Synectics plc Reports Strong FY24 Results with Double-Digit Growth
Why we think this is very good
The company has demonstrated exceptional performance across all key financial metrics. Revenue increased by 13.6% to £55.8 million, with underlying operating profit up by 56.8% to £4.8 million. Margins have improved significantly, with record gross margins of 42.9%. The cash position is strong, with a record balance of £9.6 million and no debt. The order book is robust at £38.5 million, underpinning confidence for future growth. While there are some potential risks in new market expansions and geopolitical tensions affecting the oil & gas sector, the overall outlook is very positive, with expectations of continued double-digit growth in FY25. The company's strategic investments and market positioning suggest a strong foundation for sustained success, despite potential execution risks in new markets.
Key Points
- Revenue increased by 13.6% to £55.8 million
- Underlying operating profit up 56.8% to £4.8 million
- Record gross margins of 42.9%, up from 40.7%
- Underlying EPS increased significantly to 21.6p from 14.2p
- Record cash balance of £9.6 million with no bank debt
- Strong order book at £38.5 million, up from £29.2 million
- Recommended total dividend up 50% to 4.5p per share
- Positive momentum in all key markets, particularly within Gaming
- Strategic investments in products, operations, and customer relationships
- Expectations of maintaining double-digit growth in FY25
- Potential risks in new market expansions and geopolitical tensions in oil & gas sector
Summary
Synectics plc has delivered strong financial results for FY24, with revenue up 13.6% to £55.8 million and underlying operating profit increasing by 56.8% to £4.8 million. The company achieved record gross margins of 42.9% and a significant increase in underlying EPS to 21.6p. A robust order book of £38.5 million and a record cash balance of £9.6 million with no debt provide a solid foundation for future growth. The company is investing in strategic initiatives across products, operations, and customer relationships to ensure sustainable growth. With positive momentum in all key markets and expectations of maintaining double-digit growth in FY25, Synectics is well-positioned for continued success in the security and surveillance solutions sector. However, potential risks include execution challenges in new market expansions and geopolitical tensions affecting the oil & gas sector.