Despite NHS procurement problems and an increasingly uncertain economic backdrop, sterilisation specialist Synergy Health managed a steady half-year performance - sales in its core UK market rose 2.9 per cent in the period to £78.2m.
But NHS structural reorganisation is proving challenging for those looking to secure contracts. "We were getting near to the end of the process only to find that senior executives have moved to other hospitals," noted chief executive Richard Steeves. Moreover, procurement delays meant increased working capital, although it was mainly £27.7m of expenditure on new facilities - as well as £9.9m on acquisitions - that boosted the net debt pile in the half to £149.2m from £112.3m.
Meanwhile, Synergy's sedate-looking European sales growth is in stark contrast with that of the Africa & Asia unit - sales there grew 29.8 per cent to £8.2m, with operating profits rose a roughly similar amount to £1.7m. The company has particularly high hopes for China's expansion of free public healthcare. Although Mr Steeves said progress had been slower than expected - partly because the company has had to walk away from deals that involved offering some form of bribe.
Investec Securities expects full-year pre-tax profit of £43.9m, giving EPS of 58.7p (2011:£38.3m/52.6p).
SYNERGY HEALTH (SYR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 814p | MARKET VALUE: | £450m | |
| TOUCH: | 812-814p | 12-MONTH HIGH: | 1,002p | LOW: 759p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 522p* | NET DEBT: | 52% | |
| Half-year to 2 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 139 | 15.0 | 21.6 | 6.00 |
| 2011 | 155 | 16.6 | 23.7 | 6.82 |
| % change | +12 | +11 | +10 | +14 |
Ex-div:16 Nov Payment:15 Dec *Includes intangible assets of £253m, or 457p a share | ||||
