TIDMSNX
RNS Number : 9899E
Synectics PLC
13 July 2021
RNS 13 July 2021
Synectics plc
("Synectics" or the "Company" or the "Group")
Interim results for the six months ended 31 May 2021
Synectics plc (AIM: SNX) , a leader in the design, integration
and support of advanced security and surveillance systems, reports
its unaudited interim results for the six months ended 31 May
2021.
Headlines
-- Substantial continuing impact from Covid-19 on customers'
operations, especially in the gaming sector
-- Major successes for latest Synergy product in Berlin delivery
and new City of London and West Midlands contracts
-- Revenue GBP22.0 million (2020: GBP23.0 million)
-- Underlying loss before tax(1) reduced substantially to
GBP(0.8) million (2020: GBP(2.0) million)
-- Loss before tax GBP(0.8) million (2020: GBP(2.3) million)
-- Order book as at 31 May 2021 up 19% to GBP30.3 million
since year end (30 November 2020: GBP25.4 million, 31
May 2020: GBP26.1 million)
-- Net cash as at 31 May 2021 GBP3.5 million (31 May 2020:
GBP4.6 million) with no bank debt
-- Cost reduction actions taken in 2020 delivered expected
savings
-- Company expects to trade profitably in the second half
of the year
(1) Underlying profit represents profit before tax and
non-underlying items (which comprise amortisation of acquired
intangibles, and restructuring costs in 2020).
Commenting on the results, Paul Webb, Chief Executive of
Synectics, said:
"Trading in the first half of the year was as expected, with
significantly reduced operating losses, and major successes for the
latest Synergy product. We expect that the Group will trade
profitably in the second half of this financial year."
For further information, please contact:
Synectics plc Tel: +44 (0) 114 280 2828
Paul Webb, Chief Executive
David Coghlan, Chairman
David Bedford, Finance Director
email: info@synecticsplc.com www.synecticsplc.com
Shore Capital Tel: +44 (0) 20 7408 4050
Tom Griffiths / Henry Willcocks
/ David Coaten
Media enquiries:
Intelligent Conversation Tel: +44 (0) 161
694 3979
Claire Evans
email: claire@weareic.com
Chairman's Statement
Overview
Trading in the first half of this financial year was as
expected. Revenue was marginally below the corresponding period
last year, principally reflecting on the one hand a further decline
in casino and gaming resorts surveillance, where Synectics is the
global market leader in a sector that remained largely closed, and,
on the other hand, a notable increase in activity in the UK and
European security markets that the Group addresses.
Despite the lower revenue, operating results improved
significantly, as a result of both the cost reduction and business
consolidation actions taken in 2020, which delivered pro rata
savings slightly ahead of the annualised GBP2.4 million target. An
improved performance from the Company's Security division was also
a contributing factor.
Most pleasingly, Synectics continued to make strong progress
during the half year with the new Synergy surveillance command and
control platform for major urban transportation and infrastructure
hubs. The innovative Berlin S-Bahn system for Deutsche Bahn went
live successfully as planned on 1 January 2021, and we were
delighted to receive public accolades from the customer for that
achievement. As set out in the Company's most recent annual report,
the importance of this initial implementation of the new version of
Synergy in Berlin was borne out by the award to Synectics in April
2021 of a major order for a similarly innovative, cloud-based,
surveillance control system by the City of London Corporation for
their Secure City Programme in conjunction with the City of London
Police.
A critical strategic focus, addressing a new and growing market,
these new Synergy systems are almost wholly software-based. They
underpin the Group's objective of increasing earnings quality
through a higher gross margin business mix and an increasing
proportion of recurring and repeat revenue.
Results
Synectics' revenue for the first half declined by 4.6% to
GBP22.0 million, compared with GBP23.0 million in the same period
last year. The Group recorded a significantly improved consolidated
underlying loss before tax(1) of GBP(0.8) million (2020: GBP(2.0)
million). There were no material non-underlying items, therefore
the loss before tax was also GBP(0.8) million (2020: GBP(2.3)
million). The underlying diluted loss per share for the half year
was materially lower at (2.9)p (2020: (9.4)p).
More details on these results are set out in the divisional
reports below.
Net cash at 31 May 2021 was GBP3.5 million (31 May 2020: GBP4.6
million, Nov 2020: GBP6.9 million). The Company has no bank debt
and available undrawn facilities of GBP3.0 million.
After significant unwinding in 2020, working capital moved back
towards more normal levels during the period. As they return to
profitability, Synectics' businesses will be able to convert a
substantial portion of profits into free cash flow, subject to
short-term working capital balances that can fluctuate
significantly. The Group expects to generate positive cash flow in
the second half of the current financial year.
Dividend
In view of the loss incurred during the half year, and the
continuing uncertainty in global markets, the Board has decided not
to declare an interim dividend. The position will be reviewed again
at the time of the release of the Company's audited final results
for the year ending 30 November 2021.
Business Review
Systems Division
Synectics' Systems division provides specialist electronic
surveillance systems, based on its proprietary technology, to
global end customers with large-scale highly complex security
requirements, particularly for transport & infrastructure,
gaming, high security & public space protection and oil &
gas operations.
Six months Six months Year ended
ended ended 30 Nov
31 May 31 May 2020
GBP000 2021 2020
Revenue 9,801 12,568 23,645
Gross margin(2) 47.8% 44.9% 40.8%
Operating profit/(loss)(2) (482) (731) (1,775)
Operating margin(2) (4.9)% (5.8)% (7.5)%
(2) Before non-underlying items and Group central costs.
The continued closure or minimal operation of almost all major
casino and gaming resorts globally had a substantial impact on the
Systems division's first half revenues in Asia Pacific and North
America. Much of the shortfall compared with the same period last
year represented expected repeat work from long-term customers,
which should return once their businesses are able to trade again
at more normal levels.
Revenue from other customer sectors served by the Systems
division, including transport networks, high security applications
and, to a lesser extent, oil & gas, continued to hold up better
in the face of the pandemic-related business disruptions. Most of
the Systems division revenue from these sectors is government or
quasi-government related and, as such, less exposed to current
restrictions on commercial activity.
The division made good progress in securing additional recurring
revenue through multi-year support contracts, and this is reflected
in a strengthened order book for future years in all regions.
Europe, Middle East & Africa (Revenue GBP6.5 million (2020:
GBP6.9 million))
Revenues in the region continued at a similar level to last
year, underpinned by continuing work on the Berlin project, initial
works for the City of London order referred to above, and further
work for a number of public space customers in the UK. Revenue from
the oil & gas sector in the region continued at the low levels
experienced in the corresponding period last year.
Asia Pacific (Revenue GBP1.7 million (2020: GBP4.0 million))
The half year saw a significant further reduction in revenue
from the gaming sector in the region, with oil & gas sector
revenues at similar reduced levels to the corresponding period last
year. Continued restrictions on travel mean that the Board does not
expect any meaningful recovery in this region until 2022.
North America (Revenue GBP1.6 million (2020: GBP1.6
million))
Revenues in the region were flat on last year. Synectics'
current activities in North America are almost exclusively in
casino operations, which remained at a low level, predominately
comprising system maintenance and support. An increase in activity
in recent months means the Board expects some improvement in
trading here in the second half of the current financial year.
Technology Development
Continued investment in our intellectual property and technology
base within the Systems division remains an important priority for
the Group, and during the half year this investment continued at
planned levels.
Expenditure on technology development during the first half was
GBP1.7 million (2020: GBP2.1 million) of which GBP0.3 million
(2020: GBP0.4 million) was capitalised and the remainder expensed
to the income statement. In addition, GBP0.4 million (2020: GBP0.2
million) of previously capitalised development was amortised in the
period. These figures are all included within the results of the
Systems division set out above.
During the half year, Synectics made significant progress in
implementing the next generation of the Synergy software platform
in initial customer deployments. The newly-released major
functionality extensions include a Workforce Management module and
new mobile device applications, enabling customers to connect
centralised control rooms seamlessly to field operations.
Further development of the Synergy cloud-based evidence
management solution has enabled the Company's customers to reduce
the time and cost of managing incidents across agencies and
jurisdictions. Importantly, Synergy's enhanced built-in
cybersecurity capabilities are deployable across the latest hybrid
and multi-cloud environments, offering secure, deep integrations
with rapidly evolving artificial intelligence-based innovations
such as facial and object recognition.
Synergy has been developed as a hybrid cloud platform. As a
result, the Company's customers can evolve to cloud solutions at a
time and speed that are right for them, without having to abandon
the numerous existing systems and devices across large areas that
are essential to their ongoing operations. The flexibility of
Synergy in being able to combine cloud services with traditional IT
infrastructure in a single unified environment played a significant
part in the securing of our recent major project award from the
City of London Corporation referred to above. These expanded
capabilities have increased Synectics' capacity to address growing
and potentially large markets for similarly intelligent command and
control systems, especially in safe city and integrated transport
applications. Synergy's recent high profile contract awards and
system deployments are generating considerable interest from
potential customers in these markets.
Synectics also released an updated range of its COEX camera
stations during the period. Designed for hazardous-area
applications and able to withstand operating temperatures up to 70
degrees Celsius, this latest range integrates seamlessly with
existing video management systems, including Synergy, and provides
advanced video streaming options.
Security Division
Synectics' Security division is a leading UK provider of design,
integration, monitoring, and management of large-scale electronic
security systems for critical and regulated environments. Its main
markets are in critical infrastructure, transport, and public
space. Its capabilities include UK government security-cleared
personnel and facilities, nationwide project delivery and service
support, and an in-house 24-hour monitoring centre and helpdesk.
Synectics Security supplies proprietary products and technology
from Synectics' Systems division as well as selected outside
partners, and also provides highly-regarded security monitoring and
facilities management services.
Six months Six months Year ended
ended ended 30 Nov
31 May 31 May 2020
GBP000 2021 2020
Revenue 13,106 11,186 21,802
Gross margin(2) 23.6% 24.0% 24.6%
Operating profit/(loss)(2) 497 (209) (387)
Operating margin(2) 3.8% (1.9)% (1.8)%
(2) Before non-underlying items and Group central costs.
The Synectics Security division was consolidated in the second
half of last financial year, bringing together the on-vehicle
security activities with those related to fixed facilities. The
performance figures set out above are on a like-for-like
comparative basis. The improved results reflect revenue growth from
partial recovery in both the on-vehicle and UK security
infrastructure markets, as well as the cost and efficiency benefits
of the internal consolidation of operations.
Particularly notable successes during the period included the
City of London Corporation/City of London Police Secure City
Programme referred to above, where the Security division acts as
prime contractor and integrator supplying the core Synergy solution
and technology from Synectics' Systems division.
Synectics has also been awarded a contract worth in excess of
GBP1.0 million from West Midlands Police to equip its new Event
Control Suite with a comprehensive video management solution which
will be the command centre for the coordination and control of
major incidents and events in the West Midlands. The solution,
based on Synectics' Synergy command and control software platform,
will eventually integrate video feeds from thousands of cameras
into a single management platform through disparate systems at over
thirty sites, including local authorities, sporting venues,
transport hubs and retail centres.
Orders from the UK bus market evidenced some recovery after a
sustained period of decline in new bus registrations in the UK.
Important and sizeable orders were also received from the Republic
of Ireland, both for Irish Rail and major Irish bus operators. The
Irish Rail programme will see Synectics develop and install during
2021 an innovative, safety-critical IP video surveillance system
that enables full connectivity from trains to the engineering depot
and other operational locations. Once the initial implementation is
complete, it will be followed by a five-year in-territory
maintenance programme.
The turnaround in operating results of the division in the first
half has been well managed in line with the Company's plans for the
year. The division's order book and pipeline of new business
underpin an expectation of continuing recovery in revenue and
operating margins to more acceptable levels.
Strategy
Synectics' strategy remains to develop and capitalise on its
market-leading positions within relevant sectors of the global
surveillance and security market where customers value
high-performance, sector-specific capability. Its core market
sectors continue to be transport & infrastructure (including
"safe city" projects), casinos and gaming resorts, high security
facilities and oil & gas. It achieves product differentiation,
cost competitiveness and scalability in these markets by
maintaining a standard modular core technology engine which
supports solutions tailored as required for specific sectors and
customers. The solution can now be delivered in traditional, cloud
or hybrid cloud versions, providing full flexibility for a
customer's desired technical deployment.
Significant technology development investment is focused on
expanding the range of capabilities of the core Synergy platform to
enable end-to-end control of the overall surveillance and security
operations function. To customers whose other options would largely
be based on bespoke development, the Synectics' alternative offers
the flexibility and power they need, but at lower cost and with
substantially reduced risk.
Once installed, these software-based systems tend to engender
long term customer relationships, with contracts for ongoing
licensing, support and upgrades.
The momentum of Synectics' strategy is demonstrated by the
recent contract wins against global competitors in major projects
for Berlin, London and the West Midlands, referred to above, and in
the Group's growing pipeline of similar opportunities.
Outlook
In the Company's last Annual Report in March 2021, I wrote that
the timing, profile, and end point of the global pandemic recovery
in the markets where Synectics operates were still highly
uncertain. That manifestly remains the case. Nevertheless, we have
seen tangible evidence of improvement in certain sectors and
markets in more recent months.
The Group's consolidated firm order book as at 31 May 2021 was
19% higher than at the financial year end six months earlier. This
growth has been achieved across both divisions and in all regions,
though in the case of Asia and North America from an exceptionally
low base.
During 2020, the Board took the required actions to reduce the
Group's cost base, accelerate planned changes to simplify and
sharpen the focus of our operations, and to preserve investment in
the Company's proprietary technology. These actions have left
Synectics both financially sound and well placed to capitalise on
its recent strategic contract successes. The current environment
requires continuing caution and sharp vigilance on costs, but the
Company's strategy is clear and is demonstrating tangible results
in its core target market.
Although there are still new orders to be closed to achieve
current plans for the remainder of the financial year, the Board is
increasingly confident that Synectics will record revenue growth
and modest positive operating profitability in the second half of
this financial year. The picture for 2022 remains subject to
significant macroeconomic uncertainty, but the Board's base case
expectation is for the Company to deliver in the next financial
year substantial further progress towards our growth and financial
objectives.
David Coghlan
Chairman
13 July 2021
Consolidated Income Statement
For the six months ended 31 May 2021
Unaudited Unaudited
six months six months
ended ended
31 May 2021 31 May
GBP000 2020
Notes GBP000
--------------------------------------------- ------ ------------- -------------
Revenue 3 21,958 23,022
--------------------------------------------- ------ ------------- -------------
Cost of sales excluding other income (14,173) (14,862)
Other income (2) - 189
--------------------------------------------- ------ ------------- -------------
Cost of sales (14,173) (14,673)
--------------------------------------------- ------ ------------- -------------
Gross profit 7,785 8,349
Operating expenses (8,641) (10,514)
Other income 97 344
Loss from operations, before non-underlying
items (759) (1,821)
Non-underlying items(1) (12) (277)
--------------------------------------------- ------ ------------- -------------
Loss from operations (771) (2,098)
Finance income - 51
Finance costs (39) (227)
--------------------------------------------- ------ ------------- -------------
Loss before tax (810) (2,274)
Income tax credit 4 313 458
--------------------------------------------- ------ ------------- -------------
Loss for the period attributable to
equity holders of the Parent Company (497) (1,816)
--------------------------------------------- ------ ------------- -------------
Basic loss per share 7 (2.9p) (10.7p)
--------------------------------------------- ------ ------------- -------------
Diluted loss per share 7 (2.9p) (10.7p)
--------------------------------------------- ------ ------------- -------------
Underlying loss earnings per share 7 (2.9p) (9.4p)
--------------------------------------------- ------ ------------- -------------
Underlying diluted loss per share 7 (2.9p) (9.4p)
--------------------------------------------- ------ ------------- -------------
(1) Non-underlying items represent amortisation of acquired
intangible assets (and restructuring costs in comparative
period).
(2) Other income represents government grant income received in
relation to COVID-19. See basis of preparation (note 2) for further
detail.
Consolidated Statement of Comprehensive Income
For the six months ended 31 May 2021
Unaudited Unaudited
six months six months
ended ended
31 May 2021 31 May
GBP000 2020
GBP000
------------------------------------- -------------- -------------
Loss for the period (497) (1,816)
Items that will not be reclassified
subsequently to profit or loss
Re-measurement loss on defined (1,073) -
benefit pension scheme, net
of tax
(1,570) (1,816)
------------------------------------- -------------- -------------
Items that may be reclassified
subsequently to profit or loss
Exchange differences on translation
of foreign operations (267) 537
Gains/(losses) on a hedge of
a net investment taken to equity 128 (171)
(139) 366
------------------------------------- -------------- -------------
Total comprehensive loss for
the period attributable to
equity holders of the Parent
Company (1,709) (1,450)
--------------------------------------- -------------- -------------
Statement of Financial Position
As at 31 May 2021
Unaudited Unaudited
31 May 31 May 30 Nov
2021 2020 2020
Notes GBP000 GBP000 GBP000
--------------------------------------- ------ ------------ ------------ ---------
Non-current assets
Property, plant and equipment 5,432 6,100 5,243
Intangible assets 21,912 22,047 22,155
Retirement benefit asset 6 - 687 1,325
Deferred tax assets 2,452 1,780 1,864
------
29,796 30,614 30,587
--------------------------------------- ------ ------------ ------------ ---------
Current assets
Inventories 4,390 6,947 4,661
Trade and other receivables 11,316 12,619 9,013
Contract assets 6,738 7,173 8,185
Tax assets 39 25 505
Cash and cash equivalents 3,488 4,600 6,864
--------------------------------------- ------ ------------ ------------ ---------
25,971 31,364 29,228
Total assets 55,767 61,978 59,815
--------------------------------------- ------ ------------ ------------ ---------
Current liabilities
Trade and other payables (13,376) (13,902) (12,839)
Contract liabilities (2,448) (3,016) (4,295)
Lease liabilities (915) (906) (870)
Tax liabilities - (490) (63)
Current provisions (400) (542) (1,621)
--------------------------------------- ------ ------------ ------------ ---------
(17,139) (18,856) (19,688)
--------------------------------------- ------ ------------ ------------ ---------
Non-current liabilities
Non-current provisions
Provisions (552) (489) (575)
Lease liabilities (2,168) (2,294) (1,920)
Deferred tax liabilities (548) (807) (601)
--------------------------------------- ------ ------------ ------------ ---------
(3,268) (3,590) (3,096)
--------------------------------------- ------ ------------ ------------ ---------
Total liabilities (20,407) (22,446) (22,784)
--------------------------------------- ------ ------------ ------------ ---------
Net assets 35,360 39,532 37,031
--------------------------------------- ------ ------------ ------------ ---------
Equity attributable to equity holders
of the Parent Company
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 (1,448) (1,453) (1,448)
Currency translation reserve 780 1,086 919
Retained earnings 6,455 10,326 7,987
--------------------------------------- ------ ------------ ------------ ---------
Total equity 35,360 39,532 37,031
--------------------------------------- ------ ------------ ------------ ---------
Consolidated Statement of Changes in Equity
For the six months ended 31 May 2021
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 2019 3,559 16,043 9,971 (1,499) 720 12,167 40,961
Loss for the period - - - - - (1,816) (1,816)
Other comprehensive
income
Currency translation
adjustment - - - - 366 - 366
Re-measurement gain - - - - - - -
on defined benefit pension
scheme, net of tax
----------------------------- --------- --------- --------- ---------- ------------- ---------- --------
Total other comprehensive
income - - - - 366 - 366
----------------------------- --------- --------- --------- ---------- ------------- ---------- --------
Total comprehensive
(loss) / income for
the period - - - - 366 (1,816) (1,450)
----------------------------- --------- --------- --------- ---------- ------------- ---------- --------
Dividends paid - - - - - - -
Credit in relation to
share-based payments - - - - - 21 21
Share scheme interests
realised in the period - - - 46 - (46) -
----------------------------- --------- --------- --------- ---------- ------------- ---------- --------
At 31 May 2020 3,559 16,043 9,971 (1,453) 1,086 10,326 39,532
Loss for the period - - - - - (2,855) (2,855)
Other comprehensive
income
Currency translation
adjustment - - - - (167) - (167)
Re-measurement gain
on defined benefit pension
scheme, net of tax - - - - - 492 492
----------------------------- --------- --------- --------- ---------- ------------- ---------- --------
Total other comprehensive
income - - - - (167) (2,363) (2,530)
----------------------------- --------- --------- --------- ---------- ------------- ---------- --------
Total comprehensive
(loss) / income for
the period - - - - (167) (2,363) (2,530)
----------------------------- --------- --------- --------- ---------- ------------- ---------- --------
Dividends paid - - - - - - -
Credit in relation to
share-based payments - - - - - 29 29
Share scheme interests
realised in the period - - - 5 - (5) -
----------------------------- --------- --------- --------- ---------- ------------- ---------- --------
At 30 November 2020 3,559 16,043 9,971 (1,448) 919 7,987 37,031
Loss for the period - - - - - (497) (497)
Other comprehensive
income
Currency translation
adjustment - - - - (139) - (139)
Re-measurement gain
on defined benefit pension
scheme, net of tax (see
note 6) - - - - - (1,073) (1,073)
----------------------------- --------- --------- --------- ---------- ------------- ---------- --------
Total other comprehensive
income - - - - (139) (1,073) (1,212)
----------------------------- --------- --------- --------- ---------- ------------- ---------- --------
Total comprehensive
(loss) / income for
the period - - - - (139) (1,570) (1,709)
----------------------------- --------- --------- --------- ---------- ------------- ---------- --------
Dividends paid - - - - - - -
Credit in relation to
share-based payments - - - - - 38 38
Share scheme interests - - - - - - -
realised in the period
----------------------------- --------- --------- --------- ---------- ------------- ---------- --------
At 31 May 2021 3,559 16,043 9,971 (1,448) 780 6,455 35,360
----------------------------- --------- --------- --------- ---------- ------------- ---------- --------
Consolidated Cash Flow Statement
For the six months ended 31 May 2021
Unaudited Unaudited
six months six months
ended ended
31 May 31 May
2021 2020
GBP000 GBP000
-------------------------------------------- ------------ ------------
Cash flows from operating activities
Loss for the period (497) (1,816)
Income tax (credit)/expense (313) (458)
Finance income - (51)
Finance costs 39 227
Depreciation and amortisation charge 1,090 1,075
Profit on disposal of non-current (1) -
assets
Net foreign exchange differences 134 89
Net movement in provisions (1,349) (656)
Share-based payment charge 38 21
---------------------------------------------- ------------ ------------
Operating cash flows before movement
in working capital (859) (1,569)
Decrease in inventories 350 160
(Increase)/decrease in trade, other
and contract receivables (1,107) 6,051
Decrease in trade, other and contract
payables (1,010) (2,194)
---------------------------------------------- ------------ ------------
Cash generated (used in)/from operations (2,626) 2,448
Tax received/(paid) 224 -
-------------------------------------------- ------------ ------------
Net cash (used in)/from operating
activities (2,402) 2,448
---------------------------------------------- ------------ ------------
Cash flows from investing activities
Purchase of property, plant and equipment (99) (207)
Capitalised development costs (265) (419)
Purchased software (89) (41)
Net cash used in investing activities (453) (667)
---------------------------------------------- ------------ ------------
Cash flows from financing activities
Lease payments (551) (599)
Repayment of borrowings - -
Interest paid - (117)
Dividends paid - -
-------------------------------------------- ------------ ------------
Net cash used in financing activities (551) (716)
---------------------------------------------- ------------ ------------
Effect of exchange rate changes on
cash and cash equivalents 30 (45)
Net (decrease)/increase in cash and
cash equivalents (3,376) 1,020
Cash and cash equivalents at the beginning
of the period 6,864 3,580
---------------------------------------------- ------------ ------------
Cash and cash equivalents at the end
of the period 3,488 4,600
---------------------------------------------- ------------ ------------
Notes
1. General information
These consolidated interim financial statements were approved by
the Board of Directors on 12 July 2021.
2. Basis of preparation
These consolidated interim financial statements of the Group are
for the six months ended 31 May 2021.
The comparative figures for the financial year ended 30 November
2020 are the Group's statutory accounts for that financial year.
Those statutory accounts have been reported on by the Group's
auditor and delivered to the Registrar of Companies. The report of
the auditor was (i) unqualified, (ii) did not include a reference
to any matters to which the auditor drew attention by way of
emphasis without qualifying its report and (iii) did not contain a
statement under section 498 of the Companies Act 2006.
The condensed consolidated interim financial statements for the
six months to 31 May 2021 do not include all the information and
disclosures required in the annual financial statements and should
be read in conjunction with the Group's annual financial statements
as at 30 November 2020.
The condensed consolidated interim financial statements for the
six months to 31 May 2021 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 for the
six months to 31 May 2021 have been prepared on the basis of the
accounting policies expected to be adopted by the Company for the
year ending 30 November 2021. These are anticipated to be
consistent with those set out in the Group's latest annual
financial statements for the year ended 30 November 2020. These
accounting policies are drawn up in accordance with adopted
International Accounting Standards ('IAS') and International
Financial Reporting Standards ('IFRS'), in accordance with the
presentation, recognition and measurement criteria of:
International Accounting Standards in conformity with the
requirements of the Companies Act 2006, and the AIM Rules for
Companies.
Significant accounting policies
AIM-listed companies are not required to comply with IAS 34
'Interim Financial Reporting' and accordingly the Company has taken
advantage of this exemption.
3. Segmental analysis
Revenue by operating segment Unaudited Unaudited
six months six months
ended ended
31 May 31 May 2020
2021 GBP000
GBP000
-------------------------------- ------------ -------------
Revenue
Systems 9,801 12,568
Security 13,106 11,186
Total segmental revenue 22,907 23,754
Reconciliation to consolidated
revenue:
Intra-Group sales (949) (732)
--------------------------------- ------------ -------------
21,958 23,022
-------------------------------- ------------ -------------
Underlying operating result by Unaudited Unaudited
operating segment six months six months
ended ended
31 May 31 May
2021 2020
GBP000 GBP000
-------------------------------------- ------------ ------------
Underlying operating profit /
(loss)
Systems (482) (731)
Security 497 (209)
Total segmental underlying operating
profit / (loss) 15 (940)
Reconciliation to consolidated
underlying operating profit /
(loss):
Central costs (774) (881)
--------------------------------------- ------------ ------------
(759) (1,821)
-------------------------------------- ------------ ------------
Underlying operating profit from operations is reconciled to
total profit from operations as follows:
Unaudited Unaudited
six months six months
ended ended
31 May 31 May
2021 2020
GBP000 GBP000
----------------------------- ------------ ------------
Underlying operating profit (759) (1,821)
Non-underlying items (12) (277)
------------------------------ ------------ ------------
(771) (2,098)
----------------------------- ------------ ------------
4. Income tax credit
The income tax credit for the period is based on the estimated
rate of corporation tax that is likely to be effective for the year
to 30 November 2021 .
5. Dividends
No interim dividend (2020: GBPnil) has been announced or will be
paid for the financial year 2021.
6. Retirement Benefit Asset
During the period, the pension scheme was wound up following
securement of a buy-out for all remaining defined benefit pension
scheme liabilities by an insurance company. On 8 December 2020, the
agreement with the insurance company to buy out the liabilities was
signed, and the actuarial valuation was altered in line with IFRIC
14 (13). The economic benefit available as a refund was measured
including the costs to the plan of settling the plan liabilities in
this way. This resulted in a remeasurement loss of GBP1,073,000,
the net of the actuarial valuation of GBP1,325,000 and associated
deferred tax liability of GBP252,000, recognised in other
comprehensive income in these interim financial statements.
7. Earnings per share
Earnings per share are as follows :
Unaudited Unaudited
six months six months
ended ended
31 May 31 May
2021 2020 Pence
Pence per share
per share
------------------------------------------ ------------- ------------
Basic earnings per share (2.9) (10.7)
------------------------------------------- ------------- ------------
Diluted earnings per share (2.9) (10.7)
------------------------------------------- ------------- ------------
Underlying basic earnings per share (2.9) (9.4)
------------------------------------------- ------------- ------------
Underlying diluted earnings per
share (2.9) (9.4)
------------------------------------------- ------------- ------------
The calculations of basic and underlying
earnings per share are based upon:
GBP000 GBP000
------------------------------------------ ------------- ------------
Earnings for basic and diluted earnings
per share (497) (1,816)
Non-underlying items 12 277
Impact of non-underlying items on
tax expense for the period (4) (51)
Earnings for underlying basic and
underlying diluted earnings per
share (489) (1,590)
------------------------------------------- ------------- ------------
Weighted average number of ordinary
shares - basic calculation 16,889 16,902
Dilutive potential ordinary shares 32 -
arising from share options
------------------------------------------ ------------- ------------
Weighted average number of ordinary
shares - diluted calculation 16,921 16,902
------------------------------------------- ------------- ------------
.
8. Availability of results
Copies of this statement are available on the Group's website (
www.synecticsplc.com ) and will be available from Synectics plc,
Synectics House, 3-4 Broadfield Close, Sheffield, England, S8
0XN.
- Ends -
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END
IR EAXXAFEKFEFA
(END) Dow Jones Newswires
July 13, 2021 02:00 ET (06:00 GMT)
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