Synectics; Update 24/07/13. Interim results

1st Mar '13 by johnrosier

2 comments 4313 reads

Synectics (364p and 2.1% of JIC portfolio); Following on from Wednesdays results Synectics has announced a £7m contract win in Singapore. It is for the first phase of a design and delivery fully integrated surveillance recording and control room for a large corporate client. The company expects further follow on work once this initial contract is completed during the current financial year.

Conclusion: This is a decent sized contract in the context of Synectics' full year turnover in 2012 of £77m. The shares are valued at 12.5x 2013 earnings for 15% growth. Looks good value to me. Happy Holder!

www.JohnsInvestmentChronicle.com

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About the Author

Johnrosier

Premium Member

I manage my subscription website www.JohnsInvestmentChronicle.com in which I show my portfolio and all transactions. I blog within an hour of trading, with an explanation, and send an alert email to all my subscribers. I do not pretend to have all the answers but I hope my portfolio, and the trades, provides food for thought as well as helping those who are new to managing their own portfolios.I think what I do is unique. There are plenty of tipsters out there who will remind you of the good ones and quietly forget the duffers; I do not have that luxury as the portfolio is there for all to see. I have to confront my mistakes and deal with them. A tipster also does not show how a tip fits into the context of an overall portfolio. My portfolio of up to 30 holdings has different holding sizes based on my conviction behind the stock and its risk. I set up www.JohnsInvestmentChronicle.com in January 2012. Prior to that :In September 1984, I left university with a degree in Zoology and started work in the City of London. Over the next twenty five years most of my time was spent managing UK equity portfolios with Fleming Investment Management and Henderson Global Investors, for company and local authority pension schemes as well as the reserve fund for a well known charity. During 2009 I left full time employment and decided to take time out to consider the next stage of my career. In the meantime I have been putting my years of experience to good use investing the family savings. I have thoroughly enjoyed the freedom of investing from home and despite some tricky periods during 2011 it has been a rewarding experience. more »

2 comments

johnrosier

1st May '13

Synectics (446p and 2.4% of JIC) issued a brief trading statement this morning in which it says "Overall trading across the Group remains satisfactory, and gives the Board confidence that results for the year will be in line with market expectations."

Conclusion; Synectics was one of the best performing stocks in the portfolio during April, up some 14%. The shares are now valued at 14.6x Consensus forecasts for November 2013, 11.6x November 2014 for 26% growth and 9.8x November 2015 for 19% growth. In the short term, given the recent surge in the share price I would expect it to pause for breath. Further out, given the forecast growth I think there is scope for a further re-rating of the shares. Happy Holder!

johnrosier

24th Jul '13

Synectics (420p and 2.4% of JIC) Interim results for the 6 months ended 31st May look pretty good. Revenue is up 6% to £40.7m, underlying profits are up 27% to £3.6m, underlying eps are up 28% to 16.3p and operating margin increased to 8.8% from 7.4%. The interim dividend has been increased by 20% to 3p per share.

Results were driven by buoyant conditions in the Middle and Far East, which compensated for the “relatively subdued” US and Europe. Cash generation was strong with free cash of £2.7m leading to a net cash position at 31st May of £4.7m, compared to £2.7m a year ago.

The outlook statement was pretty upbeat although also tinged with a note of caution; “Current indications are that Synectics will produce a further strong performance in the second half. There are risks to be overcome, notably to deliver on time one of the largest and most technically challenging systems in the Group's history and, more generally, to convert to firm orders the planned proportion of our new business pipeline in market environments where the timing of orders remains difficult to predict.”

Conclusion: On consensus forecasts it is valued at 12.7x November 2013, falling to 10.8x November 2104 for 17% growth. It continues to look good value to me. Happy Holder!

www.JohnsInvestmentChronicle.com

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Synectics; Update 24/07/13. Interim results

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Johnrosier

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