Synergy Health IMS

Delivers a range of specialist outsourced services to healthcare providers and other clients concerned with health management. Such as hospital sterilisation services; applied sterilisation technologies for single-use medical devices; reusable surgical solutions for daily delivery of sterile reusable gowns and towels; clinical pathology, toxicology and microbiological services; chemical and microbiological analysis; linen management services for healthcare facilities and product solutions designed for infection prevention and control, patient hygiene, surgical procedures and wound care.  I have a holding in my growth portfolio (epic code: SYR)

Synergy Health issued their 3rd quarter IMS today and stated that trading in line with the Board's expectations for the full year, which according to my notes should deliver about 70p per share. 

Reported revenue for the nine months increased by 8.4% to £286.9m up from £264.7m last year. Underlying revenue, excluding currency effects, increased by 6.0% to £280.5m. 

By territory the sales performance for the nine months was:

UK & Ireland                 + 1.4%

Europe & Middle East    - 4.2%

Asia & Africa                 + 6.6%

Americas                        +40.2%

They also stated that their order book has increased to approximately £1.35bn, which represents almost 3.5 years of sales.

 

There was a slightly negative comment on the strong US market where they stated that "...Trading over the Christmas period, which is traditionally strong in the United States, has been slower than expected...", although contract wins have been strong in this territory, so it may be wrong to read too much into this comment, but worth watching for any weakness.

There was a positive note on the troubled Dutch linen business where they stated that "...Our linen business is showing signs of stabilising, and under the leadership of a new managing director we are cautiously optimistic that we are reaching a period of stability..."

So in summary a reasonably positive statement, with the company on target to meet market expectations and good visibility for the future from a strong order book.  With the current price at 1269p producing a P/E of 18 on 2014 earnings, the stock looks up with events on an expected 10% growth for 2015.  Worth watching though for any new major contract wins.