News Column

Synectics Bullish In Outlook Despite Swing To Loss In Half-Year

July 29, 2014

Hana Stewart-Smith

LONDON (Alliance News) - Synectics PLC Tuesday gave a bullish outlook for its second-half, despite swinging to a pretax loss in the half-year to the end of May as trading was "worse than expected."

The surveillance technology company posted a pretax loss of GBP2.6 million, swung from a profit of GBP3.3 million last year, as revenue declined to GBP31.8 million from GBP40.7 million. Revenue was hit by the timing of orders on new contracts, disruption from consolidating two operations into a single factor, inadequate management of a UK integration project and a "combination of unfortunate external events," said the company.

Synectics said that it "could and should have done much better" duirng the period. The company stressed that these issues were temporary, and that it has addressed specific problems within its control.

Despite this shortfall the company said it expects a strong performance in the second-half, and expects momentum to continue into 2015 and beyond, citing its order book and pipeline of new business. It has maintained its expectations for the full-year.

The company's order book was GBP32.9 million as at May 31, compared to GBP28.1 million at its last year-end.

Synectics has opted not to pay an interim dividend as a result of recording a loss for the period, compared to a 3.0 pence interim dividend in the previous year. However, if it meets its expectations for the second-half, it plans to pay a final dividend of 5.5 pence, in line with the previous year.

The company said that it has been implementing a major reorganisation over the past 18 months, moving its operations to a single management structure, and consolidating its operations centres in Sheffield and Brigg into a single facility in Scunthorpe.

During the period it launched its new command and control software platform Synergy 3, which it said is gaining interest in the market, and it expects the product to be a "cornerstone for future growth in the Far East."

Shares in Synectics were trading down 2.2% at 335.00 pence Tuesday morning.

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Source: Alliance News

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