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UPDATE 1-Overseas contracts boost Synergy Health's profit
June 4, 2014 / 7:36 AM / in 3 years

UPDATE 1-Overseas contracts boost Synergy Health's profit

(Adds analyst comment, details, background, share movement)

June 4 (Reuters) - Synergy Health Plc, a provider of sterilising services and pathology tests, reported a 13 percent rise in full-year profit as it saw an uptick in contracts from the United States.

The company, which sterilises surgical gowns and surgical instruments and provides laboratory services to hospitals and surgery centres, said it has won new contracts during the period, bringing its global bid book to over 100 million pounds ($167 million) per year.

“We begin the new fiscal year implementing 48 million pounds of new work over the next 18 months, which will steadily raise Synergy’s growth rate,” the company said in a statement on Wednesday.

Synergy said pretax profit rose to 42.9 million pounds in the year ended March 31, from 38 million pounds a year earlier. Revenue grew by 5.3 percent to 380.5 million pounds.

Despite austerity measures in place in the UK and Ireland holding back spending in the countries’ national health services programmes, a push into overseas markets, including the United States and China, helped Synergy Health clock the growth.

Given its strong order book, the company is well positioned to continue strong earnings growth in the coming years, said Investec analyst Nicholas Keher and reiterated his “buy” rating on the stock.

Out of the eight analysts covering the company, four had a “strong buy” rating on the stock and one rated it as a “buy”, Thomson Reuters data from June 3 showed.

The FTSE-250 company raised its final dividend by 10.9 percent to 14.20 pence per share.

Shares in the Wiltshire, England-headquartered company were down 1 percent at 1304 pence at 0731 GMT in thin-volume trade on the London Stock Exchange. The broader market was down 0.05 percent.

$1 = 0.5974 British Pounds Reporting by Esha Vaish in Bangalore; Editing by Gopakumar Warrier

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