The recent announcement that it has won two new contracts, albeit with existing customers, has had no impact on the share price of security and surveillance group Synectics (117.5p) even though this is clearly good news.
The company is a leader in the design, integration and support of advanced security and surveillance systems. Utilising its range of sophisticated cameras, the group can provide its customers with a wide range of specialist services which are tailored to each individual client. The group specialises in a number of sectors where it has built expertise over a number of years and these include gaming (casinos), transport and infrastructure, oil and gas and high security and public space. The company operates on a global basis with offices in the UK, Europe, USA and Asia.
In the year to 30 November 2019, revenues at the company were £68.5m with underlying pre-tax profits coming out at £2.5m for earnings per share on the same basis of 13.9p. Net cash at the year end was £3.6m.
Last week, the company issued a trading update confirming that although there had been inevitable delays to many projects, the group continues to deliver services and support to its customers utilising a growing range of remote capabilities. The group is also maintaining a solid net cash position. At the same time, the company announced two new contracts with existing customers. The first one is a five-year multi-million dollar support contract for a major casino operator for its flagship resort in Asia whilst the second one is a three-year framework contract with Stagecoach, the UK’s largest bus and coach operator. This will provide on-vehicle surveillance systems and maintenance support for their fleet of over 8,000 vehicles. The share price stands at just above half the level of a year ago and we believe this provides an excellent buying opportunity. BUY
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