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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Synergy Hlth. | SYR | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.00 | 0.00% | 2,325.00 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 2,325.00 |
| Top Posts |
|---|
Posted at 08/2/2013 19:12 by analyst Investors Chronicle says SellShares in cleaning and sterilisation specialist Synergy Health (SYR) have been notably strong performers lately, outpacing shares in similar companies by 20 per cent over the past quarter on the back of some promising deals in new markets. True, Synergy almost certainly has a solid future in its key markets, but, in the medium-term, the share rating has moved too far ahead of the group's growth prospects. Really brave punters might try 'short selling' the stock; meanwhile, shareholders might simply opt to sell. The trigger for the big share-price move was Synergy's decisive entry into the US hospitals market. The acquisition of SRI/Surgical Express, in particular, for $25m (£17m) got the City's admiration, especially because the price paid looked good for a business generating sales of more than $100m. However, it is not clear what effect the expansion will have on Synergy's underlying profit margins. These were more than 15 per cent in the first half of 2012-13, but there is a risk that the peculiarities of the US business could eat into them. This is because most US hospitals, unlike those in Synergy's core business with the NHS, have their own sterilising and cleansing facilities on-site. That means Synergy would be paid a fee as a service provider, rather than as a more lucrative full-facility operator. There is no doubt that the US market is far larger than anything Synergy has entered so far and the opportunities are there. However, the question hanging over the States-side project is whether investors have taken into account the amount of investment needed over the next few years to bring the service up to Synergy's standards. That could generate big one-off costs that may not be adequately priced in. As support services businesses go, Synergy is unusual because a lot of its capital is tied up in tangible assets. That's because often it has to fund and build hospital cleaning facilities itself for the contracts it wins. That means lots of upfront spending in order to grow sales, as each new contract can mean another round of construction. Analysts at broker CanaccordGenuity estimate that to achieve an adequate cashflow return on its capital of around 8 per cent, the company must invest between £15m and £30m annually to generate the required income. This inhibits shareholders' returns as the lead time between winning a contract and starting operations is between 18 months to two years. CanaccordGenuity estimates that the company will clock up capital spending of £75m over the next three years. Given the lag between spending and revenue-generation, sales growth will be deferred, making Synergy much more cyclical than is generally perceived. Synergy also has its share of immediate problems resulting from austerity in the European Union. This affects its Dutch business supplying hospital linen, in particular. Meanwhile, a spending squeeze in the NHS, while not affecting existing contracts due to the importance for patient care, could slow the pipeline of new work that Synergy could bid for. Share tip summary Trading on almost 17 times forecast underlying earnings, Synergy's shares are rated just above the UK average for the healthcare services sector at a time when significant parts of its operations face slowing growth in its established markets. Granted, expansion into the US seems like a good move given the size of the market, and European austerity will not last for ever. Yet the rating has moved to a level that is vulnerable to correction if the company fails to outperform the market's expectations. Given the consistently high capital spending Synergy must undertake, the possibility of disappointment is higher than average. Sell. |
Posted at 02/1/2013 11:15 by don carter Yes, because it's one of the most resilient and steady companies around, with this year's adjusted eps likely to come in around 68p and the small divi holding steady. It also has long periods where it is undervalued and no one writes on this BB. I've learned to see the value of SYR..... |
Posted at 07/7/2012 20:36 by northernlass What The Brokers Say08 June 2012 Singer Capital Markets upgrades Synergy Health from Fair Value to Buy and raises its target price from 887p to 939p. 12 June 2012 Investec reiterates its Buy recommendation for Synergy Health with a target price of 980p. Morgan Stanley retains its Overweight rating for Synergy Health with a target price of 1085p. 06 July 2012 Jefferies International retains its Buy rating for Synergy Health with a target price of 1150p. Sources: P.S. Here's a couple of links about SCLP, one of the hottest stocks at the moment: |
Posted at 07/6/2012 10:48 by don carter In current climate, these results are good, but next time it would be nice to see a substantial leap forward in growth as a result of these acquisitions. Mind you SYR is as reliable as ever in beating expectations in a dire market, and eps growth is about 13% last year - so let's keep perspective. |
Posted at 07/2/2012 17:59 by don carter Come on SYR, time for a little run to 975p.... |
Posted at 13/6/2011 12:54 by don carter Just seen them - been away - and they're a nice surprise. Should hit £10 by [increased] August divi. If basic eps can increase by another 28.5% next year, that will do nicely. Reliable, well-run, company. |
Posted at 04/6/2009 12:55 by don carter It's interesting that solid operations like SYR don't attract more attention, yet it seems a reliable investment after my 12 months in it. Topped up earlier in the week in the hope a little re-rating would occur. The forward pe must be quite low yet prospects look safe and even strong. I like the cash cushion and debt reduction, plus the 'back on track' line and increased forward order book. I'll continue to hold as a safe haven stock in choppy waters. |
Posted at 21/11/2008 18:05 by gunther1 "Defensive pharmaceuticals were hit as the sector which had held up reasonably well suffered amid a broad sell-off. Heavyweights AstraZeneca (AZN.L: Quote, Profile, Research) and GlaxoSmithKline (GSK.L: Quote, Profile, Research) slid 8.7 and 6.9 percent."(ADVFN Evening Euro Markets Bulletin) You can add SYR along these lines as well... |
Posted at 30/10/2008 09:41 by blueliner Good sector yesanother share price lately dragged down by SYR's recent warning & suffering expected downturn in hotel occupancy, is their bigger competitor Davis Service DVSG. DVSG Just released better than expected interim management statement sp at 4 year low, p/e 5, yielding 9% (their div policy has been progressive and is likely to remain unaltered as regarded as a steady & institutional income stock.) Yes both co's have high debt, what is interesting from todays interims is that Synergy's net finance charge is effectively 6% whereas Davis service are paying an average fixed rate of only 4.2%. Long term. Have been accumulating some in DVSG recently, as consider their management team of higher calibre than SYR to tough it out. Silchester Intl also recently accumulating now at 19% |
Posted at 14/10/2008 13:07 by piedro Hello John, I'm firmly embedded with TSTL but like to keep an eye on the competition ... SYR, BYOT, PURI.... - Dividends up. All seem to be increasing turnover and positive on their markets .... |
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