Quadnetics into the red
Article Date: Feb 03 2010Surveillance systems specialist Quadnetics Group turned a £527,000 profit into a £189,000 loss in the first half year.
Turnover at the Warwickshire-based company fell 16 per cent to £29.8 million in the six months to November, partly as a result of delayed orders in the North American gaming surveillance market and the Middle East. Chairman David Coghlan says this was offset by the success of AIM-quoted Quadnetics’ new suite of ‘Synectics’ network and mobile surveillance products and a restructuring set in train by chief executive John Shepherd, who was appointed towards the end of 2008.
Restructuring costs contributed to a halving of cash to £3.4 million at the end of November, but the company is maintaining its interim dividend of 2.56p a share. Quadnetics won £3.7 million of new business with the Stagecoach transport group, £2.1 million with UK Prisons, £1.6 million with Kashagan oilfield and £1.1 million with Nexus Rail during the first half, which the company ended with firm orders down 15 per cent to £22 million, though its prospective order ‘pipeline’ was up 70 per cent at £52.5 million.
By the end of December firm orders had risen to nearly £29 million, says Coghlan. He argues Quadnetics should now gain from the restructuring programme’s cost reduction measures and upturns in the Middle East and North America.
Quadnetics shares, which were as high as 350p over the past two years, now trade at 150p, up from a year’s low of 93p. They could rally further if the company’s programme succeeds.
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