Fall in profits and revenue but ‘healthy order book’ for listed surveillance tech firm

Surveillance technology business Synectics has recorded a £1.1m fall in revenue in its interim results for the six months ending on 31 May 2019.

The firm reported revenues of £33.6m, down from £34.7 last year. And the company, which has a major systems division base in Sheffield, confirmed a £300,000 drop in profit before tax – to £1.2m from £1.5m in 2018.

But the business also said its order book stood at £28.2m, a like-for-like increase of 23% since the year end (£21m). And it added a stronger performance was expected in the second half.

Commenting on the results today, Paul Webb, Chief Executive of Synectics, said the interim figures were not unexpected.

He said: “With full year results expected to be in line with market expectations, Synectics is in a strong position to capitalise on a number of exciting high profile projects and harness strategic growth opportunities aligned with the development of next-generation product capabilities.”

Webb added the business was accelerating its Research and Development spending in Sheffield, where it currently employs at least 70 people, and was actively looking to recruit product specialists and software developers.

“A significant part of our business is overseas – Asia and the US are very strong centres for us – and the market for our gaming surveillance systems has been very strong for the last few years,” he said.

“We don’t just come up with a product and hope someone will buy it, we’re proud of our customer-led product development. It’s an exciting but scary time for us but our order book in is good shape which gives us confidence that the demand is there for our next generation of solutions.”

In his own statement, Chairman David Coghlan said: “At the Annual General Meeting on 25 April last, I reported that the Group’s UK trading had begun to experience a pattern of order deferrals and customer-led delays in the progress of existing contracts that was likely to lead to profits being substantially more weighted to the second half of the current year than was initially anticipated.

“This apparent uncertainty among Synectics’ private and particularly public sector customers in the UK continued in the remainder of the first half, though the impact was partly offset by positive developments elsewhere.

“Synectics continued to enjoy strong revenues and profit contribution from global Gaming surveillance systems, notably a large order in the half year from a substantial new customer in Macau.

“There was also a pick-up in business in High Security prisons as well as in the pipeline of expected orders for important high security sites and infrastructure in the UK and continental Europe.

“Most significantly, Synectics’ success in recently securing preferred bidder status for a major European transport infrastructure project provides further validation of the Group’s progress towards its market objectives.

“The Group’s competitive position in these areas continues to benefit both from its focus on sophisticated high-end customers with increasingly specialised security and surveillance needs and from investment committed to enhancing Synectics’ core technology.”