Trading Update & Contract Win

RNS Number:2642Q
Synstar PLC
29 September 2003

29 September 2003

                                  Synstar Plc

           #200m seven-year contract with Fujitsu Services signed
                                       &
                             Year-end trading update


Synstar plc, ("Synstar" or "the Company") the pan-European IT services provider,
today announces the signing of a #200 million contract with Fujitsu Services and
provides an update on trading for the year ended 30 September 2003.



Trading update for the year ending 30 September 2003



The second half of the financial year has been characterised by good profit
growth in the company's core UK operations.  The majority of Synstar's European
businesses have performed in line with our expectations, with the exception of
France. Our operations in Holland have been performing well and our Spanish
operation has made significant progress in terms of contract wins on which we
expect to build next year. Our businesses in Belgium and Germany have performed
in line with our expectations



Our operations in France - where, as highlighted in our interim results, our
business is under performing - are the subject of a further operational review
and Synstar will report on the outcome of this review at the time of its
preliminary results in early December 2003.



Cash generation for the year is expected to be strong, adding to the #19.2
million in net cash reported as at 31 March 2003.



Synstar expects to be able to report a small year-on-year increase in both
full-year operating profit and earnings.  However, the preliminary results for
the year ended 30 September 2003 are expected to be around the low end of market
expectations.



Steve Vaughan, CEO of Synstar said today:



"Our European operations are beginning to respond well to the roll out of the
Group's strategy to sell multiple services to larger clients.  In combination
with solid profit growth in our core UK business, this has underpinned a solid
performance for the financial year that is expected to show like-for-like profit
growth.  Cash generation remains a strong feature of the Group and the signing
of this very significant, pan-European contract with Fujitsu Services validates
the company's strategy and is expected to be margin enhancing as these revenues
come on stream.



Clearly more robust action is required within our French operations and we will
report on the scope and progress of this in the announcement of our preliminary
results in December."


#200 million Fujitsu Services contract signed



On 17 June 2003, Synstar announced that it was in advanced negotiations with
Fujitsu Services concerning a material contract.  This contract has now been
signed and will be worth approximately #200 million over the course of seven
years.



Synstar will be providing Fujitsu Services with a logistics service to support
the maintenance contracts of Fujitsu's operations in the UK and mainland Europe.
The arrangement encompasses the delivery of computer parts, and the associated
capital purchases, strategic planning, bid support, warehousing and
distribution.



Synstar currently provides logistics services to its own network of UK and
European operations and both companies have established that there are clear
benefits in combining the investment and sharing economies of scale involved in
this activity.  The agreement will see Fujitsu Services enhancing its logistics
capability significantly.



The contract will run in two phases.  The first 'interim' phase is expected to
run from now until April 2005, which is the conclusion of the contract with the
incumbent supplier.  Revenues to Synstar during this phase are not expected to
have any material financial impact on projections for the financial years ended
September 2003 and 2004.  The second 'active' phase of the contract is due to
commence in April 2005, and is initially expected to be worth approximately #30
million to #40 million per annum.  Synstar expects the contract to be margin
enhancing.



The business was won in a competitive tender with 12 other firms.



Synstar CEO, Steve Vaughan, said: "This is our first logistics deal and the
largest contract Synstar has ever won.  It clearly demonstrates again the
success in winning larger contracts, one of the corner stones of our business'
strategy.  This deal will provide significant cost savings for Fujitsu Services
and provides Synstar with the foundation to build one of the most significant IT
services-based logistics operations in Europe. In addition, this contract will
produce a significant improvement in our long term growth and profitability.  We
very much hope that in time, we will be able to develop other opportunities that
arise from this increase in our logistics footprint and capability."



Fujitsu Services Group Commercial Director, Andy MacNaughton said: "We have been
piloting Synstar's service since January and have been impressed by the dynamic
and flexible service delivery that we have received. This, coupled with the
innovative nature of the commercial deal, made the Synstar offer compelling."





                                      Ends



For more information, please contact:


Steve Vaughan / Stephen Gleadle / Christine Jones            Tel: [phone]
Synstar Plc
Ed Bridges / James Melville-Ross / Juliet Clarke             Tel: [phone]
Financial Dynamics



About Synstar:



Synstar International is a pan-European, independent provider of Business
Availability services. Business Availability is a full range of integrated
services and solutions in five principal areas: business continuity, data
management, networking, lifecycle management and computer services.



Synstar has customers in the defence, telecommunications, utilities, banking,
retail, aerospace, public sector, and automotive industries.  Synstar has over
3000 employees with operations across Western Europe and is quoted on the London
Stock Exchange (Symbol: SYN).





About Fujitsu Services:



Fujitsu Services is one of the leading IT services companies in Europe, Middle
East and Africa.  It has an annual turnover of #1.86 billion (Euro2.8 billion),
employs 13,100 people and operates in over 20 countries.  It designs, builds and
operates IT systems and services for customers in the financial services,
telecom, retail, utilities and government markets.  Its core strength is the
delivery of IT infrastructure management and outsourcing across desktop,
networking and data centre environments, together with a full range of related
services, from infrastructure consulting through integrated and deployment.



Headquartered in London, Fujitsu Services is the European-centred IT services
arm of the Fujitsu Group.  The Fujitsu Group is US$38 billion (Euro35 billion)
leader in customer-focused IT systems and services for the global marketplace.



Fujitsu Services website: uk.fujitsu.com


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

MSCLFMRTMMITBIJ