Middle East unrest hits Quadnetics projects
SECURITY group Quadnetics has been hit by events in the Middle East, where political unrest has led to the cancellation of several projects, its AGM will hear later today.
The Warwickshire business, which provides integrated electronic security systems and services to specialist high-end markets, has also seen ‘patchy’ UK performance, although its US operations are delivering strong results.
In a statement to the AGM, chairman David Coghlan will say: “The board expects that Quadnetics’ trading in the six months to May 31, 2011, will be in line with the group’s operating plan, though with variations in performance across divisions and across geographical end markets.
“As anticipated, surveillance markets dependent on the UK public sector continue to be patchy, with projects in both defence and local authority areas experiencing delays in contract awards.
“We have also seen lower than expected demand for on-bus surveillance systems; underlying new bus orders in the UK have remained quite weak, although recently there has been some evidence of recovery. In contrast, sales to the UK financial services sector have been strong.
“Outside the UK, recent political events in the Middle East have resulted in the cancellation or delay of a number of projects across the region. Despite this, Synectics Networks’ operations in Dubai are still expected to move from start-up losses into profit in the six months to May 31, 2011.
“In North America, sales of casino and gaming surveillance systems have been especially strong, with some important new customer and contract wins so far this financial year. Progress in Synectics’ oil and gas division has been equally strong, notably including work on the first systems for the Gorgon natural gas project in Australia, where the scope of the contract continues to grow.
“The quality of our technology, and the diversity of specialist end markets which Quadnetics serves, continue to provide a measure of protection against uncertainties in individual business sectors or geographical regions. Overall, the Company anticipates that results for the current year will be in line with market expectations.”
In March this year, Quadnetics full year results showed a 77% rise in full year pre-tax profits despite falling revenues. Underlying pre-tax profits jumped from £1.5m in 2009 to £2.6m last year. This is despite revenues declining to £61.3m compared with £64.7m a year ago.
