Synergy takes one-off charge to deal with macro risks

published 27 January 2012

Healthcare outsourcing group Synergy says that trading has been in line with expectations since the half-year point but it will incur a one-off charge after a "re-organisation" in response to macroeconomic risks.

Reported revenues for the nine months to January 1st are 8.1% higher at £232.5m, compared with £215.1m the year before, a slight slowdown from the 11.9% growth seen in the first half.

Underlying revenue rose 11.5% to £229.5m. On a like-for-like (LFL) basis however - excluding the benefit of an extra week of trading - the organic underlying revenue would have increased by 7.4%.

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The group is now undergoing a 'European Cost Reduction Programme', which will be focused on maximising cost efficiencies. "Whilst the operating environment in Europe continues to be relatively stable, the macroeconomic risks are perceived to have increased," the statement said.

Synergy has recently began a "re-organisation" which will reduce the cost base by £2m a year, but has led to redundancies which will expensed in the period. The firm has also closed four facilities and consolidated processing and manufacturing into other facilities, while selling off a surplus property.

As a result of this, there will be a one-off exceptional charge of £2.3m realised in the result of the financial year ending April 1st 2012.

Operationally, the group has seen revenue growth in UK & Ireland increase slightly after the opening of a new Hospital Sterilisation Service facility with the North Lincolnshire & Goole Trust in November.

Europe is more of a mixed bag though: Applied Sterilisation Technology revenues were up 27.8% ; while the Dutch linen business has seen a fall of 4.2%. Meanwhile, its smaller divisions in Asia & Africa and the Americas has seen strong revenue growth.