Outsourced sterilisation specialist Synergy Health expects overall revenue growth rates to reach double digits over the next 12-18 months, supported by sustainable and improved margins. Underlying revenue in the year increased 4.1 per cent before currency effects and the closure of non-core businesses, while gross margins improved to 38.2 per cent from 36.2 per cent in the prior year.
Synergy has facilities in the UK, Europe and China and its strategy is to focus more resources on Asia, where growth is outstripping that in the UK and Europe. However, that growth is coming from a much lower base with Asia and Africa together contributing just 4.7 per cent of global revenues against the UK and Ireland's 53.9 per cent and Europe and the Middle East's 41.3 per cent.
As part of its global expansion strategy, Synergy has acquired Gamma Service Produktbestrahlung in Germany and BeamOne in the US, with the acquisitions funded from operations. These deals make the group the second largest global provider of outsourced sterilisation services. Moreover, new contracts and contract renewals of £114m have boosted the order book to £920m.
Investec Securities expects adjusted pre-tax profit of £41.3m for 2012, giving EPS of 56.7p.
| SYNERGY HEALTH (SYR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 919p | MARKET VALUE: | £506m | |
| TOUCH: | 919-920p | 12-MONTH HIGH: | 952p | LOW: 607p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 524p* | NET DEBT: | 39% | |
| Year to 3 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 117 | 10.6 | 20.4 | 7.00 |
| 2007 | 153 | 8.80 | 15.4 | 8.40 |
| 2008 | 225 | 18.9 | 28.2 | 10.10 |
| 2009 | 286 | 24.5 | 40.6 | 13.20 |
| 2010 | 287 | 36.7 | 52.1 | 15.84 |
| % change | - | +50 | +28 | +20 |
Ex-div: 10 Aug Payment: 6 Sep *Includes intangible assets of £233m, or 423p a share | ||||
