Outsourced sterilisation specialist Synergy Health has delivered strong revenue growth and stable margins through a mixture of core business growth and acquisitions. The buying spree continued after the year-end with the announcement alongside these results of a £24.9m deal to buy SRI/Surgical Express in the US. Reflecting the spate of acquisitions, year-end net borrowings rose by £61m to £173m, but a placing of 5 per cent of the existing share capital will raise around £23m and in effect largely finances the latest deal.
In the year to 1 April, the reported profit figures in our table were hit by £11m in one-off costs associated with the closure of four facilities, the four acquisitions and the amortisation of intangibles. However, on an adjusted basis pre-tax profits and EPS were actually up 13 per cent to £43.4m and 60.3p, respectively, and broker N+1 Brewin expects underlying EPS to rise to 63.9p in the coming year. The most exciting growth is being seen overseas, with revenues from Asia and Africa surging 31.6 per cent to £17.4m, as China increases healthcare spend, and the Americas segment posting 25 per cent turnover growth, albeit from a low base. Almost 10 per cent of revenues are now generated outside the UK, Ireland, Europe and the Middle East.
SYNERGY HEALTHCARE (SYR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 827p | MARKET VALUE: | £457m | |
| TOUCH: | 825-829p | 12-MONTH HIGH: | 1,002p | LOW: 758p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 526p* | NET DEBT: | 60% | |
| Year to 1 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 153 | 8.80 | 15.4 | 8.40 |
| 2009 | 225 | 18.9 | 28.2 | 10.10 |
| 2010 | 286 | 24.5 | 40.6 | 13.20 |
| 2011 | 287 | 36.7 | 52.1 | 15.84 |
| 2012 | 312 | 32.5 | 44.5 | 18.00 |
| % change | +9 | -11 | -15 | +14 |
Ex-div: 8 Aug Payment: 6 Sep *Includes intangible assets of £279m, or 504p a share | ||||
