14th Jul 2020 12:16
(Alliance News) - Synectics PLC on Tuesday said it swung to a loss in the first half of financial 2020 after the Covid-19 crisis hurt its client's operations, especially those in the gaming sector.
Shares in the surveillance systems provider were trading 5.3% lower at 106.50 pence each on Tuesday morning in London.
For the six months ended May 31, Synectics posted revenue of GBP23 million, down 32% year-on-year from GBP33.6 million. Pretax loss was GBP2.3 million, swinging from a profit of GBP1.2 million the year prior.
The Sheffield-based company said the Covid-19 pandemic led to disruptions in its clients' operations with its largest customer sector - casinos and gaming resorts - being virtually shut down and its public transportation customers facing significant business declines.
No interim dividend was declared due to uncertainty. However, Synectics said it will review its position when its annual results are released. For comparison, a 1.3p dividend was paid for the first half of financial 2019.
Synectics said that during the period, it took actions to reduce costs - with four operational sites due to be closed by the end of the year - adding that it now expects a "noticeably improved" underlying trading result in the second half.
"As casinos and gaming resorts start to re-open in North America and Asia, regular maintenance and upgrade revenues from installed gaming systems should begin to pick up quite soon. However, the board expects that the majority of delayed orders for new surveillance projects and major upgrades in this sector are unlikely to return until calendar 2021," said Chair David Coghlan.
"In other customer sectors of the Systems division, transport, high security and oil & gas all look to be picking up somewhat in the second half of the current financial year. The group's UK security integration activities are generally holding up quite well and, despite the evident challenges, are expected to produce a result for the current financial year as a whole at a similar level to the prior year," he added.
Order book as at the end of May was GBP26.1 million. Net cash was 4.6 million.
By Ife Taiwo; [email protected]
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