Quadnetics defies the turmoil across the Middle East

The group, which has its Synectics security technology business in Sheffield, said both half-year and full-year results are on track.

However, shares in the group shed 5.5p to close at 194.5p, a 2.75 per cent fall.

Quadnetics’ chairman David Coghlan told shareholders at its annual meeting yesterday it has seen “variations in performance across divisions and across geographical end markets”.

In the UK, he said surveillance markets dependent on the public sector “continue to be patchy”. Projects in both defence and local authority areas have seen 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,” said Mr Coghlan. “In contrast, sales to the UK financial services sector have been strong.”

Political uprisings, which started in Tunisia but have spread across the region to Libya, Egypt and Syria, have dented sales, warned the group.

Despite this, Synectics Networks’ operations in Dubai are still expected to move from start-up losses into profit in the six months to the end of May, added Mr Coghlan.After enduring a tough recession in North America, sales of casino and gaming surveillance systems have been “especially strong” in recent months, with some key new customer and contract wins so far this financial year, said Mr Coghlan.

He added progress in Synectics’ oil and gas division has been “equally strong”, including work on the first systems for the Gorgon natural gas project in Australia, “where the scope of the contract continues to grow”.

Mr Coghlan said: “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.”

Earlier this year Quadnetics bolstered its defence business with the £260,000 purchase of a defence electronics manufacturer. The group bought Bristol-based Persides Technology Ltd to expand its presence in the defence and hazardous environment sector.