United Kingdom-listed Synectics Plc said in a Tuesday update that it expected results in the second half of the group’s financial year ending November 30, to be “broadly similar” to those in the first half. Synectics is a supplier of security and surveillance technology to land-based casino resorts, including venues in Asia Pacific.
In the fiscal first half, the group reported a loss of just over GBP1.8 million (US$2.3 million) compared to a slightly more than GBP1.0 million profit in the same reporting period in 2019. Revenue for the six months ended May 31, 2020 declined by 31.4 percent year-on-year, to GBP23.0 million, from nearly GBP33.6 million.
In its Tuesday update, Synectics noted that the group’s systems division had been “restructured”, in order to “improve customer support” and “reduce the overall cost base” of the group’s global operations.
The group had also completed on December 1 the consolidation of the operations of its integration and managed services division, a move that involved the “closure or downsizing of several operating sites”. The initiative, previously flagged in the group’s interim results, was noted as a way to reduce costs.
Synectics estimated the annual cost savings would be approximately GBP2.4 million, with the benefit being fully realised in the group’s current financial year ending November 30, 2021.
The firm stated that its net cash balance as at November 30 was GBP6.9 million, and that it had additional, undrawn, bank facilities amounting to GBP5 million. The increase in cash held, resulted “largely from lower working capital,” requirements, due to a “reduced” number of revenues needing support. Nonetheless that situation would “unwind, at least in part, as revenues recover to more normal levels”, Synectics said.
Global casinos and gaming is Synectics’s largest market sector, the firm noted.
In its Tuesday lookahead, the firm noted that the board’s forecasts and plans are on the assumption that demand in Covid-19 -affected sectors “will remain weak” in near term. But it has also highlighted that “more optimistic scenarios” were possible.
The audited financial results for the year ended November 30, 2020 are expected to be released on or around March 2, 2021, Synectics noted.
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