Marina Bay Sands casino in Singapore is one of the largest and most profitable in the world. The size of four football pitches, it boasts about 500 gaming tables and 1,600 slot machines. But Singapore’s gambling laws are strict. Every card game, every roll of the dice, every twirl of the roulette wheel must be recorded and, if there is any kind of glitch, games must stop.
With such high stakes, Marina Bay Sands can ill afford to make mistakes. Synectics, a small, Sheffield-based technology firm ensures it doesn’t. Synectics specialises in top-end security and surveillance systems, designed to keep people and places safe.
The shares are £1.80 and should increase in value as the company’s technology is world-renowned and chief executive Paul Webb has a clear plan for growth.
Casinos need high-quality systems to make sure customers play by the rules and staff are honest. Synectics can also help clubs to make big spenders feel welcome, using face recognition technology to alert managers when regulars walk in.
But Webb’s equipment is used in many other fields. Energy businesses must keep an eye on oil and gas fields at all times to make sure they are operating smoothly. Sites can be hazardous and equipment needs to be exceptionally hard-wearing.
On a roll: Casinos need high quality surveillance to ensure customers play by the rules and staff are honest
Synectics’ cameras can withstand extreme conditions, from burning deserts to freezing seas – and its technology relays information on a continuous basis to control rooms thousands of miles away.
The group’s kit is also used at facilities that turn gas into liquid and at ports, such as Milford Haven in Wales, where that liquefied gas is delivered in tankers that can be more than 300 yards long and carry their cargo at −162 C (–260 F).
Synectics has built a reputation in both gaming and energy, with customers ranging from Wynn Las Vegas in the US to Saudi Aramco in the Middle East. But the firm started out offering surveillance systems for public spaces and it continues to deliver that service, used by more than 100 towns and cities across the UK, including two-thirds of London boroughs and the City of London police.
Train operators, airports and bus firms use Synectics systems, the National Grid is a recent customer and hospitals are turning to Webb’s business too, to ensure patients and staff are kept safe. The company may operate across many fields but a clear line runs through all its work – the ability to deliver tailor-made security products that are reliable, resilient and adaptable to each customer’s needs.
These are not off-the-shelf surveillance cameras but highly sophisticated systems, involving hundreds of pieces of equipment, linked together and capable of delivering detailed data and information in real time and after the event. Despite the undoubted quality of Synectics’ gear, the company has suffered in recent times. Casinos were forced to close for months during the Covid pandemic and oil and gas activity slowed as prices fell after 2014.
Now, casinos are back on track and energy firms are in growth mode, following the Russian invasion of Ukraine.
Results for the year to November 2023 will be released at the end of this month but a trading update late last year was encouraging. Webb expects the figures to be ahead of forecasts and he has already amassed nearly £30 million of orders for 2024.
Brokers are looking for a 21 per cent increase in 2023 revenues to £47.5 million, with profits almost tripling, from £1 million to £2.8 million. Webb is also keen to reward shareholders with decent dividends so a 50 per cent increase is pencilled in for this year to 3p, rising to 4.5p in 2024.
Midas verdict: UK technology firms tend to be overshadowed by their peers in Silicon Valley, but companies such as Synectics are proof that we too can punch above our weight in this fast-growing field. At £1.80, Synectics is a business worth backing.
Traded on: AIM Ticker: SNX Contact: synecticsplc.com or 0114 2802828
