Quatnetics keeps a close watch on growth

CCTV specialist Quadnetics said today that it had coped with recession well as new core clients in the vital oil and gas extraction sector focused on long term programmes.

The Warwickshire company, announcing its interim results for the six months ending November 30, said a strong performance in the UK critical infrastructure sector and the emergence of new markets in the Middle East had also improved performance.

Revenue totalled £29.8, slightly below the £35.8m recorded in 2008, while underlying profit was £161,000 compared with £532,000 for the corresponding period in 2008.

Activity levels in the UK security systems integration area also began to pick up noticeably towards the end of the period, the company said.

This was reflected with major contract wins in the prisons, transport and police sectors.

A significant new business win came from travel company Stagecoach, which recently awarded the firm a £3.7m contract to install CCTV in all its new buses.

Other contracts were awarded by UK Prisons (£2.1m), Kashagan oilfield (£1.6m), Nexus Rail (£1.1m), London Underground (£0.7m) and West Midlands Police (£0.8m), were the company helped fit out new custody suites.

These helped to offset the sluggish performance in the United States where the declining number of customers in the casinos of Las Vegas and elsewhere curtailed investment plans.

New casinos and hotel venues are in the pipeline but the company said that until footfall improved then the chances of new orders for the company’s Synectics surveillance systems were restricted.

Chief executive John Shepherd, who joined the firm last year, said that overall, he was pleased with the performance and the company’s order books, which stand at £22.1m with £52.5m in the pipeline, were very encouraging and indicative of increasing demand.

A restructuring of the company following his appointment is ongoing although he said it was nearing completion.

The restructuring has seen the company reorganised into four operating divisions: Integration & Managed Services, Synectics Network Systems, Synectics Mobile Systems and Synectics Industrial Systems.

One key development of this has been the appointment of a new team to head up operations in Dubai where the critical infrastructure sector is showing signs of improving.

The company said its activities in the Middle East had been consolidated under the control of the Synectics Network Systems division, with the aim of focussing more on higher margin proprietary systems sales.

Mr Shepherd said: ” The group is settling down well after a period of significant structural change and the new executive team is building momentum, which is underpinning our expectations of a much stronger second half, in our chosen market sectors and territories.”

He said he hoped the UK sector would continue to recover during 2010 and the company was lobbying to persuade local authorities around the country to out-source its CCTV control operations.

However, he said much would depend on what happened after the General Election and how public sector spending might be affected.