Why Sheffield surveillance firm Synectics expects its results to be below market expectations

Surveillance firm Synectics said results are expected to be materially below market expectation for the year ended November 30, 2019.

Synectics' CEO Paul Webb.

The Sheffield-based group’s core systems division, which supplys Synectics’ high end proprietary surveillance systems globally, has performed well in the year so far and is expected to generate results ahead of the board’s expectations.

However, this positive momentum was “more than” offset by continued weakness in the group’s UK integration businesses in security and mobile transport, the firm added.

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Synectics anticipates a significant improvement in revenue and profits from its integration and managed service division in the second half of this year. However, the firm said weak performance reported at the half year had continued.

Synectics said: “UK market conditions remain difficult and, with apparent uncertainty among Synectics’ private and particularly public sector customers, the pattern of order deferrals and customer-led delays in the progress of existing contracts continues.

“In addition, the Group’s on-vehicle security activities were expected to deliver an acceptable positive profit contribution in the current financial year.

“However, with the disruption from the bankruptcy of a bus manufacturer customer and new bus registrations in the UK market continuing to be substantially down year-on-year, this will not now be the case.

“By contrast, the group’s core systems division, with the majority of its revenues generated outside the UK, has made solid progress throughout the year and its results are expected to be ahead of the board’s expectations.

“In particular, Synectics has made substantial progress in its target market sectors of transport and infrastructure and high security and continues to achieve excellent results from its gaming surveillance activities in the Far East and North America.”