CORRECT: Synectics shares fall as half-year revenue drops

(Correcting spelling of company's Chief Executive Officer Amanda Larnder.)

Synectics PLC on Tuesday reported a weaker first-half performance, as expected, as it continued to implement its transformation strategy aimed at driving future growth.

The Sheffield, England-based provider of advanced security and surveillance systems said revenue for the six months to May 31 fell 37% to £22.2 million from £35.5 million a year earlier.

It swung to a pretax loss of £443,000, from profit of £3.0 million, while adjusted earnings before interest, tax, depreciation and amortisation declined to £1.0 million from £4.2 million.

The company said the weaker yearly performance was expected, reflecting a £7.8 million non-recurring gaming contract payment received a year prior.

Synectics retained its interim dividend at 2.2 pence per share.

The company said its energy business continued to be affected by uncertainty over the timing and sequencing of projects, amid the conflict in the Middle East.

Synectics said its full-year adjusted Ebitda guidance is between £3.7 million and £4.1 million, the upper end being the current market expectation. The outlook is dependent in part on the timing of energy-sector sales.

The company said its new strategy is focused on expanding its share of an addressable market of around £2 billion and is intended to underpin accelerated growth from financial 2027 onwards. The strategy includes a greater focus on proprietary software, AI-enabled operational intelligence, recurring revenues and a more product- and partner-led business model.

Chief Executive Officer Amanda Larnder said: "During the period we made good initial progress against our strategy while securing important new business in transport, leisure and hospitality, critical national infrastructure and energy. This included a number of new customer wins, demonstrating the continued demand for our intelligent security and surveillance solutions across our markets and our ability to win new customers alongside expanding existing relationships."

Separately, Synectics announced changes to its board, with Jon Kempster appointed interim chair and Peter Kear appointed senior independent non-executive director with immediate effect. Bob Holt is stepping down as chair, while Andrew Lockwood is leaving the board as a non-executive director.

Synectics said Holt's departure, announced in May, reflected his "increasing commitments" to Cheltenham-based energy services company Earnz PLC, where he is a significant shareholder.

Larnder said Kempster's appointment as interim chair provides "important continuity" as the company continues to execute its strategy.

Synectics shares dropped 13% to 180.20 pence on Tuesday morning in London.

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