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Synectics PLC (SNX)

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Tuesday 29 July, 2014

Synectics PLC

Interim Results

RNS Number : 5484N
Synectics PLC
29 July 2014
 



 

 

 

 

 

 

 

Synectics plc

('Synectics', 'the Company' or 'the Group')

Interim results for the six months ended 31 May 2014

 

Synectics plc (AIM: SNX), a leader in the design, integration, control and management of advanced surveillance technology, and networked security systems, reports its unaudited interim results for the six months ended 31 May 2014.

 

Key Points

·     

Revenue £31.8 million (2013: £40.7 million)


·     

Underlying loss1 £2.5 million (2013: underlying profit1 £3.6 million)


·     

Loss before tax £2.6 million (2013: profit before tax £3.3 million)


·     

Underlying diluted EPS1 (10.8p) (2013: 16.3p)


·     

Diluted basic EPS (11.5p) (2013: 14.6p)


·     

Net debt at 31 May 2014 £5.1 million (30 November 2013: net cash £1.2 million; 31 May 2013: net cash £4.7 million)


·     

Order book £32.9 million (30 November 2013: £28.1 million; 31 May 2013: £34.8 million)


·     

Launch of new Synergy 3 command and control software platform


 

1 Underlying (loss)/profit represents (loss)/profit before tax and non-underlying items (which comprise restructuring costs, acquisition costs, share-based payment charge, amortisation of acquired intangibles and reclassification of available-for-sale financial assets to profit or loss).  Underlying earnings per ordinary share are based on (loss)/profit after tax but before non-underlying items.

 

Commenting on the results, John Shepherd, Chief Executive, said: 

"Though trading in the first half of this year has been worse than expected, none of the fundamental factors which will drive profitable growth have changed.  We continue to focus on delivering advanced proprietary integrated command and control systems to the most demanding global customers and invest in the intellectual property necessary to keep us ahead of the competition.

 

"The detailed reasons for the shortfall against expectations are set out in the Chairman's Statement and I firmly believe that those factors which are within our control have been properly addressed and will not recur.

 

"We have undertaken a thorough review of all projects to ensure there are no further material loss-making contracts and, now integration of the Systems division has been completed, there will be no more disruption to operations.

 

"We have not allowed these setbacks to slow progress against our strategic objectives, especially the launch of our integrated command and control software platform - Synergy 3, which is gaining significant interest in the market.  We have seen strong growth in the Group's consolidated order book and qualified pipeline and are therefore well positioned to maximise the opportunities we can see in our chosen niche markets especially in the Middle and Far East.

 

"I expect a strong performance in the second half of this year and for that momentum to continue into 2015 and beyond."

 

For further information, please contact:

Synectics plc

Tel: +44 (0) 1527 850 080

John Shepherd, Chief Executive

www.synecticsplc.com


Email: [email protected]

Westhouse Securities Limited

Tel: +44 (0) 207 601 6100

Tom Griffiths / Henry Willcocks


Media enquiries:

Buchanan

Tel: +44 (0) 207 466 5000

Mark Court / Fiona Henson / Sophie Cowles

Email: [email protected]

 



 

Chairman's Statement

Introduction

 

The key elements of Synectics' performance in the first half were summarised in the trading statement released by the Company on 25 June 2014.  The first half of 2013/14 had been expected to be a relatively subdued trading period compared with the consistent strong profit growth and increasing margins recorded over the last four years; in the event, it turned out to be significantly worse than expected.

 

The main reasons for the Group's profit shortfall are set out in the operating review below.  In broad terms, they include the timing of orders on large new contracts, disruption from consolidating two operations into a single much bigger factory, and a combination of unfortunate external events and inadequate internal management on a major UK integration project.  The fact remains, we could and should have done much better.

 

The impact of these issues has, however, been temporary.  The specific problems within Synectics' control have been fully addressed and, where necessary, changes have been made.  As we look ahead, the growth in the Group's order book and a strong qualified pipeline of expected new business, details of which are set out below, give the Board confidence that results for the second half will be very strong and that the consistent positive trends of recent years will be restored shortly.  The Company's expectations for the year ending 30 November 2015 remain unchanged.

 

The Group made a number of strategically important advances during the first half.  In particular, Synectics successfully launched Synergy 3, the substantially enhanced new version of its core surveillance command and control software, and completed customer acceptance of the largest and most complex surveillance system in the Group's history, which we expect will be a cornerstone for future growth in the Far East.

 

Results

 

Synectics' revenue for the first half was £31.8 million, compared with £40.7 million in the same period last year.  The Group recorded a consolidated underlying loss1 of £2.5 million (2013: profit of £3.6 million).  The underlying diluted loss per share1 was 10.8p (2013: EPS 16.3p).

 

The Group's total firm order book at 31 May 2014 was £32.9 million (2013: £34.8 million), up 17% from £28.1 million at 30 November 2013.  

 

Net debt at 31 May 2014 was £5.1 million (30 November 2013: net cash £1.2 million; 31 May 2013: net cash £4.7 million).  In addition to funding the operating loss, the cash outflow in the first half was due to expenditure on the development of a new freehold operations centre in Scunthorpe and a significant increase in working capital in the Systems division caused primarily by customer-imposed delays in schedules.  Much of the working capital increase is expected to unwind in the second half of this year.

 

Dividend

 

As a result of the loss reported for the first half, the Board does not propose to pay an interim dividend (2013: 3.0p per share).  On the basis that trading in the second half of the year ending 30 November 2014 is as strong as anticipated, the Board intends to recommend payment of a final dividend of 5.5p per share, the same rate as last year.

 

Operating Review

 

Systems

 

Synectics' Systems division provides specialist video-based electronic surveillance systems and technology globally to end customers with large-scale highly complex security requirements, particularly for oil & gas operations, gaming and critical infrastructure protection. 

 

£000

Six months ended

31 May

 2014

Six months ended

31 May

 2013

Year ended

30 Nov

2013

 

 

 

 

Revenue

15,601

22,940

44,753

Gross margin

37.2%

38.9%

38.5%

Operating profit2

168

3,625

7,009

Operating margin2

1.1%

15.8%

15.7%

 

2 Before non-underlying items and Group central costs

 

Over the past 18 months Synectics has been implementing a major reorganisation of the Group's technology-based Systems division, aimed at creating a much more unified, efficient and scalable business.  The final, and in many ways most challenging, step in that consolidation process has been the physical relocation of the division's two UK operations centres in Sheffield and Brigg into a single new 54,000 square foot freehold facility in Scunthorpe.  The move was completed towards the end of the first half.

 

Fulfilling the plan laid out some time ago, Systems now operates under a single functional management structure, with headquarters, sales/marketing, and technical development in Sheffield, operations in Scunthorpe and sales/local operations/support hubs in the US, Germany, Singapore and the UAE. Although the costs of disruption in the final relocation stage were somewhat greater than initially envisaged, achieving this organisational objective is a significant milestone in the Group's development.

 

In addition to the disruption referred to above, reduced revenues in the half resulted mainly from customers extending their original schedules, both for new contract awards and for deliveries under existing contracts.  Management believes that these delays are project-specific issues, rather than evidence of underlying softening in what remains a very active market, especially in the oil & gas and gaming sectors.  Recent increases in the division's order book support that judgement.

 

Synectics' new Synergy 3 core software product was officially launched in April 2014 and has been received positively by existing and potential new customers.  For the first time, Synergy 3 allows the same core command and control integration platform to manage surveillance systems from modest size up to the largest systems in the world, including customised integrated handling in one user interface of video surveillance, audio communications, access control, fire or smoke alarms, video analytics and input from virtually any other electronic sensor from any manufacturer.

 

Another highlight in the first half was achieving customer acceptance for the largest and most complex surveillance system Synectics has supplied.  This system, for a customer in the Far East, was delivered in stages last year and has been performing well in a mission critical environment since installation.  Follow on sales for this site in 2014 have already amounted to £0.7 million.  We believe the market for similar systems in the region is growing strongly, and we anticipate being able to generate additional such sales over coming months.

 

Major projects delivered in the first half year included $4 million sales to Penn Gaming for new, upgraded and replacement surveillance systems in the United States, and an additional $2.6 million of sales to replace systems on gaming sites in Ontario, Canada which were initially supplied by Synectics over seven years ago.

 

Indanet, our European transport operation, has also recently extended two major contracts to provide maintenance services for CCTV and information infrastructure to BVG, Berlin's main public transport operator, for a period of four years, with a total value of €4 million.

 

The trading statement released on 25 June 2014 referred to indefinite delays caused by current events in Iraq to certain large oil & gas surveillance system contracts originally expected to be awarded to the Group later this year.  Despite having removed these contracts from the division's forecasts, Systems is still expected to trade strongly in the second half.

 

 

Integration & Managed Services

 

Synectics' Integration & Managed Services ('IMS') division is one of the leading UK providers of design, integration, turn-key supply, monitoring and management of large-scale electronic security systems.  Its main markets are in critical infrastructure, transport, public space and multi-site systems.  Its capabilities include a nationwide network of service engineers, UK government security-cleared personnel and facilities, and an in-house 24-hour monitoring centre and helpdesk.  The IMS division supplies proprietary products and technology from Synectics' Systems division as well as from third parties.

 

 

 

 

 

£000

Six months ended

31 May

 2014

Six months ended

31 May

 2013

 

Year ended

30 Nov

2013

 

 

 

 

Revenue

16,566

18,075

38,368

Gross margin

15.5%

26.4%

24.7%

Operating (loss)/profit2

(1,415)

1,109

2,223

Operating margin2

(8.5%)

6.1%

5.8%

 

The IMS division comprises three areas of activity.  Two of these, mobile systems and managed services, performed acceptably during the first half though, in the case of mobile systems, margins were adversely affected by start-up costs on a large new long-term contract.

 

The third and largest area of activity within the IMS division, integrated systems, performed poorly.  This was principally the result of problems on a large surveillance system integration sub-contract, which is a small part of a major new construction project within the UK.  Some of the issues arose from delays and inefficiencies caused by adverse weather, limited site access and the actions of other contractors.  However, inadequate internal project management contributed materially to the losses on the contract.  The total negative impact of the reduced revenues and additional costs incurred or provided for on this project in the first half was £1.1 million.  No further significant costs arising on this project are expected in the second half of 2014.

 

A thorough review by senior management of all integration projects has not revealed any other material loss-making contracts.

 

Firm action has been taken by Group management to address the issues, including changes of senior management personnel and structure within the division.  These changes have provided the opportunity to accelerate a closer integration of the managed services and integrated systems areas within the IMS division, and there are early signs of potential benefits to both revenue and costs from such closer working.

 

Major wins during the first half included a contract worth around £0.9 million over three years to deliver facilities management helpdesk services to one of the UK's largest builders' merchants which has an estate of over 2,000 properties, and through our integrated systems business we further developed our relationship with the UK Ministry of Justice by providing security systems worth £0.5 million in total to a number of prison sites.

 

During 2013 we announced that Synectics had either renewed or won contracts with Stagecoach and Go-Ahead Group, each for a three-year period.  Sales to these two major transport companies amounted to £1.3 million in the first half of 2014, and we expect this level of activity to increase in the second half.

 

Synectics' IMS division remains one of the UK's largest and most capable providers of security systems and services, and the Board is confident of a return to solid profitability in the second half of this year.

 

 

 

 

 

Research & Development

 

Group expenditure on technology development during the six month period totalled £1.3 million (2013: £1.2 million) of which £0.6 million (2013: £0.3 million) was capitalised and the remainder expensed to profit and loss.  £0.2 million of previously capitalised development was amortised in the period.  These figures are included within the results of the Systems division.

 

During the first half, the development team achieved an important milestone with the successful launch of Synergy 3, referred to above, as well as good progress on the other development roadmap priorities approved by the Board.

 

Outlook

 

The Board expects strongly positive trading in the second half of this year.  This is based on substantial growth in the Group's consolidated order book, which stood at £32.9 million at 31 May 2014 compared with £28.1 million at our last year end, and by an increase of 34% in the Group's qualified pipeline of anticipated orders to £46.8 million at 31 May 2014 (30 November 2013: £35.0 million).

 

From a wider perspective, activity levels in most of our end markets remain high, particularly in the global oil & gas and gaming sectors.  This underlying market strength, together with the recent availability of important new Synectics products and of expanded operations infrastructure to service the Group's planned growth, give us confidence for the future.

 

 

 

 

 

David Coghlan

29 July 2014

 



 

 

Condensed Consolidated Income Statement

For the six months ended 31 May 2014

 


Notes

Unaudited
six months ended
31 May 2014 £000

Unaudited
six months ended
31 May 2013 £000



Year ended
30 Nov 2013 £000

Revenue

3

31,797

40,679

82,363

Cost of sales


(23,436)

(26,981)

(55,664)

Gross profit


8,361

13,698

26,699

Operating expenses


(10,920)

(10,409)

(19,985)

(Loss)/profit from operations





Excluding non-underlying items

3

(2,426)

3,590

7,217

Non-underlying items

4

(133)

(301)

(503)

Total (loss)/profit from operations


(2,559)

3,289

6,714

Finance income


121

121

245

Finance costs


(197)

(150)

(338)

(Loss)/profit before tax





Excluding non-underlying items


(2,502)

3,561

7,124

Non-underlying items

4

(133)

(301)

(503)

Total (loss)/profit before tax


(2,635)

3,260

6,621

Income tax credit/(expense)

5

767

(841)

(1,704)

(Loss)/profit for the period attributable to equity holders of the parent


(1,868)

2,419

4,917

Basic earnings per ordinary share

7

(11.5p)

15.3p

30.9p

Diluted earnings per ordinary share

7

(11.5p)

14.6p

29.4p

Underlying basic earnings per ordinary share

7

(10.8p)

17.1p

34.2p

Underlying diluted earnings per ordinary share

7

(10.8p)

16.3p

32.6p

 

 

 

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 31 May 2014

 




Unaudited
six months ended
31 May 2014 £000

Unaudited
six months ended
31 May 2013
£000



Year ended
30 Nov 2013 £000

(Loss)/profit for the period



(1,868)

2,419

4,917

Items that will not be reclassified subsequently to profit or loss:






Actuarial losses



-

-

(264)

Effect of not recognising the pension scheme surplus



-

-

264




-

-

-

Items that may be reclassified subsequently to profit or loss:






Exchange differences on translation of foreign operations



(130)

(6)

(65)

Available-for-sale financial assets:






-       Gains arising during the period, net of tax



-

403

403

-       Less: reclassification adjustments for gains included in profit, net of tax



-

-

(403)

Total comprehensive income for the period attributable to equity holders of the parent



(1,998)

2,816

4,852

 

 

 

Condensed Consolidated Statement of Financial Position

As at 31 May 2014

 


Notes

Unaudited
31 May 2014 £000

Unaudited
31 May 2013 £000


30 Nov 2013 £000

Non-current assets





Property, plant and equipment


3,623

1,870

2,641

Intangible assets


22,869

21,144

22,672



26,492

23,014

25,313

Current assets





Inventories


10,798

9,815

9,735

Trade and other receivables


32,042

25,464

27,695

Other financial assets


-

525

-

Current tax asset


681

-

-

Cash and cash equivalents


-

5,774



43,521

43,639

43,204

Total assets


70,013

66,653

68,517

Current liabilities





Trade and other payables


(27,107)

(24,764)

(22,569)

Tax liabilities


-

(730)

(1,118)

Current provisions

8

(148)

(18)

(147)

Overdraft and borrowings

9

(2,131)

-



(29,386)

(23,834)

Non-current liabilities





Loans and borrowings


(2,983)

(3,163)

(4,575)

Non-current provisions

8

(85)

(48)

(97)

Deferred tax liabilities


(463)

(469)



(3,531)

(5,141)

Total liabilities


(32,917)

(28,975)

Net assets


37,096

39,542

Equity attributable to equity holders of the Parent Company





Called up share capital


3,559

3,517

3,539

Share premium account


16,043

15,751

15,765

Merger reserve


9,971

9,565

9,971

Other reserves


(2,656)

(2,604)

(2,797)

Currency translation reserve


(3)

186

127

Retained earnings


10,182

12,937

Total equity


37,096

39,542

 

 

 

 

Condensed Consolidated Statement of Changes in Equity

For the six months ended 31 May 2014

 


Called up

share

capital

£000

Share

premium

account

£000

 

Merger

reserve

£000

 

Other

reserves

£000

Currency

translation

reserve

£000

 

Retained

earnings

£000 

 

 

Total

£000

At 1 December 2012

3,514

15,721

9,565

(3,239)

192

9,387

35,140

Profit after tax for the period

-

-

-

-

-

2,419

2,419

Dividends paid

-

-

-

-

-

(831)

(831)

Credit in relation to share-based payments

-

-

-

-

-

43

43

Gains on valuation of available-for-sale financial assets, net of tax

-

-

-

403

-

-

403

Currency translation adjustment

-

-

-

-

(6)

-

(6)

Issue of ordinary shares

3

30

-

-

-

-

33

Share scheme interests realised in the period

-

-

-

232

-

(66)

166

At 31 May 2013

3,517

15,751

9,565

(2,604)

186

10,952

37,367

Profit after tax for the period

-

-

-

-

-

2,498

2,498

Dividends paid

-

-

-

-

-

(505)

(505)

Credit in relation to share-based payments

-

-

-

-

-

35

35

Reclassification adjustment for gains on available-for-sale financial assets included in profit, net of tax

-

-

-

(403)

-

-

(403)

Currency translation adjustment

-

-

-

-

(59)

-

(59)

Issue of ordinary shares

2

14

-

-

-

-

16

Share scheme interests realised in the period

-

-

-

210

-

(43)

167

Acquisition of Coex Services Asia Pte Limited

20

-

406

-

-

-

426

At 30 November 2013

3,539

15,765

9,971

(2,797)

127

12,937

39,542

Loss after tax for the period

-

-

-

-

-

(1,868)

(1,868)

Dividends paid

-

-

-

-

-

(928)

(928)

Credit in relation to share-based payments

-

-

-

-

-

72

72

Currency translation adjustment

-

-

-

-

(130)

-

(130)

Issue of ordinary shares

20

278

-

-

-

-

298

Share scheme interests realised in the period

-

-

-

141

-

(31)

110

At 31 May 2014

3,559

16,043

9,971

(2,656)

(3)

10,182

37,096

 

 

 

  

Condensed Consolidated Cash Flow Statement

For the six months ended 31 May 2014

 


 

 

 

 

 

Unaudited
six months ended
31 May 2014 £000

Unaudited
six months ended
31 May 2013 £000



Year ended
30 Nov 2013 £000

Cash flows from operating activities





(Loss)/profit for the period


(1,868)

2,419

4,917

Income tax (credit)/expense


(767)

841

1,704

Finance income


(121)

(121)

(245)

Finance costs


197

150

338

Depreciation and amortisation charge


726

518

1,187

Profit on disposal of non-current assets


-

-

(16)

Other non-underlying items


-

-

(191)

Share-based payments charge


72

43

78

Operating cash flows before movement in working capital


(1,761)

3,850

7,772

Increase in inventories


(1,063)

(2,613)

(2,533)

(Increase)/decrease in receivables


(4,347)

1,040

(586)

Increase/(decrease) in payables


4,527

1,367

(1,910)

Cash (used in)/generated from operations


(2,644)

3,644

2,743

Interest received


5

3

12

Tax paid


(1,032)

(393)

(731)

Net cash (used in)/from operating activities


(3,671)

3,254

2,024

Cash flows from investing activities





Purchase of property, plant and equipment


(1,353)

(619)

(1,570)

Sale of property, plant and equipment


-

14

15

Acquisition of subsidiaries, net of cash acquired


-

(1,408)

(1,858)

Capitalised development costs


(602)

(332)

(1,008)

Purchased software


(72)

(214)

(335)

Net cash used in investing activities


(2,027)

(2,559)

(4,756)

Cash flows from financing activities





(Decrease)/increase in borrowings


(732)

1,238

2,952

Share scheme interests realised in the year


110

166

333

Issue of shares


298

33

49

Interest paid


(81)

(32)

(105)

Dividends paid


(928)

(831)

(1,336)

Net cash (used in)/from financing activities


(1,333)

574

1,893

Effect of exchange rate changes on cash and cash equivalents


(73)

75

122

Net (decrease)/increase in cash and cash equivalents


(7,104)

1,344

(717)

Cash and cash equivalents at the beginning of the period


5,774

6,491

6,491

Cash and cash equivalents at the end of the period


(1,330)

7,835

5,774

 

Notes

1.       General information

These consolidated interim financial statements were approved by the Board of Directors on 29 July 2014.

2.       Basis of preparation

These consolidated interim financial statements of the Group are for the six months ended 31 May 2014.

The comparative figures for the financial year ended 30 November 2013 are not the Group's statutory accounts for that financial year.  Those statutory accounts have been reported on by the Group's auditors 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 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 2013.

The condensed consolidated interim financial statements for the six months to 31 May 2014 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 2014 have been prepared on the basis of the accounting policies expected to be adopted for the year ending 30 November 2014.  These are anticipated to be consistent with those set out in the Group's latest annual financial statements for the year ended 30 November 2013.  These accounting policies are drawn up in accordance with adopted International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and adopted by the EU.

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

IFRS 8 requires operating segments to be determined based on the Group's internal reporting to the Chief Operating Decision Maker ('CODM').  The CODM has been determined to be the Chief Executive as he is primarily responsible for the allocation of resources to the segments and the assessment of the performance of each of the segments.  Segment information is presented in respect of the Group's strategic operating segments.

The CODM uses underlying operating profit, before Central costs (segment result), as reviewed at Board meetings, as the key measure of the segments' results as it reflects the segments' underlying trading performance for the period under evaluation.  Underlying operating profit is a consistent measure within the Group.

 


Unaudited
six months
ended
31 May 2014
£000

Unaudited
six months
ended
31 May 2013
£000


Year
ended
30 Nov 2013
£000

Revenue




Systems

15,601

22,940

44,753

Integration & Managed Services

16,566

18,075

38,368

Total segmental revenue

32,167

41,015

83,121

Reconciliation to consolidated revenue:




Intra-Group sales

(370)

(336)

(758)


31,797

40,679

82,363


 


3.       Segmental analysis (continued)

 


Unaudited
six months
ended
31 May 2014
£000

Unaudited
six months
ended
31 May 2013
£000


Year
ended
30 Nov 2013
£000

Underlying operating (loss)/profit




Systems

168

3,625

7,009

Integration & Managed Services

(1,415)

1,109

2,223

Total segmental underlying operating (loss)/profit

(1,247)

4,734

9,232

Reconciliation to consolidated underlying operating (loss)/profit:




Central costs

(1,179)

(1,144)

(2,015)


(2,426)

3,590

7,217

 

Underlying operating (loss)/profit from operations is reconciled to total (loss)/profit from operations as follows:


Unaudited
six months
ended
31 May 2014
£000

Unaudited
six months
ended
31 May 2013
£000


Year
ended
30 Nov 2013
£000

Underlying operating (loss)/profit

(2,426)

3,590

7,217

Non-underlying items (note 4)

(133)

(301)

(503)


(2,559)

3,289

6,714

 

4.       Non-underlying items


Unaudited
six months
ended

31 May 2014
£000

Unaudited
six months
ended

31 May 2013
£000


Year

ended

30 Nov 2013
£000

Restructuring costs

-

-

562

Acquisition costs

-

197

265

Share-based payment charge

72

43

78

Amortisation of intangible assets

61

61

123

Reclassification of available-for-sale assets to profit or loss

-

-

(525)


133

301

503

               

5.       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 2014.

 

6.       Dividends

As a result of the loss reported for the first half, the Board does not propose to pay an interim dividend.

 



 

7.       Earnings per share

Earnings per ordinary share are as follows:


Unaudited
six months
ended

31 May 2014
Pence per share

Unaudited
six months
ended

31 May 2013 Pence per share


Year

ended

30 Nov 2013 Pence per share





Basic earnings per share




- Underlying

(10.8)

17.1

34.2

- Basic

(11.5)

15.3

30.9

Diluted earnings per share2




- Underlying

(10.8)

16.3

32.6

- Basic

(11.5)

14.6

29.4





The calculations of basic and underlying earnings per share are based upon:





£000

£000

£000

Earnings for basic and diluted earnings per share

(1,868)

2,419

4,917

Non-underlying items

133

301

503

Impact of non-underlying items on tax charge for the period

(22)

(20)

30

Earnings for underlying basic and underlying diluted earnings per share

(1,757)

2,700

5,450






000

000

000

Weighted average number of ordinary shares - basic calculation

16,268

15,777

15,929

Dilutive potential ordinary shares arising from share options2

-

830

789

Weighted average number of ordinary shares - diluted calculation

16,268

16,607

16,718

 

2 Under IFRS no allowance is made for the dilutive impact of share options which reduce a loss.  The basic and diluted EPS measures are therefore the same for the six months ended 31 May 2014.

 

8.       Provisions


Deferred & contingent consideration £000

 

 

Restructuring £000

Property

£000

Total

 £000

At 1 December 2013

49

126

69

244

Utilised in the period

-

-

(11)

(11)

At 31 May 2014

49

126

58

233


The Group has a number of properties where the Directors believe that dilapidation costs may be incurred or where the property is sublet and the Directors believe that they may not be able to fully recover future rental cost, and therefore appropriate cost provisions have been made.  It is anticipated that the property cost provision carried forward at 31 May 2014 will be utilised within six years.

 

9.       Overdraft and borrowings


Unaudited
six months
ended

31 May 2014
£000

Unaudited
six months
ended

31 May 2013
£000


Year

ended

30 Nov 2013
£000

Overdraft

1,330

-

-

Borrowings

801

-

-


2,131

-

-

 

10.    Copies of this statement will be sent to shareholders and will be available on the Group's website (www.synecticsplc.com) and from Synectics plc, Studley Point, 88 Birmingham Road, Studley, Warwickshire B80 7AS.

- Ends -


This information is provided by RNS
The company news service from the London Stock Exchange
 
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