REG - Synectics PLC - Half-year Report
09/07/2024 07:00
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RNS Number : 5673V Synectics PLC 09 July 2024
9 July 2024
Synectics plc
('Synectics', the 'Company' or the 'Group')
Interim results for the six months ended 31 May 2024
Strong H1 performance built on a solid order book and early delivery of
several projects
Synectics plc (AIM: SNX), a leader in advanced security and surveillance
systems, reports its unaudited interim results for the six months ended 31 May
2024 ("H1 2024" or the "Period").
Financial highlights
· H1 2024 revenue increased 20% to £26.3 million (H1 2023: £21.9
million)
· Underlying operating profit(1) increased by 183% to £2.2 million (H1
2023: £0.8 million)
· Underlying EBITDA(2) up 67% to £2.8 million (H1 2023: £1.7 million)
· Underlying earnings per share(3) up 170% to 10.0p (H1 2023: 3.7p)
· Net cash at 31 May 2024 of £6.4 million with no bank debt(4) (31 May
2023: £4.0 million)
· Order book at 31 May 2024 of £30.2 million (31 May 2023: £28.4
million)
· Interim dividend re-instated at 2.0p per share (H1 2023: nil)
(1) Underlying operating profit represents profit before tax, finance costs
and non-underlying items; see note 4 of the financial statements.
(2) Underlying EBITDA represents profit before finance costs, tax,
depreciation, amortisation and non-underlying items.
(3) Underlying earnings per share are based on underlying profit after tax but
before non-underlying items.
(4) Excluding IFRS 16 lease liabilities.
Operational highlights
· Strong results bolstered by the early delivery of several projects by
the Systems division
· Board expects financial performance in FY 2024 to be more evenly
weighted than in prior years and comfortably in line with market expectations*
· Core specialist markets continue to show momentum, with all sectors
seeing investment in new projects alongside the renewal of existing systems
· Strong order book and robust pipeline of new opportunities support
confidence for further progress in the medium-term
· Continued investment in technology maintains the Company's position
as the go-to provider in key markets
· Appointment in late April 2024 of Bob Holt OBE as Non-Executive Chair
strengthened the Board
Post-Period events
· Significant US$10 million contract for high-profile Asian gaming
resort announced in June 2024, expected to be delivered in FY 2025, supports
market expectations for FY 2025
· Appointment on 1 July 2024 of Jon Kempster as independent
Non-Executive Director and Chair of Audit Committee, further strengthening the
Board
Commenting on the results, Paul Webb, Chief Executive of Synectics, said:
"We're delighted to have delivered a strong H1 2024 performance, driven by our
Systems division completing delivery of several projects ahead of schedule.
Our robust order book and promising pipeline of new business opportunities,
coupled with our reputation as a trusted partner, ideally position us to
capitalise on exciting opportunities across our growing specialist end
markets.
Against this positive backdrop, the Board remains confident in meeting market
expectations for FY 2024* and the Company's longer-term prospects."
*Analyst consensus immediately before this announcement for the year ending 30
November 2024 was revenue of £52.9 million and adjusted PBT of £3.5 million.
For further information, please contact:
Synectics plc Tel: +44 (0) 114 280 2828
Paul Webb, Chief Executive Officer
Amanda Larnder, Chief Financial Officer
info@synecticsplc.com
Shore Capital Tel: +44 (0) 20 7408 4090
Tom Griffiths / David Coaten / Rachel Goldstein
Vigo Consulting Tel: +44 (0) 20 7390 0230
Jeremy Garcia / Fiona Hetherington / Aisling Fitzgerald
synectics@vigoconsulting.com
Investor Presentation
The Company will be holding a live presentation of its H1 2024 results via the
Investor Meet Company platform on Monday 15 July 2024 at 11.00 a.m.
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via the Investor Meet Company dashboard up until
9.00 a.m. the day before the meeting or at any time during the live
presentation.
Investors can sign up for free and register to meet Synectics via:
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About Synectics
Synectics plc (AIM: SNX) is a leader in advanced security and surveillance
systems that help protect people, property, communities, and assets around the
world.
The Company's expertise is in providing solutions for specific markets where
security and surveillance are critical to operations. These include gaming,
oil and gas, public space, transport, and critical infrastructure.
Synectics has deep industry experience in these markets and works closely with
customers globally to deliver solutions that are tailored to meet their needs.
Technical excellence, combined with decades of experience and long-standing
customer relationships, provides fundamental differentiation from mainstream
suppliers and makes the Company a stand-out in its field.
Find out more at www.synecticsplc.com
(https://url.avanan.click/v2/___http:/www.synecticsplc.com___.YXAxZTpzaG9yZWNhcDphOm86OTc4YTc4Nzk4NGI2ODc3OTc4OWMxOWJjZTk2NzBmOTg6Njo3OTNkOjE2NGFjMDVmMTU0MTUyYWFkYzBhNjIzYmRjNzMxNDM5ZWJjZWE5NzhkNThjZWU5NGI1MGZkODIyMWYxZWYxMjU6cDpU)
Chief Executive Officer's Statement
Introduction
Synectics specialises in delivering tailored security and surveillance
solutions to a high-profile, global customer base, operating in environments
that are often both technically and logistically demanding.
Its proprietary software, Synergy, manages and records over 250,000 channels
across 270 locations worldwide, including high-security environments such as
casinos, town and city centres, stadiums, tourist attractions and critical
infrastructure sites.
In the global oil and gas market Synectics has over 10,000 specialist COEX
camera stations safeguarding refineries, pipelines, offshore vessels, and
platforms for industry giants including Saudi Aramco and Shell.
The Company also delivers market-leading solutions to major national and
international transport providers, safeguarding over five billion passenger
journeys each year.
Synectics' unwavering commitment to innovation and excellence ensures that it
remains at the forefront of the security and surveillance industry, providing
unmatched capability and expertise to its customers.
Financial summary
The Company's robust performance in H1 2024 was built on a strong opening
order book and as a result of the early delivery of several high-margin
projects by the Systems division.
In H1 2024, revenues increased by 20% to £26.3 million (H1 2023: £21.9
million), resulting in a significant uplift in underlying operating profit to
£2.2 million (H1 2023: £0.8 million).
Gross profit increased by 23% to £11.2 million compared to H1 2023 due to
higher revenues and continued strong gross margins within both divisions, with
underlying EBITDA up 67% to £2.8 million.
The increase in operating costs by 8% was as expected and was more than offset
by the increase in gross profit, resulting in underlying profit before tax of
£2.1 million, up from £0.7 million in H1 2023.
After taxation and excluding non-underlying items, earnings per share(3) were
10.0 pence (H1 2023: 3.7 pence).
The Company ended the Period with an increased order book, standing at £30.2
million (31 May 2023: £28.4 million; 30 November 2023: £29.2 million) with
strong order intake across all key markets.
As at 31 May 2024, the Company had cash of £6.4 million (31 May 2023: £4.0
million), an increase of £1.8 million from £4.6 million at 30 November 2023.
(3) Underlying earnings per share are based on underlying profit after tax but
before non-underlying items.
Dividend
In light of Synectics' substantially improved profitability and strong cash
position, the Board has declared a re-instated interim dividend of 2.0p per
share to be paid on 23 August 2024 to shareholders on the register at 26 July
2024. This will be the Company's first interim dividend to be paid since 2019.
Business review
The Company has continued its solid momentum from the prior year, delivering
strong results in H1 2024, as well as securing significant additional business
for H2 2024 and beyond.
As a result of the aforementioned early delivery of several projects by the
Systems division in H1 2024, the Board expects that the Company will deliver a
more evenly weighted financial performance in FY 2024 than previously expected
and as in prior years.
Due to the strong performance in H1 2024, the Board is confident that the
Company remains comfortably in line with market expectations for FY 2024*.
The Company has started the second half of the year with a robust order book
and, thanks to the early delivery of several projects in H1 2024, increased
capacity for additional projects in H2 2024.
The Company will continue to focus on converting new business opportunities,
ensuring consistent and sustained growth through:
· leveraging expertise in its core specialist markets;
· recruiting, developing and retaining talent;
· investing in new technology and product development;
· extending partnerships in each market and geography; and
· building on long-standing customer relationships.
Synectics relies on close collaboration with its channel partners and systems
integrators to develop its pipeline of new business opportunities. These key
partners are critical to Synectics, and the Company recognises the importance
of developing and extending these partnerships, as well as building on
long-standing relationships with its end customers.
*Analyst consensus immediately before this announcement for the year ending 30
November 2024 was revenue of £52.9 million and adjusted PBT of £3.5 million.
Divisional Review
Synectics' Systems division develops and delivers its proprietary,
technology-led solutions to specialist markets globally - including gaming,
oil and gas, public space, transport and critical infrastructure - through
local systems integrators and channel partners. Capabilities centre around its
Synergy software platform, with solutions tailored to the unique requirements
of each customer, as well as specialist hardware for oil and gas markets built
on the COEX camera range.
Synectics' Security division delivers integrated solutions, service and
support directly to end-users in the UK and Ireland - principally within
public space, transport, and national infrastructure - utilising a combination
of the Group's proprietary technology and third-party products.
Systems division
Synectics' Systems division delivered a strong performance during the Period,
underpinned by a strong opening order book and supported by the early delivery
of several projects. Gross margins remained very strong, and order intake was
very healthy.
At the start of FY 2024, the Company refocused its attention on business
development and restructured the team to ensure it was best placed to
capitalise on market opportunities. This renewed focus is bearing fruit in
both our existing core markets, and into adjacent sectors.
H1 2024 H1 2023
Revenues - EMEA £9.7m £6.8m
Revenues - North America £2.7m £2.2m
Revenues - Asia Pacific £5.0m £4.8m
Total revenue £17.4m £13.8m
Gross margin 48.4% 49.4%
Operating profit £2.9m £1.4m
Operating margin 16.7% 9.9%
( )
The Company saw sustained demand in the Period from the oil and gas sector.
Key contracts delivered included a further part of the £5.5m contract for
Zuluf, awarded in April 2023, along with projects for leading operators,
including Saudi Aramco, Shell and MODEC.
Synectics typically has good visibility of new business in the oil and gas
market, and with sustained high activity being seen in this sector, is well
positioned to capitalise on upcoming opportunities in this year and beyond.
In the gaming sector, the Company previously noted weak demand and delays in
North America, with operators postponing investment in new properties and the
refurbishment of large casinos.
However, in April 2024 the Company announced that it had secured new contracts
in the region with both existing and new customers. These included a $1
million contract with Delta Bingo which, implementing the Company's Synergy
software platform across 17 smaller sites, represents a different profile of
gaming customer for Synectics with the potential to lead to similar
opportunities in the medium term.
The Company continues to see good momentum with further contract awards in May
and expects this to continue in the second half.
Gaming revenues in Asia-Pacific in the Period were sound, driven primarily by
refurbishments and service contracts with existing customers.
Post-Period end, on 18 June 2024, Synectics announced that it had secured a
US$10 million contract to upgrade and expand its Synergy system at a major
gaming resort in South-East Asia, one of the most successful and highest
profile gaming resorts in the world. Delivery is anticipated to commence late
in FY 2024 with completion expected by the end of FY 2025.
The Board believes the momentum seen in the gaming sector reflects the
continued recovery of the market and, as momentum builds, is confident that
Synectics' reputation, extensive global footprint, and market leading product
offering ensure it is well placed to be awarded further projects when
investment decisions are made.
The Company continues to make progress in deploying Synergy into critical
national infrastructure in the UK, and in April 2024 announced it had been
awarded a £0.8 million contract with a new customer - a major UK utility
provider - to deliver a multi-site deployment of Synergy.
Despite ongoing challenges in public space, largely driven by customers'
budgetary constraints, the Company successfully signed contracts with two
London boroughs for the deployment of its Synergy software.
Synectics continues to explore opportunities to expand its reach into
adjacent, complementary sectors. In the Period, it secured contracts to deploy
Synergy in two further NHS Trusts and has a robust pipeline of opportunities
going forward.
Whilst the core public space market remains challenging, the Company now
boasts an established footprint into national infrastructure projects and has
already seen success in actively developing adjacent markets.
Security division
Synectics' Security division delivered a sound performance in the Period,
securing and delivering numerous projects for public space, critical
infrastructure, and public transport customers. Results show a pleasing
improvement versus the comparative period last year, with solid gross margins
and strong order intake.
H1 2024 H1 2023
Revenue £9.7m £8.7m
Gross margin 28.5% 26.2%
Operating profit £0.7m £0.4m
Operating margin 6.7% 4.9%
( )
In January 2024, Synectics announced the award of additional contracts for
National Grid worth £4.0 million, much of which is expected to be delivered
in H2 2024. The Company was awarded its first contract under a framework
agreement in October 2022, and these contracts will result in Synectics
deploying its services into 20 sites across National Grid's estate. The
Company continues to work with National Grid and is seeking to further extend
its market share to deliver security and surveillance solutions to more
national infrastructure sites.
Momentum continued in the transport sector, with good traction from customers
including bus operators Stagecoach and NTA for the provision of on-vehicle
surveillance technologies. There is the potential for further deployment of
the Group's innovative new cloud services into the transport sector,
benefitting all customers, irrespective of future fleet size.
Synectics' work with police forces, including the City of London and West
Midlands, continues, and it is in discussions with other forces in the UK
regarding the potential deployment of its solutions.
Despite well-publicised budget constraints for local authorities and the delay
of some decisions ahead of the upcoming UK elections, there has been sustained
interest from UK local authorities for Synectics' solutions, and the Company
has successfully deployed system upgrades for several local authorities in the
Period, as well as continuing to provide support to many more. Furthermore,
the Group continues to serve adjacent sectors, including venues, stadia and
tourist attractions, with upgrades delivered to the Queen Elizabeth Olympic
Park amongst others during the Period.
As mentioned previously, work is progressing well on re-focusing this
division, with a refreshed go-to-market strategy to be launched in the Autumn.
Technology
With technology central to its offering, the Company continues to invest in
its development and in evolving its solutions to continually meet its
customers' needs and demands.
In April 2024, Synectics announced the latest version of its Synergy software
platform, which was launched with improved tools for incident management and
team collaboration, a new mobile app, simplified web-based system access, and
remote camera sharing - among the latest additions.
Synergy is built on an open architecture which enables Synectics to integrate
leading third-party technologies including AI and analytics to enhance the
overall proposition. Furthermore, the platform can evolve swiftly to
accommodate and integrate new technology developments as they emerge, to
ensure it always remains a leading solution for customers - which is critical
to the retention of many long-term customers.
Synectics' product development team continues to focus on software platform
enhancements alongside further developments to its COEX camera station
portfolio for oil and gas customers.
Current areas of focus include:
· delivering AI and analytics natively and with third party tools,
including video forensic search;
· extending the mobile application, and enhanced web features along
with expanded cloud services; and
· enhancing camera performance, including 4K resolution and embedded AI
analytics.
In H1 2024, Synectics spent £1.8 million on technology development (H1 2023:
£1.6 million). Of this, £0.6 million was capitalised (H1 2023: £0.4
million), and the remainder was expensed to the income statement. £0.2
million of previously capitalised development cost was amortised in the Period
(H1 2023: £0.4 million). These figures are included in the results of the
Systems division set out above.
Board
In April 2024, the Company announced the appointment of Bob Holt OBE as
Non-Executive Chair with effect from the conclusion of the Company's Annual
General Meeting. Bob has over 35 years' experience in senior leadership roles,
including as Chair of Mears Group PLC, which he led through a successful IPO
on AIM and had a central role in establishing it as a market leader in its
sector. Synectics looks forward to leveraging his experience to help the
Company achieve its long-term potential.
Steve Coggins, who served as Interim Non-Executive Chair from October 2023,
retired from the Board at the conclusion of the Company's Annual General
Meeting. He was a Non-Executive Director of Synectics for almost twenty years,
and the Company thanks him wholeheartedly for his significant contributions
and commitment.
As announced on 21 June 2024, the Board has been strengthened further by the
appointment of Jonathan "Jon" Kempster as an independent Non-Executive
Director and chair of the Audit Committee. Jon, who has more than 20 years'
experience as a public company director, is currently a Non-Executive Director
of AIM quoted Norman Broadbent plc and Serinus Energy plc, and a Director of
Delta Pension Nominees Limited.
In June 2024, Non-Executive Director, Dr Alison Vincent, was awarded a CBE in
the King's Birthday Honours List in recognition of her dedication and services
to Engineering and Technology.
Outlook
The Board is pleased to report continued progress and momentum in the
Company's performance, laying solid foundations for future growth.
Our key operating segments still have significant growth potential, and we are
simultaneously exploring adjacent markets where the benefits of our software
and expertise are valued, thereby building on our position as the go-to
provider of security and surveillance systems for specialist applications.
In addition, the Company's strong cash position enables the funding of
internal investment plans which support its strategic objective to achieve
further sustainable growth and gives the Board the confidence to reinstate the
declaration of an interim dividend, the first such since 2019.
The success of Synectics is dependent on our incredible team. Their dedication
and commitment to delivering cutting edge technology to our customers drives
the business forward. On behalf of the Board, I would like to thank every
member of the team for their invaluable contributions to the Company's
continued success.
The Company continues to see strong order intake and sales momentum, further
underpinning the Board's confidence in the outlook for FY 2024 and beyond.
Paul Webb
Chief Executive Officer
8 July 2024
Consolidated income statement
For the six months ended 31 May 2024
Unaudited six months ended 31 May 2024 Unaudited six months ended 31 May 2023
Underlying Non- underlying items (note 4) Total Underlying Non- underlying items Total
(note 4)
Notes £'000 £'000 £000 £'000 £'000 £'000
Revenue 3 26,272 - 26,272 21,851 - 21,851
Cost of sales (15,095) - (15,095) (12,736) - (12,736)
Gross profit 11,177 - 11,177 9,115 - 9,115
Operating expenses (9,015) (335) (9,350) (8,351) (87) (8,438)
Operating profit 2,162 (335) 1,827 764 (87) 677
Finance costs (57) - (57) (46) - (46)
Profit before tax 2,105 (335) 1,770 718 (87) 631
Income tax expense 5 (412) 59 (353) (86) 20 (66)
Profit for the period attributable to equity holders of the Parent 1,693 (276) 1,417 632 (67) 565
Earnings per share 7
Basic 8.4p 3.3p
Diluted 8.4p 3.3p
Consolidated statement of comprehensive income
For the six months ended 31 May 2024
Unaudited Unaudited
six months six months
ended ended
31 May 2024 31 May 2023
£000 £000
Profit for the period 1,417 565
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations (6) (8)
Losses on a hedge of a net investment taken to equity (42) (13)
(48) (21)
Total comprehensive income for the period attributable to equity holders of 1,369 544
the
Parent
Consolidated statement of financial position
As at 31 May 2024
Unaudited Unaudited 30 Nov
31 May 2024 31 May 2023 2023
£000 £000 £000
Non-current assets
Property, plant and equipment 3,508 4,359 3,739
Goodwill and intangible assets 21,473 20,801 21,128
Deferred tax assets 1,966 2,660 2,262
26,947 27,820 27,129
Current assets
Inventories 5,906 4,345 5,069
Trade and other receivables 10,794 9,688 13,868
Contract assets 8,078 6,917 6,954
Tax assets - 5 -
Cash and cash equivalents 6,414 3,996 4,604
31,192 24,951 30,495
Total assets 58,139 52,771 57,624
Current liabilities
Trade and other payables (11,037) (7,861) (11,270)
Contract liabilities (3,327) (2,477) (3,033)
Lease liabilities (571) (683) (573)
Tax liabilities (185) - (90)
Provisions (303) (783) (606)
(15,423) (11,804) (15,572)
Non-current liabilities
Provisions (887) (752) (794)
Lease liabilities (1,037) (1,901) (1,365)
Deferred tax liabilities (1,009) (1,072) (1,016)
(2,933) (3,725) (3,175)
Total liabilities (18,356) (15,529) (18,747)
Net assets 39,783 37,242 38,877
Equity attributable to equity holders of the Parent
Called up share capital 3,559 3,559 3,559
Share premium account 16,043 16,043 16,043
Merger reserve 9,971 9,971 9,971
Other reserves (1,436) (1,436) (1,436)
Currency translation reserve 864 919 912
Retained earnings 10,782 8,186 9,828
Total equity 39,783 37,242 38,877
Consolidated statement of changes in equity
For the six months ended 31 May 2024
Called up Share Currency
share premium Merger Other translation Retained Total
capital account reserve reserves reserve earnings £000
£000 £000 £000 £000 £000 £000
At 1 December 2022 3,559 16,043 9,971 (1,436) 940 7,925 37,002
Profit for the period - - - - - 565 565
Other comprehensive income
Currency translation adjustment - - - - (21) - (21)
Total other comprehensive income - - - - (21) - (21)
Total comprehensive income - - - - (21) 565 544
Dividends paid - - - - - (338) (338)
Credit in relation to share-based payments - - - - - 34 34
At 31 May 2023 3,559 16,043 9,971 (1,436) 919 8,186 37,242
Profit for the period - - - - - 1,598 1,598
Other comprehensive income
Currency translation adjustment - - - - (7) - (7)
Total other comprehensive income - - - - (7) - (7)
Total comprehensive income - - - - (7) 1,598 1,591
Credit in relation to share-based payments - - - - - 44 44
At 30 November 2023 3,559 16,043 9,971 (1,436) 912 9,828 38,877
Profit for the period - - - - - 1,417 1,417
Other comprehensive income
Currency translation adjustment - - - - (48) - (48)
Total other comprehensive income - - - - (48) - (48)
Total comprehensive income - - - - (48) 1,417 1,369
Dividends paid - - - - - (507) (507)
Credit in relation to share-based payments - - - - - 44 44
At 31 May 2024 3,559 16,043 9,971 (1,436) 864 10,782 39,783
Consolidated cash flow statement
For the six months ended 31 May 2024
Unaudited Unaudited
six months six months
ended ended
31 May 2024 31 May 2023
£000 £000
Cash flows from operating activities
Profit for the period 1,417 565
Income tax expense 353 66
Finance costs 57 46
Depreciation and amortisation charge 643 917
Net foreign exchange differences 134 156
Non-underlying items 335 87
Cash flow on non-underlying items (235) (87)
Inventory write down 121 -
Net movement in provisions (209) 4
Share-based payment charge 44 34
Operating cash flows before movement in working capital 2,660 1,788
Increase in inventories (961) (126)
Decrease / (increase) in trade, other and contract receivables 1,809 (1,302)
Increase in trade, other and contract payables 94 420
Cash generated from operations 3,602 780
Tax received 28 418
Net cash from operating activities 3,630 1,198
Cash flows from investing activities
Purchase of property, plant and equipment (224) (146)
Capitalised development costs (555) (430)
Purchased software (2) (11)
Net cash used in investing activities (781) (587)
Cash flows from financing activities
Lease payments (361) (431)
Interest paid (19) -
Dividends paid (507) (338)
Net cash used in financing activities (887) (769)
Net increase / (decrease) in cash and cash equivalents 1,962 (158)
Effect of exchange rate changes on cash (152) (102)
Cash and cash equivalents at the beginning of the period 4,604 4,256
Cash and cash equivalents at the end of the period 6,414 3,996
Notes
For the six months ended 31 May 2024
1 General information
These condensed consolidated interim financial statements were approved by the
Board of Directors on 8 July 2024.
2 Basis of preparation
These consolidated interim financial statements of the Group are for the six
months ended 31 May 2024.
These interim financial statements do not include all the information and
disclosures normally included in the annual financial statements. Accordingly,
these interim financial statements should be read in conjunction with the
Group's annual financial statements for the year ended 30 November 2023.
These interim financial statements for the six months to 31 May 2024 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 have been prepared on
the basis of the accounting policies expected to be adopted by the Group for
the year ending 30 November 2024. The Group did not have to change its
accounting policies as a result of adopting new standards.
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
Revenue by operating segment
Unaudited Unaudited
six months six months
ended ended
31 May 2024 31 May 2023
£000 £000
Systems 17,378 13,846
Security 9,718 8,676
Total segmental revenue 27,096 22,522
Reconciliation to consolidated revenue:
Intra-Group sales (824) (671)
26,272 21,851
Underlying operating result by operating segment
Unaudited Unaudited
six months six months
ended ended
31 May 2024 31 May 2023
£000 £000
Systems 2,897 1,367
Security 650 429
Total segmental underlying operating profit 3,547 1,796
Reconciliation to consolidated underlying operating profit:
Central costs (1,385) (1,032)
2,162 764
Underlying operating profit is reconciled to total operating profit as
follows:
Unaudited Unaudited
six months six months
ended ended
31 May 2024 31 May 2023
£000 £000
Underlying operating profit 2,162 764
Non-underlying items (335) (87)
1,827 677
4 Non-underlying items
Unaudited Unaudited
six months six months
ended ended
31 May 2024 31 May 2023
£000 £000
Costs associated with restructuring and transformation 235 -
Write-off of deferred consideration 100 -
Costs associated with legal matters - 42
Costs associated with the buy-out of the defined benefit pension scheme - 45
335 87
As at 30 November 2022, a deferred consideration asset was recognised in
relation to the contingent consideration payable on the sale of SSS Management
Services Ltd ('SSS'). The consideration was contingent on certain performance
criteria of SSS in the twelve months following the sale, which have not been
met. Therefore, the consideration will no longer be received, and the asset
has been written off.
5 Taxation
The tax expense of £353,000 (2023: £66,000) for the Period is based on the
estimated rate of corporation tax that is likely to be effective for the year
ending 30 November 2024.
6 Dividends
An interim dividend of 2.0p per share, totalling approximately £338,000
(2023: £nil) will be paid on 23 August 2024 to shareholders on the register
at 26 July 2024.
7 Earnings per share
Earnings per share are as follows:
Unaudited Unaudited
six months six months
ended ended
31 May 2024 31 May 2023
Pence per share Pence per share
Basic earnings per share 8.4 3.3
Diluted earnings per share 8.4 3.3
Underlying basic earnings per share 10.0 3.7
Underlying diluted earnings per share 10.0 3.7
The calculations of basic and underlying earnings per share are based upon:
Unaudited Unaudited
six months six months
ended ended
31 May 2024 31 May 2023
£000 £000
Earnings for basic and diluted earnings per share 1,417 565
Non-underlying items 335 87
Tax thereon (59) (20)
Earnings for underlying basic and diluted earnings per share 1,693 632
Unaudited Unaudited
six months six months
ended ended
31 May 2024 31 May 2023
000 000
Weighted average number of ordinary shares - basic calculation 16,889 16,889
Dilutive potential ordinary shares arising from share options 23 1
Weighted average number of ordinary shares - diluted calculation 16,912 16,890
8 Availability of results
Copies of this statement are available on the Group's website
(www.synecticsplc.com) and will be available shortly from Synectics plc,
Synectics House, 3-4 Broadfield Close, Sheffield, England S8 0XN.
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