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(Alliance News) - Spectra Systems Corp said Tuesday interim profit dropped substantially in the first half of 2019 on revenue that declined as a result of lower material production.
For the six months to the end of June, the banknote authentication and brand protection technology provider reported a 41% drop in pretax profit to USD2.0 million from USD3.4 million the year before, on revenue that dropped by 20% to USD6.4 million from USD8.0 million.
Spectra said that the revenue drop was due to lower material production compared to the year before, which had a higher than expected materials order from an unnamed G7 customer for the Authentication Systems unit.
Looking ahead, Spectra said it expects to see an improved performance in the second half of 2019, due to revenue contracted for the period relating to development work for the same G7 customer.
As a result, the group expects a rise in earnings for the year.
"The company's first half revenues and earnings are significantly lower than last year due to the front loaded scenario of 2018," said Chief Executive Officer Nabil Lawandy. "Our second half results are expected to be significantly higher than the second half of 2018 primarily due to revenue contracted in the second half relating to the development work for the same customer".
"The board therefore believes that the company is on track to achieve record earnings for the full year, as reflected by the recent significant trading upgrade issued last Tuesday, and continue the recent track record of growth fuelled by new products and new business from long standing customers," Lawandy added.
Shares in Spectra Systems were up 2.7% at 130.90 pence on Tuesday.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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