Restructuring efforts helped surveillance systems specialist Quadnetics to boost underlying pre-tax profit by 35 per cent in 2011 to £3.5m - despite tight public spending and a weak UK market for security products. Accordingly, the underlying operating margin improved to 5.1 per cent from 4.2 per cent.
Operationally, the Synectics Network Systems unit rode the recovery in the US gaming market to nearly double the divisional operating profits to £3.8m, on revenues 28 per cent higher at £16.2m. However, the pace was slower at the integration & managed services unit, reflecting exposure to the struggling UK retail sector - sales there rose just 2 per cent to £32.6m. The Synectics Mobile Systems unit, meanwhile, suffered from late Middle East military orders and a delayed development timetable for several products - which helped profits slide 75 per cent to £300,000. Still, acquiring German electronic surveillance group Indanet should help steer the division back on course - it has contributed sales of £2.9m and profits of £200,000 in the four months or so since the acquisition. The total order book reached £35.9m at the year-end. Management also plan to change the group's name to Synectics.
Broker Finncap forecasts adjusted pre-tax profits for 2012 of £4m, giving EPS of 18p (£3.5m and 16.4p in 2011).
QUADNETICS (QDG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 275p | MARKET VALUE: | £48.3m | |
| TOUCH: | 270-280p | 12-MONTH HIGH: | 295p | LOW: 170p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 27 | |
| NET ASSET VALUE: | 185p* | NET CASH: | £1.3m | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 66.1 | 4.41 | 25.9 | 6.0 |
| 2008 | 79.2 | 4.39 | 21.6 | 7.0 |
| 2009 | 70.7 | 0.47 | 1.7 | 7.0 |
| 30 Nov | (£m) | (£m) | (p) | (p) |
| 2010† | 61.3 | 1.36 | 6.4 | 7.0 |
| 2011 | 69.0 | 2.46 | 10.2 | 7.0 |
| % change | +13 | +81 | +59 | - |
Ex-div:14 Mar Payment: 9 May *Includes intangible assets of £25.2m, or 143p a share †Pro forma figures | ||||
