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 -

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

IR EAXXAFEKFEFA

(END) Dow Jones Newswires

July 13, 2021 02:00 ET (06:00 GMT)

Synectics (LSE:SNX)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024 Haga Click aquí para más Gráficas Synectics.
Synectics (LSE:SNX)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024 Haga Click aquí para más Gráficas Synectics.