We should have done much better says Synectics as it reports a £2.6m loss

WARWICKSHIRE-based security and surveillance technology group Synectics has reported a loss before tax of £2.6m.

In its interim results for the six months ended May 31, the Studley group revealed revenue was also down at £31.8m (2013: £40.7m).

The £2.6m loss figure compares to a profit of £3.3m in the corresponding period in 2013.

The firm has also disclosed a net debt of £5.1m compared to having net cash of £4.7m on May 31 last year.

On a more positive note it still has a strong order book:  £32.9m compared to £34.8m at the end of May last year.

In his chairman’s statement, David Coghlan said the profit shortfall is a result, inter alia, of the timing of orders on large new contracts, disruption from consolidating two operations into a single much bigger factory, and a combination of “unfortunate external events and inadequate internal management” on a major UK integration project. 

“The fact remains, we could and should have done much better,” he said.

John Shepherd, chief executive, said: “Though trading in the first half of this year has been worse than expected, none of the fundamental factors which will drive profitable growth have changed. 

“We continue to focus on delivering advanced proprietary integrated command and control systems to the most demanding global customers and invest in the intellectual property necessary to keep us ahead of the competition.”

“The detailed reasons for the shortfall against expectations are set out in the chairman’s Statement and I firmly believe that those factors which are within our control have been properly addressed and will not recur.
 
“We have undertaken a thorough review of all projects to ensure there are no further material loss-making contracts and, now integration of the systems division has been completed, there will be no more disruption to operations.
 
“We have not allowed these setbacks to slow progress against our strategic objectives, especially the launch of our integrated command and control software platform – Synergy 3, which is gaining significant interest in the market. 

“We have seen strong growth in the Group’s consolidated order book and qualified pipeline and are therefore well positioned to maximise the opportunities we can see in our chosen niche markets especially in the Middle and Far East.
 
“I expect a strong performance in the second half of this year and for that momentum to continue into 2015 and beyond.”