18th May 2007 07:00
Synergy Healthcare PLC17 May 2007 Synergy Healthcare plc ("Synergy Healthcare" or "the Company") Update on Dunstable fire 17 May 2007 Synergy Healthcare, provides the following update in respect of the fire at itsDunstable linen processing centre in February 2007. The linen business trades asHealthtex and forms part of the UK's Patient Care division. Synergy Healthcare has made an insurance claim to cover the assets lost in thefire and the increased cost of working whilst repairs are made. Synergy'sinsurers have purported to deny liability for the claim in a letter receivedafter close of business on 15 May 2007. Synergy Healthcare has received firmadvice that it should pursue this claim and is now preparing to challenge theinsurers' initial decision. The Company believes it is unlikely that the liability issues will be resolvedbefore the results for the year ended 1 April 2007 are announced on 12 June2007. Therefore, the results will show an exceptional cost of approximately £4million relating to the impairment of assets and associated clean up and repaircosts. Accounting guidance requires that such a claim cannot be recognised untilvirtually certain. Therefore there will be no recognition of any potentialincome from the insurance although a claim has been made and the Company isoptimistic about its prospects of recovering this loss. The Company also has aclaim for increased costs of working, which are being mitigated, but cannot bequantified until operations at Dunstable resume. Since the fire, all of the workload has been successfully serviced from othersites within the Group and Healthtex has met all of its contract obligations andhas continued to win new business. Indeed, Healthtex has since the fire secureda new contract with a NHS Trust worth over £1 million per annum. These events do not impact the ability of the Group to meet analysts' forecastsin the current year. Contacts: Synergy Healthcare plc 01332 387100Richard Steeves, Chief ExecutiveIvan Jacques, Finance Director Brewin Dolphin Securities 0845 270 8600Andrew Emmott Financial Dynamics 020 7269 7279Ben Brewerton This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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