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Synergy struggling for growth

TIP UPDATE: Synergy Health seems to be breaking into the US hospital market, but the varied performance of its european markets is keeping a lid on revenue growth.
November 12, 2013

The hospital market has been as badly affected by austerity measures as any other area of government spending, and the half-year results for sterile equipment specialist Synergy Health (SYR) again showed that pressure in the european health market has yet to ease. In the circumstances, underlying revenue growth of 9 per cent was better than could have been expected, with most of this generated by recent acquisitions in the US.

IC TIP: Sell at 1,067p

This helps explains why revenues in the Americas increased by 81 per cent at constant currency to £41.4m, with divisional operating profits nearly doubling to £4.7m. However, growth in the US was offset by problems in Costa Rica, where the withdrawal of a major customer impacted trading at its applied sterilisation technology plant.

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