RNS: Trading Update
Tuesday, 14 June 2022
Synectics plc (AIM: SNX), a leader in the design, integration and support of advanced security and surveillance systems, provides the following trading update for the six months ended 31 May 2022 (“H1 2022”).
Activity levels in the major end-user markets that Synectics serves generally continue to gather momentum, particularly in Oil & Gas and in US gaming. That recovery is as yet less evident in casinos and gaming resorts in Asia-Pacific where leisure travel has remained subdued. Although there are signs of increased customer activity in this region, firm business remains patchy and difficult to predict.
Trading in H1 2022 was in line with the Board’s expectations and produced a considerable positive turnaround from the same period last year, with operating profits expected to be at a broadly similar level to the seasonally stronger second half of last year.
Operating profit for H1 2022 is estimated to be approximately £0.4 million (H1 2021: operating loss £(0.8) million) on revenues of approximately £23.0 million (H1 2021: £22.0 million). Net cash as at 31 May 2022 was approximately £3.9 million (31 May 2021: £3.5 million).
The improved results were largely driven by revenue growth of approximately 20 per cent in the Company’s core Systems division as markets severely affected by the pandemic began their recovery. Although the division experienced some disruption to its supply chains from the prevalent global issues, proactive management meant that there was no material impact on delivery schedules or margins. The Systems division’s gross margins in H1 2022 held up strongly, reflecting both its ability to pass on cost increases, and further progress in the Group’s strategy of increased software content in its deliveries.
Good progress was made in H1 2022 on the Group’s large projects for advanced infrastructure surveillance, including Deutsche Bahn in Berlin and the Cloud-based deployment of Synergy for the City of London Corporation and City of London Police. These continue to act as important reference sites for Synectics’ core advanced technology.
In H1 2022, Synectics Security, the Group’s UK-focused integration division, experienced a decline in revenues compared to the same period last year due principally to customer-led delays on several major projects that had been expected to be largely completed in the half. However, an improvement in the mix of business resulted in higher gross margins and an operating profit in H1 2022 expected to be at a similar level to the satisfactory result achieved in the same period last year.
Overall, the Board is pleased with Synectics’ performance in H1 2022 and continues to expect further acceleration in the trajectory of improvement in the second half of the financial year.
Synectics will provide a further update on trading and announce its unaudited interim results for the six months ended 31 May 2022 on 12 July 2022.
Paul Webb, Chief Executive of Synectics, commented: “A strong team performance has meant we have been able to deliver our goals for this period despite increasing challenges in the supply chain and with markets still subdued. We have all been working through our ‘return to work’ challenges, and are in good shape now to push on together and deliver further improved results in the second half of this financial year and beyond”
For further information, please contact:
Paul Webb, Chief Executive
David Bedford, Finance Director
Tel: +44 (0) 114 280 2828
Tom Griffiths / David Coaten
Tel: +44 (0) 20 7408 4050