Q3 Interim Management
Statement
SYNERGY HEALTH
PLC
(“Synergy”, the
“Company” or the “Group”)
Friday 27th January 2012
Synergy (SYR.L), a leading provider of specialist
outsourced support services to health related markets, is pleased
to provide an update on trading performance since 2 October
2011.
Trading Update
Synergy is trading in line with the Board's
expectations for the full year.
Reported revenues for the nine months to 1 January
2012 increased by 8.1% to £232.5 million compared to the same
period last year, which benefited from an extra week of trading (Q3
2010/11: £215.1 million). On a like for like basis, the
reported revenue would have increased by 10.8%.
Underlying revenues, excluding currency effects and
prior year non-core business, were £229.5 million, 11.5% above last
year (Q3 2010/11 £205.9 million). On a like for like basis
excluding the extra week, the organic underlying revenue would have
increased by 7.4%.
Underlying revenues in the operating regions were as
follows:
| Underlying sales |
Q3 YTD 2011/12 |
Q3 YTD 2010/11 |
Growth |
Growth
(LfL)*
|
| UK & Ireland |
£116.5 million |
£107.1 million |
+ 8.8% |
+11.7% |
| Europe & Middle East |
£90.5 million |
£88.8 million |
+ 1.9% |
+4.5% |
| Asia & Africa |
£12.8 million |
£9.7 million |
+31.1% |
+34.0% |
| Americas |
£9.7 million |
£0.3 million |
- |
+29.0%** |
* 39 weeks vs. 39 weeks
** proforma growth
Operating margins are up 0.3% on the
comparative period and net debt reduced to
£145 million, from £149 million at 2 October 2011.
European Cost Reduction
Programme
Whilst the operating environment in Europe continues
to be relatively stable, the macroeconomic risks are perceived to
have increased. We have therefore been focused on maximising our
cost efficiencies and have recently carried out a re-organisation
that will reduce our cost base by approximately £2.0 million on an
annualised basis. The redundancy costs of this exercise have
been expensed in the period. In addition, we have closed four
facilities and consolidated processing and manufacturing into other
facilities to achieve scale benefit. A surplus property will also
be sold. As a result there will be a non-recurring
exceptional charge of approximately £2.3 million taken in the year
ending 1 April 2012.
UK & Ireland
Revenue growth increased slightly following the
opening of a new Hospital Sterilisation Service (HSS) facility with
the North Lincolnshire & Goole Trust in November 2011.
The associated contract with the United Lincoln Hospitals Trust
will go live as planned in May 2012. NHS patient volumes have
returned to normal levels and remained robust. Applied
Sterilisation Technology (AST), Linen and Healthcare Solutions all
remained steady in the period.
Europe
AST revenues grew by 27.8%, (11.1% organic),
reflecting good growth across all our countries. Our EtO
capacity expansion in Venlo is progressing to plan and the new
gamma plant in Marcoule will open on time in September. The
competitive environment in our Dutch linen business remains
challenging and as a result the business declined by 4.2%.
Since the start of Q4 however, we have taken a more aggressive
stance in the market winning €1.1 million p.a. of new
work.
Asia & Africa
Revenue growth in Asia & Africa continued to be
strong, increasing by 31.1%. Our EtO capacity expansion in
Kuala Ketil, Malaysia, is progressing to plan. We are in the
final stages of recruiting a new, very experienced person to be our
Asia & Africa CEO, underlining our commitment to this
region.
Americas
The Americas continues to perform well and in line
with expectations. Revenues are up 29.0% on a pro forma
basis. Our new EtO plant in Florida is now open and the new
EtO plant in Costa Rica remains on course to open in the
autumn.
Synergy will provide a further update at the end of
the next quarter in April 2012 and will report preliminary results
in June 2012.
For Further Information:
Dr Richard Steeves, Chief
Executive
Tel +44 (0) 1793 891 891
Gavin Hill
Investec Tel
+44 (0) 20 7597 5970
Patrick Robb
FTI
Consulting Tel
+44 (0) 20 7831 3113
Ben Brewerton