Quadnetics spies profits warning
CCTV company Quadnetics today said that despite winning a number of major contracts, delays in orders through its Yorkshire operation would hit profits.
Quadnetics is based in Nottingham, where its Quadrant security services business is housed, while the hi-tech Synectics surveillance security technology business is based in Sheffield.
The group said there had been delays to orders made by customers for Synectics’ products which would only be completed in the next financial year.
Synectics has also been hit by cost overruns in the defence and offshore oil and gas industries which has led to reduced margins on two contracts, and knock-on operational impacts.
However, Quadnetics said the issues which led to the overruns “have been firmly addressed”, with management changes being made. The group said the contracts would still be profitable.
Furthermore, performance has been hit by delays to Synectics’ new specialist digital video recorder, meaning that the group will deliver a reduced number of the devices than anticipated.
However, trials of a number of other new products are underway under the Synectics umbrella, which the company believes will boost revenues over the next few years.
Much of Quadnetics’ work is kept secret because of its nature – its surveillance devices were used to help identify the terrorists behind the July 7 bombings.
Despite predicting turnover growth for the full financial year of 20% to around £80m, Quadnetics said underlying pre-tax profits would be below market expectations.
In the year to May 31 2007, sales in North America increased 111% helping the group to achieve an overall 33% increase in turnover to £66.1m. Underlying pre-tax profits rose 47% to £5.3m.
The group said today it had won a number of new contracts, including a £2m deal to supply surveillance systems for casinos, its biggest market, in Europe and North America.
It has also won a three-year contract with a “major retailer” worth more than £1m.
The group said its order book stood at £31m at March 31, an increase of 14% since the beginning of the present financial year.
