Investors were under the impression the latest results from Synergy Health (SYR) would be pretty meaningless given the group's impending $1.9bn (£1.2bn) takeover by its US counterpart Steris Corporation. The deal was agreed last October, but the US Federal Trade Commission (FTC) blocked the transaction in the last week of May. The FTC argued the deal would significantly reduce competition for the sterilisation of medical devices and other products using radiation. Both companies have said they will contest the decision.
Putting the takeover impasse to one side, analysts at Numis Securities call Synergy's full-year results "slightly disappointing". Both sales of £409m and adjusted pre-tax profit of £58m came in at the bottom end of consensus forecasts, and the group has halted payment of its dividend despite net debt hardly moving year on year.
Synergy's share price has lost nearly a fifth of its value since the FTC made its decision public, and it is clear any share price movement will remain deal-driven. Numis has suspended rating Synergy shares in light of the deal confusion, but had previously pencilled in estimates for pre-tax profit of £66.5m in the year to March 2016, giving EPS of 81.9p.
| SYNERGY HEALTH (SYR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,825p | MARKET VALUE: | £1.08bn | |
| TOUCH: | 1,823-1,825p | 12-MONTH HIGH: | 2,426p | LOW: 1,271p |
| DIVIDEND YIELD: | nil | PE RATIO: | 32 | |
| NET ASSET VALUE: | 605p* | NET DEBT: | 45% | |
| Year to 29 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 287 | 36.7 | 52.1 | 15.8 |
| 2012 | 312 | 32.5 | 44.5 | 18.0 |
| 2013 | 361 | 38.0 | 53.0 | 20.7 |
| 2014 | 380 | 42.9 | 57.8 | 22.8 |
| 2015 | 409 | 43.6 | 56.9 | 0.0 |
| % change | +8 | +2 | -2 | - |
Ex-div: na Payment: na *Includes intangible assets of £259m, or 439p a share | ||||
