.1p



                         CONSOLIDATED BALANCE SHEET
                            as at 31 October 2004

                                              Unaudited   Audited    Unaudited
                                                     31   30 April          31
                                                October                October
                                                   2004       2004        2003
                                      Notes       £'000      £'000       £'000
FIXED ASSETS
Intangible assets                                 6,969      5,287       5,434
Tangible assets                                   1,039        903         955
                                                  8,008      6,190       6,389

CURRENT ASSETS
Stocks                                            1,323        893         848
Debtors                                           2,722      1,974       2,228
Cash at bank and in hand                          2,659      1,522         930
                                                  6,704      4,389       4,006

CREDITORS: amounts falling due within
one year                                         (5,026)    (2,911)     (3,843)
NET CURRENT ASSETS                                1,678      1,478         163
TOTAL ASSETS LESS CURRENT LIABILITIES             9,686      7,668       6,552
CREDITORS: amounts falling due after
more than one year                               (6,031)    (5,741)     (3,868)
Provisions for liabilities and                     (201)      (201)       (209)
charges

NET ASSETS                                        3,454      1,726       2,475

CAPITAL AND RESERVES
Called up share capital                   3       3,834      2,131       6,978
Share premium                                         -          -       5,151
Merger reserve                                      801        801         801
Profit and loss reserve                   4      (1,478)    (1,506)    (10,788)

EQUITY SHAREHOLDERS' FUNDS                        3,157      1,426       2,142

Minority interest                         5         297        300         333

                                                  3,454      1,726       2,475



                    CONSOLIDATED CASH FLOW STATEMENT
                 for the six months ended 31 October 2004

                                             Unaudited     Audited   Unaudited
                                                   Six        Year         Six
                                                months       ended      months
                                                 ended    30 April       ended
                                                    31        2004          31
                                               October                 October
                                                  2004       £'000        2003
                                                 £'000                   £'000

NET CASH (OUTFLOW)/INFLOW FROM
OPERATING ACTIVITIES                              (149)        252        (218)
RETURNS ON INVESTMENT AND SERVICING OF
FINANCE
Interest received                                   14          15           3
Interest paid                                      (36)        (51)         (9)
NET CASH OUTFLOW FROM RETURNS ON
INVESTMENTS AND SERVICING OF FINANCE               (22)        (36)         (6)
TAXATION                                           (89)          -           -
CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENT
Purchase of tangible fixed assets                  (63)       (235)        (30)
Receipts from sale of tangible fixed
assets                                               -          30           -
NET CASH OUTFLOW FROM CAPITAL
EXPENDITURE AND FINANCIAL INVESTMENT               (63)       (205)        (30)
ACQUISITIONS
Purchase of subsidiary undertakings               (946)          -           -
Net cash acquired on purchase of
subsidiary undertakings                            563           -           -
NET CASH OUTFLOW ON ACQUISITIONS                  (383)          -           -
DISPOSALS
Costs related to sale of subsidiary
undertaking, and business and trading
assets                                               -        (189)          -
Cash disposed of with business                       -          (1)         (1)
NET CASH OUTFLOW FROM DISPOSALS                      -        (190)         (1)
NET CASH OUTFLOW BEFORE FINANCING                 (706)       (179)       (255)
FINANCING
New finance loans                                  150       1,100         625
Repayment of loans                                  (7)       (176)       (246)
                                                   143         924         379
Issue of shares                                  1,700           -           -
NET CASH INFLOW FROM FINANCING                   1,843         924         379
INCREASE IN CASH                                 1,137         745         124


NOTES TO THE ACCOUNTS

1.   BASIS OF ACCOUNTS
     The unaudited results for the six months ended 31 October 2004 have been
     prepared on a basis consistent with the accounting policies disclosed in 
     the Group's 2004 Report and Accounts, and do not constitute statutory 
     accounts within the meaning of Section 240 of the Companies Act 1985. The 
     results for the year ended 30 April 2004 are an abridged version of the 
     full accounts, which received an unqualified audit report and have been 
     filed with the Registrar of Companies.

2.   TAXATION
     The tax charge is disproportionate to the profit for the year due to the 
     effect on profits of items not deductible for tax purposes, and the use of 
     losses brought forward.

3.   SHARE CAPITAL
                                                                         £'000
At 1 May 2004                                                            2,131
Shares issued in the period                                              1,703
At 31 October 2004                                                       3,834

4.   RESERVES
                                     Profit and       Merger       Total other
                                   loss reserve      reserve           reserve
                                          £'000        £'000             £'000
At 1 May 2004                            (1,506)         801              (705)
Retained profit for the period               28            -                28
Exchange adjustment                           -            -                 -
As at 31 October 2004                    (1,478)         801               677

5.   MINORITY INTEREST
                                                                         £'000
At 1 May 2004                                                              300
Minority interests purchased back in period                                 (3)
At 31 October 2004                                                         297

6.   EARNINGS PER SHARE
                                                           Pence per     £'000
                                                               share
Profit after taxation and minority interest                      0.0p       28
Amortisation of goodwill and discount charge on
deferred consideration                                           0.1p      185
                                                                 0.1p      213

     The profit per share has been calculated based on the weighted average 
     number of shares in issue during the period, which was 303,750,433 shares 
     (2003: 212,305,266).

7.   DIVIDENDS
     No interim dividend is proposed (2003: Nil).

8.   A copy of the interim report has been sent to shareholders and is available
     for inspection at the Company's registered office, 57 Grosvenor Street, 
     London W1K 3JA, during normal office hours, Saturdays, Sundays and bank 
     holidays excepted, for 14 days from today.




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