TIDMSNX
RNS Number : 5532F
Synectics PLC
11 July 2023
RNS 11 July 2023
Synectics plc
("Synectics" or the "Company" or the "Group")
Interim results for the six months ended 31 May 2023
Synectics plc (AIM: SNX) , a leader in advanced security and
surveillance systems, reports its unaudited interim results for the
six months ended 31 May 2023 ("H1 2023" or "the period").
Headlines(1)
-- H1 2023 revenue 14% ahead of H1 2022 at GBP21.9 million
(H1 2022: GBP19.2 million)
-- Underlying operating profit increased by 61% to GBP0.8
million (H1 2022: GBP0.5 million)
-- Underlying profit before tax up 62% to GBP0.7 million
(H1 2022: GBP0.4 million)
-- Order book as at 31 May 2023 strong at GBP28.4 million
(31 May 2022: GBP24.5 million)
-- Underlying earnings per share up 76% to 3.7p (H1 2022:
2.1p)
-- Net cash as at 31 May 2023 solid at GBP4.0 million (31
May 2022: GBP4.2 million)
-- Results were underpinned by a strong oil & gas market
with progress in other markets being more modest
-- Based on the Company's strong order book, the Board expects
significantly improved trading in the second half of this
financial year
-- The Board's expectations for the year to 30 November 2023
remain unchanged
Commenting on the results, Paul Webb, Chief Executive of
Synectics, said:
"Synectics has now had four consecutive periods of progress in
revenue and profits and is confident of delivering further progress
in H2 2023. Operating in markets that are strong and recovering,
the Company has solid long-term growth potential, from a sound
platform.
The Board expects the Company's results for the year ending 30
November 2023 to be in line with market expectations, despite being
weighted to the seasonally stronger H2. "
Craig Wilson, recently appointed Chair of Synectics, added:
"After conducting a comprehensive business review, it is evident
that Synectics possesses excellent technology in thriving global
markets, including oil & gas, gaming, and public safety, which
are experiencing renewed growth. With a robust financial position
and a clear strategic direction, it is now all about
execution."
(1) All income statement comparatives set out in this
announcement reflect continuing operations unless otherwise
stated.
For further information, please contact:
Synectics plc Tel: +44 (0) 114 280 2828
Paul Webb, Chief Executive
Officer
Amanda Larnder, Chief Financial
Officer
email: info@synecticsplc.com www.synecticsplc.com
Shore Capital Tel: +44 (0) 20 7408 4050
Tom Griffiths / David Coaten
Media enquiries:
Intelligent Conversation Tel: +44 (0) 161 694 3979
Claire Evans
email: claire@weareic.com
About Synectics
Synectics plc (AIM: SNX) is a leader in advanced security
and surveillance systems that help protect people, property,
communities, and assets around the world.
The Company's expertise is in providing solutions for specific
markets where security and surveillance are critical to operations.
These include gaming, oil and gas, public space, transportation,
and critical infrastructure.
Synectics has deep industry experience in these markets and
works closely with customers to deliver solutions that are
tailored to meet their needs. Technical excellence, combined
with decades of experience and long-standing customer relationships,
provides fundamental differentiation from mainstream suppliers
and makes the Company a stand out in its field.
Find out more at www.synecticsplc.com
Chief Executive's Statement
Overview
The Company's performance in H1 2023 was in line with the
Board's expectations, continuing the good progress made
period-on-period over the last two years.
Progress was underpinned by a strong performance in the global
oil & gas market, which is expected to continue. There was some
recovery in the Asian gaming market whilst progress in other
markets was more modest, with further improvement expected.
The Company's order book at 31 May 2023 was materially ahead of
the same date last year, with a significant proportion expected to
trade in the second half of the year (" H2 2023 ").
Order intake since the period end has been strong with around
GBP5.0 million of new orders booked in June 2023 alone, including
the further contract for Saudi Aramco which was announced by the
Company on 4 July 2023.
This order book, and the pipeline of anticipated business,
supports the Board's expectations of significantly improved trading
in H2 2023.
The Board expects the Company's results for the year ending 30
November 2023 (" FY 2023 ") to be in line with market expectations,
despite being weighted to the seasonally stronger H2.
Results
Synectics' revenues for the period were 14 per cent. ahead of H1
2022 at GBP21.9 million (2022: GBP19.2 million) driven mainly by
growth in Synectic Systems, particularly in the global oil &
gas market.
The Group recorded an increased underlying operating profit for
H1 2023 of GBP0.8 million (H1 2022: GBP0.5 million) which was
negatively impacted by GBP0.2 million of foreign exchange losses.
Underlying profit before tax was up 61 per cent. at GBP0.7 million
(H1 2022: GBP0.4 million). Underlying earnings per share were 76
per cent. ahead at 3.7p (H1 2022: 2.1p).
The Company's balance sheet remains solid, with net cash as at
31 May 2022 of GBP4.0 million (31 May 2022: GBP4.2 million),
following planned and well managed increased levels of working
capital. The Company has no bank debt and available undrawn
facilities of GBP3.0 million.
The consolidated firm order book as at 31 May 2022 was strong at
GBP28.4 million (31 May 2022: GBP24.5 million), with almost
two-thirds of it expected to trade in H2 2023 - well ahead of the
same point last year, with the balance being largely long-term
service and support contracts.
More details on these results are set out below in the Business
Review section.
Dividend
The Board has previously set out its intention to recommend only
a final dividend, therefore no interim dividend is being
declared.
Strategic Review
Synectics' primary focus includes oil & gas, gaming, and
public safety markets. These markets have stringent functional and
regulatory requirements, which the Company's advanced technology
effectively fulfils. Both the global scale and recent return to
growth in these markets reinforces the Board's view that the
Company can deliver strong revenue growth by expanding sales
coverage in markets it already knows well. Furthermore, we
anticipate that the Company will benefit from heightened public
attention towards supply chain security risks within our targeted
markets.
The Company acknowledges the immense potential for sales growth
through collaborations with local specialist partners and
integrators in each market. Consequently, it is actively engaged in
developing robust partner sales channels across various territories
and markets. The partners' deep understanding of local dynamics
plays a pivotal role in efficiently and swiftly expanding
Synectics' sales coverage, eliminating the need for establishing a
direct sales approach in every new geography.
A crucial element of the Company's expansion strategy involves
enhancing the ease of deploying its core technology, Synergy, for
its partners. The Company has also made significant investment to
facilitate the product's deployment in cloud environments such as
Microsoft Azure. Additionally, it has integrated further artificial
intelligence capabilities to provide real time alerts, ensuring
operators are immediately notified of potentially suspicious
events.
Our long-standing customer relationships contribute
significantly to the Group's revenue through repeat business,
encompassing upgrades, expansions, and ongoing support. However, it
is important for the Company to increase the level of contracted
recurring revenue through long-term support contracts, software
subscriptions, and licenses. This remains a crucial priority for
the Company.
The Group recognises the importance of engagement with all of
its stakeholders. A recently re-launched website and increasing
levels of social media activity are part of this, with further
activities planned over H2 2023.
Business Review
Synectic Systems
Synectic Systems provides specialist surveillance systems, based
on its own proprietary technology, to global end customers with
large-scale highly complex security requirements, particularly for
gaming, oil & gas, public space, transportation, and critical
infrastructure applications.
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 30 Nov
31 May 31 May 2022
GBP000 2023 2022
Revenue 13,847 11,816 24,201
Gross margin(2) 49.4% 50.4% 50.6%
Operating profit(2) 1,367 722 1,882
Operating margin(2) 9.9% 6.1% 7.8%
(1) Before Group central costs.
Revenues in H1 2023 were over 17 per cent. ahead of H1 2022,
driven primarily by a strong performance in the global oil &
gas market, which is expected to continue.
In the gaming sector globally, whilst interest and activity
levels continue to increase, expected projects and orders are still
experiencing delays. Performance in other markets continued at
similar levels to the previous year.
The current pipeline of oil & gas opportunities is strong
and extends well into 2024. The Company has increased supply chain
and production capacity in line with the expected increased demand
later this year and beyond, and the Company's manufacturing output
of specialist camera stations in H2 2023 is expected to be at a
level not seen since 2014.
In addition to the significant contract win for Saudi Aramco,
which it announced on 13 April 2023, the Company has secured a
further related contract for its specialist COEX(TM) camera
stations, as announced on 4 July 2023. A significant proportion of
this additional contract is expected to be delivered by the end of
this financial year, with the balance to follow in H1 2024.
Gross margins in the period remained strong, despite ongoing
cost pressures in the supply chain. There was no material impact
from supply chain challenges on either customer delivery or
margins, with longer lead times in most cases having already been
factored into project schedules.
As outlined above, increasing the level of contracted recurring
revenue is an important priority for the Company, which continued
to increase during the period to GBP2.0 million (H1 2022: GBP1.7
million) with the order book of long-term contracts increasing
materially to GBP10.5 million (31 May 2022: GBP8.9 million).
Europe, Middle East & Africa (Revenue GBP6.8 million (H1
2022: GBP5.1 million))
Revenues in EMEA were ahead of H1 2022 due to a strong
performance in the oil & gas market, with progress in other
markets relatively flat.
Work continued with the City of London Police on their Safe City
programme, and with the West Midlands Police. Both projects provide
powerful references for Synectics' position at the forefront of
operational control systems for Safe City programmes. Significant
new awards in the region include:
-- The Saudi Aramco contracts referred to above, which will deliver revenue in H2 2023; and
-- A large contract for a multi-site surveillance system for
Sheffield NHS Trust, which has generated significant interest from
this sector.
Asia Pacific (Revenue GBP4.9 million (H1 2022: GBP2.7
million))
A strong oil & gas market and continued recovery in the
gaming sector drove solid revenue growth in the region.
Whilst casino operations in the region have now largely returned
to normal, expected projects across the sector have still been
experiencing delays. The Company announced the award of a large
casino resort project in the Philippines on 28 April 2023, which
was later than had been expected. The Board expects further
progress in H2 2023 and beyond. Recent contract wins of note
include: -
-- A casino contract for Solaire in the Philippines, which will
deliver revenue in H2 2023; and
-- Major expansion to an existing oil and gas project in Australia.
North America (Revenue GBP2.2 million (H1 2022: GBP4.0
million))
Since the effective re-opening of the gaming market in the
region last year, the Company's efforts have necessarily been
focused on supporting existing customers and partners with services
and upgrades as their operations have returned to normal, and the
level of support contract renewal has been good.
Oil & gas performance in the region was solid, with H1
2022's results including a large refinery project that was not
repeated.
The disappointing progress in the region regarding new casino
projects was partly due to a continued delay in the expected award
of some projects, but also as the Company's strategy of developing
new business closely with partners is only now getting off the
ground.
The Board expects progress to be made in H2 2023, and contracts
for two new casino projects have been received since the period
end. A number of casino projects in the pipeline of expected orders
are now not slated to generate revenue for the Company until early
in 2024. Additionally: -
-- A replacement system for an existing long-term casino
customer and a project for a new customer awarded since the period
end will deliver H2 2023 revenue in excess of $1.0 million; and
-- A long-term support agreement with an existing major
corporate account covering multiple sites will be worth around $1.0
million over the next five years.
Synectics Security
Synectics Security is a UK-focused provider of electronic
security systems for critical and regulated environments. Its main
markets are in public space, transport, high security, and
infrastructure projects. Its capabilities include UK Government
security-cleared personnel and facilities, with nationwide project
delivery, service and support. Synectics Security delivers products
and technology both from Synectic Systems, and other partners.
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 30 Nov
31 May 31 May 2022
GBP000 2023 2022
Revenue 8,676 8,203 16,595
Gross margin(2) 26.2% 28.6% 26.4%
Operating profit(2) 429 523 1,164
Operating margin(2) 4.9% 6.4% 7.0%
(2) Before Group central costs.
Synectics Security delivered a modest increase in revenues in H1
2023, mainly from the unwinding of delays due to supply chain
constraints affecting on-vehicle business late in FY 2022. This was
offset by slightly lower gross margins realised in closing out some
delayed projects. Contracted recurring revenue in the period was
GBP1.6 million (H1 2022: GBP1.7 million).
Work to re-position the business beyond its traditional
heartland in public space into more complex, critical and highly
regulated security environments is continuing: -
-- A strategically important maintenance contract with the City
of London Police that consolidates Synectics' position as preferred
supplier;
-- Security upgrade projects at multiple UK sites for a major
critical national infrastructure customer, worth more than GBP1.0
million in FY 2023; and
-- New recording systems for Stagecoach London Buses, fully compliant with new TfL requirements.
Technology Development
As outlined above, investment in the Company's intellectual
property and technology base remains an important strategic
priority for the Board.
Expenditure on technology development during H1 2023 was flat at
GBP1.6 million (H1 2022: GBP1.6 million) of which GBP0.4 million
(H1 2022: GBP0.2 million) was capitalised and the remainder
expensed to the income statement. In addition, GBP0.4 million (H1
2022: GBP0.5 million) of previously capitalised development was
amortised in the period. These figures are all included within the
results of Synectic Systems set out above.
Technology development expenditure, which includes investment in
product management, documentation, training resources and quality
assurance, along with hardware and software development, is
expected to increase in H2 2023. A successful recruitment drive in
the period has enhanced development capabilities, bringing in
exciting new talent and building on the proven, world-class
expertise of the core team. This is continuing with momentum into
H2 2023, in line with the Company's investment plans.
This continued investment supports the future-proofing of the
Synergy software platform with web-centric technology to enhance
user experience and capabilities "beyond the control room", and a
suite of intelligent deployment tools make systems less reliant on
the Company's own experts to deploy and support. Other future
developments include modules that customers can utilise on-demand
via a recurring revenue model which are due to be launched early
next year. Immediate development priorities include:
-- Enhanced cloud services, providing significant reporting and
dashboard improvements, allowing users to see data from numerous
subsystems at a glance;
-- Further integrations to best-in class artificial intelligence capabilities; and .
-- New-generation COEX(TM) specialist camera stations for oil
& gas applications to include built-in AI technology that is
market leading.
Summary and Outlook
The Company operates in markets that are strong and recovering,
with solid long-term growth potential. Synectics has deep
experience and a clearly defined position in these markets.
The fundamentals of the business are healthy, with a strong
balance sheet that provides a robust platform for future growth.
The depth of customer relationships, the calibre of people, and the
quality of technical expertise are the core pillars upon which
Synectics is built.
Since its return to profit in H2 2021, the Company has now had
four consecutive periods of progress in revenue and profits and is
confident of delivering further progress in H2 2023.
The Company's consolidated order book is significantly ahead of
that as at 30 November 2022, with a significant proportion expected
to trade in H2 2023. Order intake has continued strongly since the
period end with around GBP5.0 million of new orders booked in June
2023 alone.
Based on the current order book and pipeline of anticipated
business, the Board expects the Company's results for the year
ending 30 November 2023 to be in line with market expectations,
despite being weighted to the seasonally stronger H2.
Paul Webb
Chief Executive
11 July 2023
Consolidated income statement
For the six months ended 31 May 2023
Unaudited Unaudited
six months six months
ended ended
31 May 31 May
2023 2022
Continuing operations Notes GBP000 GBP000
---------------------------------------------- ----- ------------ -----------
Revenue 3 21,851 19,159
Cost of sales (12,736) (10,862)
---------------------------------------------- ----- ------------ -----------
Gross profit 9,115 8,297
Operating expenses (8,351) (7,823)
---------------------------------------------- ----- ------------ -----------
Operating profit before non-underlying
items 764 474
Non-underlying items 5 (87) -
---------------------------------------------- ----- ------------ -----------
Operating profit 677 474
Finance costs (46) (32)
---------------------------------------------- ----- ------------ -----------
Profit before tax 631 442
Income tax expense 6 (66) (80)
---------------------------------------------- ----- ------------ -----------
Profit for the period from continuing
operations 565 362
Profit for the period from discontinued
operations(3) 4 - 43
---------------------------------------------- ----- ------------ -----------
Profit attributable to equity holders
of the Parent 565 405
---------------------------------------------- ----- ------------ -----------
Earnings per share from continuing operations 8
---------------------------------------------- ----- ------------ -----------
Basic 3.3 2.1p
Diluted 3.3 2.1p
---------------------------------------------- ----- ------------ -----------
Earnings per share from continuing and
discontinued operations 8
Basic 3.3 2.4p
Diluted 3.3 2.4p
---------------------------------------------- ----- ------------ -------------
(3) Discontinued operations relates to the sale of SSS
Management Services Limited on 30 November 2022
Consolidated statement of comprehensive income
For the six months ended 31 May 2023
Unaudited Unaudited
six months six months
ended ended
31 May 31 May
2023 2022
Continuing operations GBP000 GBP000
------------------------------------------------- ------------ -----------
Profit for the period from continuing operations 565 362
Items that may be reclassified subsequently
to profit or loss
Exchange differences on translation of foreign
operations (8) 18
Losses on a hedge of a net investment taken
to equity (13) (7)
------------------------------------------------- ------------ -----------
(21) 11
------------------------------------------------- ------------ -----------
Total comprehensive income from continuing operations 544
373
Total comprehensive income from discontinued operations - 43
Total comprehensive income for the period attributable
to equity holders of the Parent 544 416
------------------------------------------------------- ----------------------- ---
Consolidated statement of financial position
As at 31 May 2023
Unaudited Unaudited
31 May 31 May 30 Nov
2023 2022 2022
GBP000 GBP000 GBP000
-------------------------------------- --------- --------- --------
Non-current assets
Property, plant and equipment 4,359 4,464 4,598
Goodwill and intangible assets 20,801 21,389 20,776
Deferred tax assets 2,660 2,387 2,741
--------------------------------------- --------- --------- --------
27,820 28,240 28,115
-------------------------------------- --------- --------- --------
Current assets
Inventories 4,345 4,481 4,219
Trade and other receivables 9,688 10,586 9,090
Contract assets 6,917 6,701 6,317
Tax assets 5 - 425
Cash and cash equivalents 3,996 4,201 4,256
--------------------------------------- --------- --------- --------
24,951 25,969 24,307
-------------------------------------- --------- --------- --------
Total assets 52,771 54,209 52,422
--------------------------------------- --------- --------- --------
Current liabilities
Trade and other payables (7,861) (10,961) (8,111)
Contract liabilities (2,477) (3,169) (1,875)
Lease liabilities (683) (494) (683)
Tax liabilities - (15) -
Provisions (783) (517) (796)
--------------------------------------- --------- --------- --------
(11,804) (15,156) (11,465)
-------------------------------------- --------- --------- --------
Non-current liabilities
Provisions (752) (1,037) (746)
Lease liabilities (1,901) (1,959) (2,137)
Deferred tax liabilities (1,072) (549) (1,072)
--------------------------------------- --------- --------- --------
(3,725) (3,545) (3,955)
-------------------------------------- --------- --------- --------
Total liabilities (15,529) (18,701) (15,420)
--------------------------------------- --------- --------- --------
Net assets 37,242 35,508 37,002
--------------------------------------- --------- --------- --------
Equity attributable to equity holders
of the Parent
Called up share capital 3,559 3,559 3,559
Share premium account 16,043 16,043 16,043
Merger reserve 9,971 9,971 9,971
Other reserves (1,436) (1,436) (1,436)
Currency translation reserve 919 7 26 940
Retained earnings 8,186 6,645 7,925
--------------------------------------- --------- --------- --------
Total equity 37,242 35,508 37,002
--------------------------------------- --------- --------- --------
Consolidated statement of changes in equity
For the six months ended 31 May 2023
Called
up Share Currency
share premium Merger Other translation Retained
capital account reserve reserves reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------------- -------- -------- --------- ---------- ------------ ---------- --------
At 1 December 2021 3,559 16,043 9,971 (1,436) 715 6,492 35,344
Profit for the period - - - - - 405 405
Other comprehensive income
Currency translation adjustment - - - - 11 - 11
---------------------------------- -------- -------- --------- ---------- ------------ ---------- --------
Total other comprehensive
income - - - - 11 - 11
---------------------------------- -------- -------- --------- ---------- ------------ ---------- ----------
Total comprehensive income 11 405 416
Dividends paid - - - - - (253) (253)
Credit in relation to share-based
payments - - - - - 1 1
---------------------------------- -------- -------- --------- ---------- ------------ ---------- --------
At 31 May 2022 3,559 16,043 9,971 (1,436) 726 6,645 35,508
Profit for the period - - - - - 1,060 1,060
Other comprehensive income
Currency translation adjustment - - - - 276 - 276
Tax relating to components
of other comprehensive income - - - - (62) 172 110
---------------------------------- -------- -------- --------- ---------- ------------ ---------- --------
Total other comprehensive
income - - - - 214 172 386
---------------------------------- -------- -------- --------- ---------- ------------ ---------- --------
Total comprehensive income - - - - 214 1,232 1,446
Credit in relation to share-based
payments - - - - - 48 48
---------------------------------- -------- -------- --------- ---------- ------------ ---------- --------
At 30 November 2022 3,559 16,043 9,971 (1,436) 940 7,925 37,002
Profit for the period - - - - - 565 565
Other comprehensive income
Currency translation adjustment - - - - (21) - (21)
---------------------------------- -------- -------- --------- ---------- ------------ ---------- --------
Total other comprehensive
income - - - - (21) - (21)
---------------------------------- -------- -------- --------- ---------- ------------ ---------- --------
Total comprehensive income - - - - (21) 565 544
Dividends paid - - - - - (338) (338)
Credit in relation to share-based
payments - - - - - 34 34
---------------------------------- -------- -------- --------- ---------- ------------ ---------- --------
At 31 May 2023 3,559 16,043 9,971 (1,436) 919 8,186 37,242
---------------------------------- -------- -------- --------- ---------- ------------ ---------- --------
Consolidated cash flow statement
For the six months ended 31 May 2023
Unaudited Unaudited
six months six months
ended ended
31 May 2023 31 May 2022
GBP000 GBP000
------------------------------------------- ------------- ------------
Cash flows from operating activities
Profit from continuing operations 565 362
Profit from discontinued operations - 43
Profit for the period 565 405
Income tax expense 66 80
Finance costs 46 40
Depreciation and amortisation charge 917 1,105
Loss on disposal of non-current assets - 22
Net foreign exchange differences 156 (121)
Net movement in provisions 4 48
Share-based payment charge 34 1
------------------------------------------- ------------- --------------
Operating cash flows before movement
in working capital 1,788 1,580
Increase in inventories (126) (540)
Increase in trade, other and contract
receivables (1,302) (689)
Increase in trade, other and contract
payables 420 52
Cash generated from operations 780 403
Tax received 418 28
------------------------------------------- ------------- --------------
Net cash from operating activities 1,198 431
------------------------------------------- ------------- --------------
Cash flows from investing activities
Purchase of property, plant and equipment (146) (51)
Capitalised development costs (430) (160)
Purchased software (11) (19)
------------------------------------------- ------------- --------------
Net cash used in investing activities (587) (230)
------------------------------------------- ------------- --------------
Cash flows from financing activities
Lease payments (431) (426)
Dividends paid (338) (253)
------------------------------------------- ------------- --------------
Net cash used in financing activities (769) (679)
------------------------------------------- ------------- --------------
Net decrease in cash and cash equivalents (158) (478)
Effect of exchange rate changes on
cash (102) 38
Cash and cash equivalents at the beginning
of the period 4,256 4,641
------------------------------------------- ------------- --------------
Cash and cash equivalents at the end
of the period 3,996 4,201
------------------------------------------- ------------- ------------
Notes
For the six months ended 31 May 2023
1 General information
These condensed consolidated interim financial statements were
approved by the Board of Directors on 10 July 2023.
2 Basis of preparation
These consolidated interim financial statements of the Group are
for the six months ended 31 May 2023.
These interim financial statements do not include all the
information and disclosures normally included in the annual
financial statements. Accordingly, these interim financial
statements should be read in conjunction with the Group's annual
financial statements for the year ended 30 November 2022.
These interim financial statements for the six months to 31 May
2023 have not been audited or reviewed by an auditor pursuant to
the Auditing Practices Board guidance on Review of Interim
Financial Information.
The condensed consolidated interim financial statements have
been prepared on the basis of the accounting policies expected to
be adopted by the Group for the year ending 30 November 2023. The
Group did not have to change its accounting policies as a result of
adopting new standards.
AIM-listed companies are not required to comply with IAS 34
'Interim Financial Reporting' and accordingly the Company has taken
advantage of this exemption.
Discontinued operations
Discontinued operations relate to operations of the Group which
have been disposed of in the previous year and where operations and
cash flows could be clearly distinguished from the rest of the
Group. The net results of discontinued operations are presented
separately in the consolidated income statement (and the restated
comparatives).
Notes to the consolidated statement of financial position are
presented on a total group basis and, as a result, income statement
and cash flow movements included in these notes for the comparative
period may not reconcile to those presented in the consolidated
income statement and the consolidated cash flow statement.
3 Segmental analysis
Revenue by operating segment
Unaudited
Unaudited six months
six months ended
ended 31 May
31 May 2023 2022
Revenue - continuing operations GBP000 GBP000
---------------------------------------- ------------- -----------
Systems 13,846 11,816
Security 8,676 8,203
---------------------------------------- ------------- -----------
Total segmental revenue 22,522 20,019
Reconciliation to consolidated revenue:
Intra-Group sales (671) (860)
---------------------------------------- ------------- -----------
21,851 19,159
---------------------------------------- ------------- -----------
Underlying operating result by operating segment
Unaudited
Unaudited six months
six months ended
ended 31 May
Underlying operating profit - continuing 31 May 2023 2022
operations GBP000 GBP000
------------------------------------------ ------------- -----------
Systems 1,367 722
Security 429 524
------------------------------------------ ------------- -----------
Total segmental underlying operating
profit 1,796 1,246
Reconciliation to consolidated underlying
operating profit:
Central costs (1,032) (772)
------------------------------------------ ------------- -----------
764 474
------------------------------------------ ------------- -----------
Underlying operating profit is reconciled to total operating
profit as follows:
Unaudited
Unaudited six months
six months ended
ended 31 May
31 May 2023 2022
Continuing operations GBP000 GBP000
---------------------------- ------------- -----------
Underlying operating profit 764 474
Non-underlying items (87) -
---------------------------- ------------- -----------
677 474
---------------------------- ------------- -----------
4 Discontinued operations
On 11 November 2022, the Group announced that it had reached an
agreement to sell SSS Management Services Limited ('SSS'), which
was previously part of the Group's Security division. On 30
November 2022 the transaction was subsequently completed for
GBP100,000 cash and further contingent consideration of
GBP100,000.
Under IFRS 5 Non-current assets held for sale and discontinued
operations, SSS was disclosed as a discontinued operation in the
Group's annual financial statements for the year ended 30 November
2022. SSS is no longer presented within the segmental note and its
result for the six months ended 31 May 2022 is instead presented
below.
Results from discontinued operations:
Unaudited
Unaudited six months
six months ended
ended 31 May
31 May 2023 2022
GBP000 GBP000
------------------------------------------------ ---------------
Revenue - 3,601
Cost of sales - (2,899)
------------------------------------------------ ---------------
Gross profit - 702
Operating expenses - (651)
------------------------------------------------ ---------------
Operating profit - 51
Finance costs - (8)
------------------------------------------------ ---------------
Profit before tax - 43
Income tax expense - -
------------------------------------------------ ---------------
Profit attributable to discontinued operations - 43
------------------------------------------------ ---------------
5 Non-underlying items
Unaudited
Unaudited six months
six months ended
ended 31 May
31 May 2023 2022
GBP000 GBP000
--------------------------------------------- -----------
Costs associated with legal matters 42 -
Costs associated with the buy-out of the
defined benefit pension scheme 45 -
------------------------------------------ -----------
87 -
------------------------------------------ -----------
6 Taxation
The tax expense of GBP66,000 (2022: GBP80,000) for the period is
based on the estimated rate of corporation tax that is likely to be
effective for the year ending 30 November 2023.
7 Dividends
The Board does not propose to pay an interim dividend (2022:
GBPnil).
8 Earnings per share
Earnings per share are as follows:
Unaudited
six months Unaudited
ended six months
31 May ended
Unaudited 2022 31 May
six months Pence 2022
ended per share Pence
31 May 2023 (continuing per share
Pence per share operations) (Total)
---------------------------- ---------------- ------------ -----------
Basic earnings per share 3.3 2.1 2.4
---------------------------- ---------------- ------------ -----------
Diluted earnings per
share 3.3 2.1 2.4
---------------------------- ---------------- ------------ -----------
Underlying basic earnings
per share 3.7 2.1 2.4
---------------------------- ---------------- ------------ -----------
Underlying diluted earnings
per share 3.7 2.1 2.4
---------------------------- ---------------- ------------ -----------
The calculations of basic and underlying earnings per share are
based upon:
Unaudited Unaudited
six months six months Unaudited
ended ended six months
31 May 31 May ended
2023 2022 Continuing 31 May
operations 2022 Total
GBP000 GBP000 GBP000
---------------------------------------- ----------- ---------------- -----------
Earnings for basic and diluted earnings
per share 565 362 405
Non-underlying items 87 - -
Tax thereon (20) - -
---------------------------------------- ----------- ---------------- -----------
Earnings for underlying basic and
diluted earnings per share 632 362 405
---------------------------------------- ----------- ---------------- -----------
Unaudited Unaudited
six months six months
ended ended
31 May
31 May 2023 2022
000 000
------------------------------------ ------------ -----------
Weighted average number of ordinary
shares - basic calculation 16,889 16,886
Dilutive potential ordinary shares
arising from share options 1 -
------------------------------------ ------------ -----------
Weighted average number of ordinary
shares - diluted calculation 16,890 16,886
------------------------------------ ------------ -----------
9 Availability of results
Copies of this statement are available on the Group's website
(www.synecticsplc.com) and will be available shortly from Synectics
plc, Synectics House, 3-4 Broadfield Close, Sheffield, England S8
0XN.
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END
IR RMMFTMTMBBLJ
(END) Dow Jones Newswires
July 11, 2023 02:00 ET (06:00 GMT)
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