Synectics reported a drop in first-half revenue and profit, though the decline was largely expected and masked improving margins and progress on a wider strategic overhaul.
Revenue at the security and surveillance group dropped 37% to £22.2m in the six months to 31 May, with adjusted EBITDA down to £1.0m from £4.2m, tipping it to a small adjusted loss per share.
Two factors drove the fall: the absence of a large, one-off gaming contract worth £7.8m that had boosted the same period last year, and delays to energy-sector orders caused by the conflict in the Middle East.
There were, however, some signs of encouragement.
Gross margin rose seven percentage points to 48%, helped by a better product mix, tighter operations and the completion of lower-margin work.
In addition, the group held net cash of £10.5m with no bank debt and maintained its interim dividend at 2.2p.
New wins in the period included a £1.5m contract with Stagecoach and a traffic-monitoring order with a Southeast Asian government, with a US$2.4m US casino deal landing after the period end.
Since the half-year, energy order intake has already exceeded the whole first half, driven by customers outside the Middle East.
The results come as Synectics presses ahead with its “5P” transformation, which it has framed as a year of investment in FY26 ahead of accelerated growth from FY27.
The company guided to full-year adjusted EBITDA of between £3.7m and current market expectations of £4.1m, with the range hinging on how quickly its energy pipeline converts.