Synectics sells non-core SSS business for up to £0.2m

Security and surveillance system specialist Synectics announced the conditional sale of the business of SSS Management Services on Friday, to Parfas for up to £0.2m in cash.

The AIM-traded firm said SSS is a trading entity of its Synectics Security division, with the transaction subject to certain closing conditions, which was expected to be completed on or before the end of its financial year on 30 November.

It said SSS provides monitoring and managed services, primarily to multi-site retailers in the UK.

The activities were considered by the board to be non-core, and were not part of its growth plan.

Synectics said the sale of the business would allow it to focus on the growth of its core business, and allow SSS to “prosper” under private ownership.

The consideration comprised an initial cash payment on completion of £0.1m, with the balance conditional on the profitability of SSS post-sale being payable after the first anniversary of completion.

It said the proceeds would be used for general corporate purposes.

The board said the sale of SSS would strengthen the company's balance sheet, and would have a positive impact on the company's gross margin.

It was expected that the transaction would result in a material exceptional profit being realised on disposal, details of which would be included in the firm’s final results for the year ending 30 November.

In the company's last financial year, the SSS business generated audited revenues of £7m and an operating profit of less than £0.1m and, as at 30 November last year, had audited net liabilities of around £1.6m.

“SSS Management Services is a unique business with a very strong management team that will thrive under private ownership,” said chief executive officer Paul Webb.

At 0906 GMT, shares in Synectics were down 4.27% at 105.3p.

Reporting by Josh White for Sharecast.com.