Synectics in good shape despite political uncertainty

Synectics won a lucrative contract at Jakarta Airport

The Sheffield-based firm, which undertakes million pound projects for surveillance casinos in Asia and Las Vegas, said the market for high-end electronic security and surveillance worldwide is fundamentally strong and likely to remain so.

However it warned that the current economic and political environment is more uncertain than it would like, and it is conscious of the need to pay close attention to risk analysis and risk mitigation.

Synectics’ chief executive Paul Webb said the group has seen good order intake in gaming, oil and gas and some improvement in transportation projects.

“What sets us apart is we understand what it’s like to operate on an oil platform in the middle of the Atlantic,” he said.

“We understand specifically what are the difficulties and the pressure points rather than just selling products to people. Following our Jakarta Airport contract win last year we are trying to get into airfield security. It’s all about getting close to customers.”

He said the group is the “early shoots of recovery” in the oil and gas market.

“Last year was very weak. It is still significantly below where it was in 2012 and 2013, but it’s a lot better than it was this time last year,” he said.

“The recovery will be slow and it will still be 2018 before we see significant movements.”

He said the group has cut costs to meet diminished market demand.

“We have put the business in really good shape,” he added.

He said that decisions are taking longer than usual because of the uncertainty surrounding Brexit and the election of Donald Trump, but said this is being counteracted by some fast decisions on critical high security environments.

The group said that following an exceptionally strong performance in gaming (casinos) in the second half of 2016, following the delivery of systems for two large Far East integrated resorts, it had anticipated a quieter first half of this financial year.

However, activity turned out to be stronger than expected, with the US market growing noticeably and further sales successes in the Far East. Key wins during the first half included a large expansion to an existing North American property, a casino in the Philippines and additions for existing clients elsewhere in the Far East.

In the six months to May 31, Synectics said revenue rose 5 per cent to £34m and pre-tax profit rose from £200,000 to £1.3m.

Order intake was £41.8m, leaving the order book at £33.7m at the end of May. In light of improved profits, the group will pay a resumed interim dividend of 1.0p per share. This is the first interim dividend paid since 2013.