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LONDON (Alliance News) - Synectics PLC saw a quarter of its market value wiped away Wednesday morning, after the company said results for the first half of its current financial year, and for the year as a whole, will be "significantly below market expectations" largely due to contract delays.
Synectics shares were down 25% at 321.00 pence Wednesday morning.
The surveillance technology and networked security systems company said its now expects to report an underlying pretax loss of around GBP2.5 million for the first half of the year, and will therefore not payout an interim dividend.
It said the biggest hit to its full-year results for the year ended November 30 is being caused by the current fighting in Iraq.
"Specifically, due to delays in awarding three oil and gas surveillance systems contracts for re-building and expanding oil refineries in southern Iraq, a total of around GBP7 million of revenue and just over GBP2.1 million of net profit contribution to the group have been removed from the business' forecasts for the second half of this financial year," the company said in a statement Wednesday.
"It is impossible to say at this stage when or whether these delays will be resolved," it added.
The contract delays in the first half of the year relate to the UK systems integration activities within its Integration & Managed Services division, which it said has seen delays, inefficiencies and an unexpectedly large cost overrun.
The company said it expects trading for the second half of year to be very strong and well ahead of results achieved in the second half of last year, boosted by substantial growth in its consolidated order book and pipeline of anticipated orders. It said market conditions in the sector remain generally favourable.
"On the basis that trading is as strong as anticipated in the second half, the board's intention would be to recommend payment of a final dividend at the same level as that of last year," the company said.
The company said its expectations for the 2015 financial year remain unchanged.
"On the basis of the current growth being seen in the group's pipeline of new business, and the recent major investments in new facilities and infrastructure, the company expects that the strong level of anticipated trading in the second half of the current year will continue in the 2015 financial year," the company added.
Synectics said it will release its results for the first half of the year on July 29.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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