Synectics set to beat full-year underlying profit expectations
13th Dec 2022 12:59
(Sharecast News) - Security and surveillance technology developer Synectics said in an update on Tuesday that trading had continued in line with its expectations in the financial year just ended.
The AIM-traded firm said second-half profit for the 12 months ended 30 November was expected to be higher than in the first half, resulting in an underlying profit for the full year "slightly ahead" of market forecasts.
Due to ongoing travel restrictions as a result of China's response to Covid-19, it said trading remained "challenging" in casinos and gaming resorts in Asia - one of its core markets - where closures or reduced revenues had resulted in planned surveillance projects being postponed.
"Nevertheless, in the last few weeks, the company has been awarded a contract to provide the surveillance system for a large new-build casino resort in the Philippines, which is expected to be delivered next year," the board said in its statement.
"Further details of this project will be announced in the new year once the detailed contract scope has been finalised.
"As expected, activity levels in the oil and gas market continued to gather momentum in the second half of the year, with a strong trading performance and a solid pipeline of expected orders in 2023."
In other markets, Synectics said client-side delays, combined with extended lead times, meant that trading - while still on a "clear recovery path" - was slightly weaker than forecast.
"The well-documented difficulties with global supply chains and input price inflation continue to be effectively managed by the company, with gross margins holding up well and trading not being materially affected."
The company said its cash balance at year-end on 30 November was £4.1m, compared to £4.2m at the half-year and £4.6m 12 months earlier, with undrawn bank facilities standing at £3m.
At 1219 GMT, shares in Synectics were down 2.04% at 110.2p.
Reporting by Josh White for Sharecast.com.