11th Oct 2007 07:00
Synergy Healthcare PLC11 October 2007 Thursday 11 October 2007 SYNERGY HEALTHCARE PLC ("Synergy" or "the Company") Trading Update and Appointment of Joint Brokers First half performance in line with management expectations and confident outlook for full year Synergy Healthcare plc (AIM: SYR), a leading provider of outsourced healthcaresupport services in the UK, Continental Europe, Asia and South Africa, todayprovides an update on trading prior to the release of its results for the sixmonths ended 30 September 2007. These results will be announced on 20 November2007. The Company has continued to enjoy a solid, consistent performance across allits businesses. Organic growth rates have benefited from the predicted highdemand for services within our Patient Care and Surgical businesses. As aresult the Company has performed strongly, in line with management expectations. Patient Care Services Patient Care has benefited from the implementation of its strategy to focus oninfection control initiatives. Underlying sales have grown strongly and our newtechnologies are beginning to establish themselves. In the first half of theyear seven acute hospitals in the UK have established isolation facilities usingour AirCleanseTM system and we expect to see this number increase substantiallyduring the second half of the year now that the concept has been demonstrated.Assure, our range of anti-infection cleaning products using Byotrol, is alsogaining traction as early adopters become reference sites. The UK linenmanagement business has also performed well in the period following new contractwins driven by closures of NHS facilities due to the continued trend tooutsource. Patient Care's facility in Dunstable is due to re-open shortlyfollowing the fire last year, and will be fully operational from mid-December.Meanwhile LTS, our Dutch linen business, is enjoying record growth as a resultof new contract wins and the implementation of the Patient Care strategy. Commercial Services Isotron, Synergy's commercial medical sterilisation & materials modificationbusiness, has performed satisfactorily. Cost savings following the acquisitionare on plan, and in order to lift sales growth rates to Synergy's levels, we arerestructuring Isotron's approach to sales & marketing to focus on an outcomesbased strategy in line with Synergy's business model. In addition, Isotron isadding new capacity in strategic locations in Continental Europe and Asia. Much effort has been expended on completing the Venlo facility in theNetherlands, which is undergoing certification this month. The team is alsoprogressing well with the plans for our new medical device sterilisationfacility in Suzhou, China where construction is expected to commence inDecember. Our first Chinese facility will provide gamma and ETO sterilisationtechnologies for medical devices and other industrial companies, and will nowalso include a surgical instrument processing facility following solid supportfor the concept from hospitals in the local city with a population of some 11million people. These new facilities, together with the revised business model,will position the business for higher growth going forward. Surgical Support Services Surgical has benefited from new primary care contracts as well as a generalimprovement in the market driven by an increased number of patients beingtreated. We expect to see a further uplift during the second half of the yearas hospitals strive to meet the 18 week maximum waiting target set by theGovernment. Our new facility in Manchester, won under the nationaldecontamination project, will open on time on 5 November and we expect to havecompleted the full customer transfer early in the New Year. Our contract inCentral Lancashire is in a position to reach financial close shortly. Biddingfor additional contracts in the UK, Netherlands and more recently Belgiumremains active, and we are confident that our progress in this area will besustained. At the AGM in July we indicated that we will prepare the Company for a move tothe Official List within 12 months. This decision reflected Synergy'sincreasing scale and international ambition. In line with this objective wehave decided to appoint Morgan Stanley and Investec as joint brokers with effectfrom today. Investec will become the Company's Nominated Advisor. Finally, the Company announced last week that it had won a number of contractsthat will add around £85 million to the forward order book. We enter the secondhalf of the year with confidence with approximately £6 million per annum of newcontracts including the new Manchester Surgical facility beginning in our thirdquarter. Dr Richard Steeves, Chief Executive of Synergy Healthcare plc, commented: "We are pleased with the progress that we are making. The core business isperforming well whilst the new opportunities created by the acquisition ofIsotron create a platform to promote our business model on an internationalbasis. In particular we are focusing our attention on China where the domestichealthcare market is growing around 12% per year creating opportunities for thewhole of the Synergy group. "We are confident in the outlook for the full year and believe that with theincreased utilisation of outsourced services by the healthcare industryworldwide, Synergy remains well placed to continue its strong growth." Enquiries: Synergy Healthcare plcDr Richard Steeves, Chief Executive 07768 020202 Ivan Jacques, Finance Director 07714 012514 Morgan Stanley 020 7677 2395Peter Moorhouse Investec 020 7597 5970Patrick Robb Financial Dynamics 020 7831 3113David Yates / Ben Brewerton This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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