Good morning! For anyone who missed it, my latest podcast was published last night, being an interview with a corporate financier and accomplished private investor, Edward Roskill. Some very interesting insights & stock ideas from Edward. The file can be downloaded into iTunes using the "iTunes" button on AudioBoom, and it's very much a leisurely chat format, so best left for when time is not rushed.

Now let's have a look at today's results & trading statements, and I see that another profit warning has been issued today from CCTV company Synectics - there seems to be at least one profit warning every day at the moment, which does make you wonder about the outlook for earnings generally.


Synectics (LON:SNX)

Share price: 220p (down 29% on the day)
No. shares: 17.8m
Market Cap: £38.3m

I warned readers in my report of 29 Jul 2014 that the interim results from this CCTV security company didn't look right - in particular reported debtors were far too high (which can indicate problems to come - e.g. sales being booked aggressively to hide poor performance, and subsequently having to be reversed out when the cash can't be collected). Also I felt that creditors looked stretched, and the company had lurched from net cash into net debt, raising possible solvency issues.

If the figures don't look right, then don't invest - is my mantra these days. It's enabled me to side-step a lot of problem companies. Excessive debtors is probably the biggest red flag there is, and it's nearly always a precursor of serious trouble, in my experience. Sure enough, that has turned out to be the case here, it just took three months for the bad news to come out.

Profit warning - today sees the company's third profit warning this year, key points are below;

Synectics has been experiencing continued delays both in the award of large expected contracts and from the extension by customers of delivery periods for contracts already won. These issues are primarily affecting the Oil & Gas market sector.

Interesting to note that the problems are mainly in one sector. So time to review my portfolio again, to check whether any companies have exposure to the oil & gas sector, as capex is clearly being sharply reduced there. Thankfully it's a sector I generally avoid altogether, as it's too unpredictable.

The company also mentions…

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