In this Research Note, we examine Synectics plc, the listed UK provider of large-scale electronic security systems for critical and regulated environments. This article is based on their Annual Results, year ending 30 November 2023 announced on 27th February 2024, an InvestorMeet presentation on 29th February 2024, Annual Report 2023, and supplementary analysis.

Based in Sheffield, UK, Synectics positions itself as a security and surveillance technology provider for specialist core markets, including gaming, oil and gas, public space, transport and critical infrastructure:

• In the gaming sector, Synectics’ software monitors and records over 150,000 channels in around 100 casino properties around the world.
• In the oil and gas sector, over the past decade, the company has supplied more than 10,000 COEX explosion-protected camera stations, safeguarding refineries, pipelines, offshore vessels and platforms for the likes of Saudi Aramco and Shell.
• In the transport sector, the Company delivers solutions for providers such as Deutsche Bahn, Stagecoach and Irish Rail – with over 5 billion passenger journeys protected annually.
• In public spaces, the Company’s surveillance and security solutions monitor more than 100 town and city centres, alongside venues, stadia, and tourist attractions, including the Queen Elizabeth Olympic Park and the British Museum.
• Their solutions also serve to protect critical infrastructure for customers including National Grid and Cadent Gas.

Synectics Financial Highlights

• Revenue increased 26% to £49.1 million (FY 2022: £39.1 million).
• Increase in underlying operating profit to £3.1 million (FY 2022: £1.2 million).
• Strong results, exceeding market expectations, underpinned by growing demand from the oil and gas sector.
• Solid order book, reinforced by sound order intake and contract wins across all sectors, with continued momentum into 2024.

Systems Division

Synectics Systems division provides specialist electronic surveillance systems, based on its proprietary Synergy software platform and COEX specialist camera range. The division reported 2023 revenue of £32.0 million (+32% year-on-year), underpinned by strong demand from the oil and gas sector and a marked recovery in the gaming market in Asia.

Security Division

Synectics Security division delivers integrated solutions and support directly to end-users in the UK and Ireland, utilizing a combination of proprietary technology and third-party products. The division reported 2023 revenue of £18.3 million, based on ongoing projects with high-profile clients, including City of London and West Midlands police, numerous local authorities and the Queen Elizabeth Olympic Park.

Technology

During the year, Synectics announced further releases of its Synergy software platform, featuring enhanced data analysis tools, the integration of further AI and sector-specific capabilities, improved user functionality and robust measures to strengthen the system’s resilience against cyber threats.

In addition to developing its software offering, new and upgraded hardware was released, both to support its software deployments and for specialist market applications.

Based on targeting a limited number of vertical markets where security and surveillance needs are acute and where customers value sector-specific technology capability their business model differentiates the company from other mainstream suppliers.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.