In a Tuesday update, Synectics Plc cautioned that it anticipated worse results in the second half ending November 30, citing Covid-19’s economic consequences. The business listed in London , United Kingdom, is a security and surveillance technology supplier to land-based casino resorts, including Asia-Pacific venues.
The pandemic had “continued to impact activity across all the markets of Synectics,” but had “particularly affected its largest market sector, global casinos and gaming, where the recovery in the second half of the company’s financial year is now unlikely to take place as previously expected,” said the firm.
In its interim figures for the six months to 31 May, released on 14 July, Synectics reported that it expected ‘a significantly improved underlying trading outcome in the second half.’
The company posted a loss of just over GBP1.8 million ( US$ 2.3 million) in the fiscal first half, compared to a marginally higher profit of GBP1.0 million in the same reporting period a year ago.
Revenue decreased by 31.4 percent year-on-year, to GBP23.0 million, from almost GBP33.6 million, for the six months ended May 31 , 2020.
In its Tuesday lookahead for the second half, the company said it “had expected that easing of travel restrictions and the reopening in early summer of casinos in the U.S. and Asia would result in some [business] recovery during the second half of this year.”
However, it added: “However, it has become increasingly evident that the vast majority of planned surveillance system projects and upgrades in this sector will now be delayed beyond 2020.”
Synectics said that in order to minimise costs, an initiative flagged in its interim results, either closing or scaling down several operating sites in its integration and managed services division, was progressing as expected.
The group reported that its net cash balance as of 31 August was GBP7.3 million , compared to GBP4.6 million as of 31 May, and that it had GBP5 million in additional undrawn bank facilities.
The rise in cash retained resulted, according to the group,”“largely from lower working capital needed to support reduced revenues, a position that will unwind, at least in part, as revenues recover to more normal levels”, said the firm.
Synectics’ chief executive Paul Webb, as quoted in the update, said: “We remain confident in our long-term growth prospects as our software and technology capabilities continue to open up new opportunities in evolving markets for our security and surveillance technology.”
On September 16, during the” Safety and Security “segment of the Global Gaming Expo (G2E) Asia Online Conference 2020, moderated by GGRAsia, Dave Dalleske, vice president of sales for Asia Pacific at Synectics, was one of the panellists.
In 2015, Synectics opened a Macau office, which it said at the time was to help its catering efforts for the growth of the casino sector in the Asia-Pacific region.