Synergia Energy Share Discussion Threads

[burrmj] 29/11/2001 18:50

i thought it was a pretty harsh fall, another over reaction by the city to results that were not all that bad, must be a buy now what do you think??

[kdc] 29/11/2001 10:40

I thought the results and statement were as good as could be expected and anticipate a good run when tech starts to move again

K

LONDON (SHARECAST) - Synstar plunged into loss in the year ended September 2001, but its chief executive Steve Vaughan said today the company is now generating profits, free of debt and has £8m in the bank.SYN - Synstar


He attributed the losses to three one-off exceptional items totalling £24.9m. These were: £8.5m restructuring costs, an £11.9m goodwill write-off for three previous acquisitions and a £4.5m write-off relating to the disposal of its loss-making Italian business.

These exceptionals resulted in a £21.3m pre-tax loss that contrasts with a pre-tax profit of £5m for the previous year, although turnover of £244.5m was up on the previous year's £215.2m.

Vaughan said: "We are now generating profits in the current half, underpinned by the fact that 70% of our revenues are long-term contracts with an average life of two years and three months.

"Our clients are typically large multinational corporates. New client wins include BT and Ford and we also have 17 of the top 20 banks in Europe."

Half the company's business is in the UK and half on the Continent. Synstar pursues a strategy of selling services to a single client across a number of national markets but is careful not to be seen offering a one-size-fits-all solution.

"We do not intend to follow in the footsteps of some telecoms operators and make the mistake of offering a one-stop pan-European contract to multinational clients," Vaughan said.

"These companies may think global but they buy local and our strategy is to sell our services in one country and then use that referral to offer them to the same client on another contract in another country."

Synstar's business focuses on maintaining the computer infrastructure of large corporations, systems configuration, the roll-out of new PC networks and disaster recovery.

Before this morning's news, analyst consensus forecast for the full year was a pre-tax profit of £3.7m rising to £8.8m in the current year. Before the £24.9m of exceptional items, Synstar's pre-tax profit was £3.65m, although even this would have represented a fall from the previous year's pre-exceptional figure of £9.12m.

The shares rose 1p to 62p this morning, giving Synstar a market value of £100.8m.
Copyright © 2001 ShareCast.com

[sham3001] 29/11/2001 10:28

Stocks wobbling.

[citytraderboy] 29/11/2001 10:27

I've heard that extra news will come out after 11.00 a.m.

[citytraderboy] 29/11/2001 10:21

Any news yet ?

[citytraderboy] 29/11/2001 08:45

Website for any updates on the analysts meeting in the City ?!

[citytraderboy] 29/11/2001 08:41

www.synstar.com

[citytraderboy] 29/11/2001 08:38

There will be a presentation for analysts at 9.30am this morning at GCI
Financial, 80 Cannon Street, EC4N 6ER. Please call Geoff Callow on 020 7398
0800 if you would like to attend. The presentation slides will be available
on our website at www.synstar.com

................................................................................

Should be interesting !

[citytraderboy] 29/11/2001 08:32

Summary

We expect a difficult year ahead, but the strong foundations we have laid give
us grounds for optimism. There is good evidence that our strategy to sell more
value-added services to our existing customer base is the right approach.
Developing stronger, longer and wider relationships with key clients is our
best defence to increasing marketplace pressures. Our ability to execute a
successful, rapid restructuring programme gives a good insight into the
Group's ability to develop positively.


Overall, I am pleased to report that we have taken the first steps towards our
ambition to achieve world class status as a provider of business availability.
We face the future with increasing confidence.


Steve Vaughan
Chief Executive


Finance Director's Review


Introduction

The financial year ended 30 September 2001 was characterised by two very
different half-year outcomes. The first half, which followed the Y2K slowdown,
continued to be impacted by delays in contract start dates despite a growing
order book. In contrast, the second half has seen the benefits of these new
contracts together with the cost reductions from our restructuring programme
and the profit improvement of the disposal of our loss making Italian
subsidiary.


This is illustrated in the table below and discussed in the commentary.


#'m H1 H2 Full
Year
Revenue
Continuing operations 108.5 116.0 224.5
Discontinued operations 11.8 1.9 13.7
Total revenue 120.3 117.9 238.2

Cost of sales (89.9) (86.3) (176.2)

Gross Margin 30.4 31.6 62.0

Overheads (30.1) (27.3) (57.4)

Operating profit before goodwill and exceptional items 0.3 4.3 4.6



Thus in summary we have reported operating profit (excluding amortisation of
goodwill and exceptional costs) of #0.3m (2000: #5.9m) and #4.3m. (2000:
#4.0m) for the first and second halves respectively.



Revenue

Although revenues from continuing operations declined in the first half, they
recovered in the second half, growing by 6.9%. Year on year revenue from
continuing operations grew 4.3%. The driver of this growth was computer
services, which was ahead by 4.7%, while the performance from business
continuity was flat.


It is pleasing to note that the percentage of revenue represented by long term
contracts has remained around 70% and that mainland Europe is now showing a
stronger performance, with revenues from continuing operations up 7.5 %,
whilst the UK grew 2.5%.

Gross Margin

Gross margin recovered in the second half to reach 26.8%, from 25.3% in the
first half. The full year margin was 26.0% (2000: 27.9%).


Despite this recovery in gross margin, it is important to note that the
business remains subject to significant price pressure in each of our markets.
Gross margins for business continuity however, remain above 60%.



Operating Expenses

In previous reporting periods, including the first half of 2001, increases in
operating expenses were recorded. These were driven in particular by the
leasing and depreciation costs associated with our investment in business
continuity centres.


As a result, although second half operating expenses actually fell by #2.8m,
(9.3%), comparable full year total operating expenses increased by # 1.5m
(2.7%).



Operating Profit

Annual operating profits before goodwill amortisation and exceptional items
fell by #5.3m to #4.6m. The operating profit margin, calculated on the same
basis, fell from 4.2% to 1.9%.


The main drivers of this fall originate in the first half which was impacted
by the year on year loss of highly profitable Y2K revenue, the incremental
costs associated with our new business recovery centres and underlying margin
decline.


This has been addressed by the programmes outlined in the chief executive's
review and, as indicated above, the Group traded in the second half at
significantly higher levels of margin and annualised profitability.



Exceptional Items

As reported at the half year a number of one-off items impacted the reported
results.



Restructuring provision

Following his appointment of as chief executive on 2 January 2001, Steve
Vaughan undertook a strategic review of the Group. This led to a
restructuring programme designed to enable the Group to build on its existing
strengths and respond faster and more creatively to the needs of our
customers.


This restructuring programme, which focused on the overhead base, has resulted
in a net reduction in headcount together with a small number of key new hires.
This programme generated costs of #8.5m, which are considered exceptional to
the Group's main activities.


The restructuring programme is estimated to have delivered ongoing annual
benefits of some #6 million, of which a proportion will be re-invested in the
business in order to drive future growth.



Disposal of Italian business

On 8 May 2001 the Group disposed of the share capital of Synstar Computer
Services SpA and its other Italian subsidiaries to Gruppo ATR Srl of Brescia,
Italy. As a result, the sales and losses associated with these operations are
shown separately as discontinued activities. The loss on the sale of business
of #4.5m has been treated as an exceptional item.


Goodwill

As required by FRS 11 (Impairment of Fixed Assets and Goodwill), the Board has
reviewed the carrying value of goodwill for all of our subsidiaries. Taking
into account the expected cash flows that will be derived from these entities
and recent trading performance, it has been decided to write-off the remaining
goodwill of Lancare (#10.4m), CT Consulting (#1.0m) and Tecsys (#0.5m)


Notwithstanding the above, we continue to believe that there are excellent
prospects for developing these businesses within Synstar. However, this will
require further investment and integration into the core business.



Interest

Interest paid fell from #0.7m in 2000 to #0.6m in 2001. Further reductions are
likely in 2002 following the disposal of the Italian debt position and the
underlying cash generative nature of the Group's activities.



Taxation

The tax rate for the full year has fallen from 44% in 2000 to an on-going rate
of 38% in 2001. This latter rate reflects both the higher rates of tax
experienced in continental Europe and the fact that it has not been possible
to obtain tax relief on all losses incurred in continental Europe.


The tax position under FRS 19 (Accounting for Deferred Tax) has been reviewed
and there has been no impact on either the current or prior year as a result
of its implementation.


Were France and Switzerland to move into profit, there is further scope for
reductions in rate.



Earnings per Share

Arising from the above, the basic earnings per share (adjusted for goodwill
amortisation and exceptional items) has decreased by 2.0p to 1.1p.



Cash Flow and Net Funds
Cash flow from the business remains strong.


Despite the lower levels of profit and the impact of restructuring, the Group
generated #1.8m of cash in the year compared to a usage of #4.7m in 2000. This
was driven by three main factors:


1. reduced capital expenditure (2001:#11.5m, 2000:#20.5m), following the
high levels of Business Continuity expenditure last year on the new
business recovery centres in Newbury and Brussels.

2. a net inflow of funds (#2.3m) arising from the transfer of debt on the
sale of our Italian subsidiary compared to an acquisition related outflow
last year (#3.1m).

3. strong control over working capital (2001: #3.5m inflow, 2000: #1.4m
outflow).


The business was ungeared at 30 September 2001 with net cash balances of #8.0m
(30 September 2000: #6.1m). However, it should be noted that the half-year and
full year cash balances are impacted by the timing of receipt of cash payments
from certain large customers. As indicated by the interest charge the Group
has an overall overdraft position throughout most of the year.



Summary

Following the decline in revenue post Y2K, much work has been done to enhance
the Group's ability to drive future earnings growth:

- the cost base has been addressed

- Italy, the largest loss making subsidiary, has been sold

- the reorganisation of the business enables it to better focus on
cross-selling our product range to our blue chip customer base and
therefore drive revenue growth.

- there is now a stronger focus across the business on both profit and
cash generation. Within working capital, the reduction of both debtor
and stock days have released cash.

- interest costs are being brought down and the tax rate reduced.


The challenge is now to build on this.


Stephen Gleadle
Finance Director


Consolidated Profit and Loss Account
For the year ended 30 September 2001

Notes Before Exceptional Before Exceptional
exceptional items Exceptional items Restated
items (Note 2) Total items (Note 2)
2001 2001 2001 2000 2000 2000
#'000 #'000 #'000 #'000 #'000 #'000

Turnover
Continuing
operations 224,451 - 224,451 215,161 - 215,161

Discontinued
operations 13,747 - 13,747 20,750 - 20,750

Total
turnover 1 238,198 - 238,198 235,911 - 235,911


Cost of sales (176,249) (2,533) (178,782) (170,212) (3,500) (173,712)

Gross profit 61,949 (2,533) 59,416 65,699 (3,500) 62,199

Selling and (16,430) - (16,430) (15,583) - (15,583)
marketing
costs
Administration (41,274) (17,898) (59,172) (40,923) - (40,923)
expenses


Operating profit
(loss) before
goodwill
Continuing 5,807 (8,538) (2,731) 11,671 (3,048) 8,623
operations
Discontinued (1,202) - (1,202) (1,810) (452) (2,262)
operations


Operating profit
(loss) before
goodwill 4,605 (8,538) (3,933) 9,861 (3,500) 6,361
amortisation
Goodwill (360) - (360) (668) - (668)
amortisation

Goodwill - (11,893) (11,893) - - -
impairment



Operating
profit (loss)
Continuing 5,480 (20,431) (14,951) 11,042 (3,048) 7,994
operations
Discontinued (1,235) - (1,235) (1,849) (452) (2,301)
operations

Total 1 4,245 (20,431) (16,186) 9,193 (3,500) 5,693
operating
profit (loss)

Loss on 2 - (4,514) (4,514) - - -
disposal of
discontinued
operations

Profit (loss)
on ordinary
activities 4,245 (24,945) (20,700) 9,193 (3,500) 5,693
before
interest

Interest 225 - 225 241 - 241
receivable and
similar income
Interest (821) - (821) (980) - (980)
payable and
similar
charges

Profit (loss) on 3,649 (24,945) (21,296) 8,454 (3,500) 4,954
ordinary activities
before taxation
Tax on profit 3 (2,272) 1,193 (1,079) (4,014) - (4,014)
on ordinary
activities

Profit for the 1,377 (23,752) (22,375) 4,440 (3,500) 940
financial year

Earnings / 4
(loss) per
share
Adjusted basic 1.1p 3.1p
Basic (13.8p) 0.6p
Diluted (13.8p) 0.6p



Adjusted basic earnings per share has been calculated before exceptional
items, net of taxation and goodwill amortisation.

The accompanying notes are an integral part of this consolidated profit and
loss account.

Consolidated Statement of Total Recognised Gains and Losses

For the year ended 30 September 2001


Notes 2001 2000
#'000 #'000

(Loss) profit for the financial year (22,375) 940
Currency translation differences on foreign
currency net investments (221) (1,585)

Total recognised losses relating to the year
and since the last annual report and accounts (22,596) (645)






Consolidated Balance Sheet

30 September 2001


Restated
(Note 3)
2001 2000
#'000 #'000
Fixed assets
Intangible assets - 13,252

Tangible assets 36,910 44,768

36,910 58,020

Current assets
Stocks 2,988 4,274

Debtors 48,158 65,148
Cash at bank and in hand 12,993 12,975

64,139 82,397

Creditors: Amounts falling due within one year (66,250) (82,202)

Net current (liabilities) assets (2,111) 195


Total assets less current liabilities 34,799 58,215

Creditors: Amounts falling due after more than - (820)
one year

Net assets 34,799 57,395

Capital and reserves
Called-up share capital 1,625 1,625

Share premium account 94,578 94,578
Profit and loss account (61,404) (38,808)

Total shareholders' funds - all equity 34,799 57,395



Consolidated Cash Flow Statement

For the year ended 30 September 2001


2001 2000
Notes #'000 #'000

Net cash inflow from operating activities 5 14,711 23,362
Returns on investments and servicing of (596) (739)
finance
Taxation (3,233) (3,817)
Capital expenditure (11,459) (20,461)
Acquisitions and disposals 2,338 (3,071)

Net cash inflow (outflow) before financing 1,761 (4,726)

Financing (1,368) (791)

Increase (decrease) in cash in the year 393 (5,517)






Statement of accounting policies



The accounting policies adopted are consistent with those in the most recently
published set of annual financial statements, with the exception of the
adoption of FRS19, Deferred tax (see note 3).



The financial information set out above does not comprise the company's
statutory accounts. Statutory accounts for the previous financial year ended
30 September 2000, have been delivered to the Registrar of Companies. The
auditors' report on those accounts was unqualified and did not contain any
statement under section 237(2) or (3) of the Companies Act 1985.



The directors of Synstar Plc are responsible in accordance with the Listing
Rules of the Financial Services Authority and applicable United Kingdom
Accounting standards for preparing and issuing this preliminary announcement.
Arthur Andersen have given an unqualified opinion on the accounts for the year
ended 30 September 2001, which will be delivered to the Registrar of Companies
following the annual general meeting.






1. Segmental analysis

All turnover, profit before tax and net assets were attributable to the
Group's principal activities and to Group companies located, and operating,
within Europe.


2001
#'000
Continuing Discontinued Exceptional Total

1a Turnover by Destination
UK and Ireland 141,284 - - 141,284
France 16,377 - - 16,377
Germany 27,400 - - 27,400
Italy - 13,747 - 13,747
Other 39,390 - - 39,390
224,451 13,747 - 238,198
1b Class of business
Turnover

Computer services 205,187 13,747 - 218,934
Business continuity 19,264 - - 19,264
224,451 13,747 - 238,198
Operating profit

Computer services 6,475 (1,235) (6,610) (1,370)
Business continuity 2,005 - (697) 1,308
Central expenditure (3,000) - (13,124) (16,124)
5,480 (1,235) (20,431) (16,186)
Net Assets

Computer services 26,986
Business continuity 3,966
Unallocated 3,847
34,799

1c Geographical segment
Turnover

UK and Ireland 141,179 - - 141,179
Rest of Europe 83,272 13,747 - 97,019
224,451 13,747 - 238,198
Operating profit

UK and Ireland 7,119 - (1,519) 5,600
Rest of Europe 1,361 (1,235) (5,788) (5,662)
Central (3,000) - (13,124) (16,124)
5,480 (1,235) (20,431) (16,186)
Net assets

UK and Ireland 21,392
Rest of Europe 9,560
Unallocated 3,847
34,799



2000
#'000
Continuing Discontinued Exceptional Total
1a Turnover by Destination
UK and Ireland 137,814 - - 137,814
France 14,968 - - 14,968
Germany 25,027 - - 25,027
Italy - 20,750 - 20,750
Other 37,352 - - 37,352
215,161 20,750 - 235,911

1b Class of business
Turnover

Computer services 195,877 20,750 - 216,627
Business continuity 19,284 - - 19,284
215,161 20,750 - 235,911

Operating profit

Computer services 9,991 (1,849) (3,500) 4,642
Business continuity 3,841 - - 3,841
Central expenditure (2,790) - - (2,790)
11,042 (1,849) (3,500) 5,693

Net Assets

Computer services 50,048
Business continuity 4,787
Unallocated 2,560
57,395

1c Geographical segment
Turnover

UK and Ireland 137,671 - - 137,671
Rest of Europe 77,490 20,750 - 98,240
215,161 20,750 - 235,911

Operating profit

UK and Ireland 11,098 - (2,165) 8,933
Rest of Europe 2,734 (1,849) (1,335) (450)
Central (2,790) - - (2,790)
11,042 (1,849) (3,500) 5,693

Net assets

UK and Ireland 34,872
Rest of Europe 19,963
Unallocated 2,560
57,395


Unallocated net assets consist of cash, tax payable, and other centrally held
or managed assets and liabilities.



In relation to the discontinued operations, the profit and loss account
includes cost of sales of #11,889,000 (2000 - #17,831,000), gross profit of
#1,858,000 (2000 - #2,919,000), sales and marketing costs of #1,121,000 (2000 -
#1,550,000) and administration expenses of #1,972,000 (2000 - #3,218,000).


2. Exceptional items
2001 2000
#'000 #'000

Stock provision - 3,500

Restructuring 2,533 -


Total operating items charged to cost of 2,533 3,500
sales

Restructuring 6,005 -

Impairment of goodwill 11,893 -


Total operating items charged to 17,898 -
administration expenses


Total operating exceptional items 20,431 3,500

Loss on disposal of discontinued 4,514 -
operations


Total exceptional Items before tax 24,945 3,500





The group has undertaken a strategic review, which has led to a restructuring
programme to enable the group to respond faster and more creatively to the
needs of customers. This restructuring programme involves both a redundancy
and new hiring programme and is considered exceptional to the group's main
activities. The tax effect of the restructuring charge is a credit of #1.2m.
The tax credit in respect of exceptional items is low, primarily as a
substantial part of the exceptional item arose in countries, which were
already in a tax loss position.



On 8th May 2001, the group disposed of the share capital of Synstar Computer
Services SpA and its other Italian subsidiaries to Gruppo ATR Srl of Brescia,
Italy. This has resulted in an exceptional loss on disposal of #4.5m. The
results of the Italian subsidiaries have been disclosed as discontinued
activities. The group has also guaranteed that at least #5.8m of the #12.8m
outstanding trade debtor balance is recoverable. The tax effect of the loss on
disposal is #Nil.



An impairment review has been conducted of the carrying value of goodwill
within the group. Whilst there are excellent prospects for developing the
Networking Centre of Excellence as one of the group's core activities, through
further investment, the directors believe that the goodwill which can be
attributed to the existing Lancare business is permanently impaired.
Consequently there has been an exceptional write down in goodwill of #10.4m.
In addition, due to the current and historical trading performance in
Switzerland and Luxembourg a full write down of the #1m goodwill on CT
Consulting AG and #0.5m on Tecsys has also been made. Therefore the total
exceptional write down of goodwill in the period is #11.9m. The tax effect is
#Nil.



The exceptional charge of #3.5m in the year to 30 September 2000 relates to a
change in the method by which stock provisions are calculated by the group.
Previously the group had recognised a value for older stock lines relating to
customers' legacy systems. However, due to the ongoing pace of technological
changes and the difficulty of placing value on older little used stock lines,
such items were written off. The tax effect is #Nil.




3. Taxation



The decrease in the ongoing taxation rate before exceptional items reflects
the changing mix of performance between the various European subsidiaries.



The group's policy for accounting for deferred tax has changed to comply with
Financial Reporting Standard 19, Deferred tax. Previously, deferred tax was
only provided to the extent that timing differences were expected to reverse
in the future without being replaced. Deferred tax is now provided in respect
of all timing differences that have originated but not reversed at the balance
sheet date where transactions or events that result in an obligation to pay
more tax in the future or a right to pay less tax in the future have occurred
at the balance sheet date. The change in accounting policy has had no effect
on the profits reported for the year ended 30 September 2001, or the year
ended 30 September 2000, or the balance sheet at those dates.





4. Earnings (loss) per share



Basic earnings (loss) per share are calculated in accordance with FRS14
Earnings per Share, based on loss after tax of #22,375,000 (2000 - #940,000
profit) and 162,500,000 (2000 - 162,500,000) ordinary shares, being the
weighted average in issue during the year.



Fully diluted earnings per share is the basic earnings per share after
allowing for the dilutive effect of options in issue. The number of shares
used for the fully diluted calculation is 162,500,000 (2000 - 163,074,658).



The adjusted basic earnings per share information has been calculated before
exceptional costs, net of taxation and goodwill. The Directors believe this
additional measure provides a better indication of the underlying trends in
the business.



The calculations of the adjusted earnings per share are based on the following
profits:


2001 2000
#'000 #'000

Profit for the year for basic earnings per share (22,375) 940
Exceptional items

[citytraderboy] 29/11/2001 08:29

The Future - preparing for Phase 3

Our focus during the remainder of Phase 2 must be to successfully develop our
key customer relationships with cross selling. We are targeting an increase in
the proportion of customers where we deliver more than one service line, with
special emphasis on networking, desktop management and incremental services to
business continuity customers. Some reduction in the overall number of
customers will take place as we eliminate very small, loss making
relationships and focus on those with potential.


Our efforts to create an integrated service line portfolio will continue,
since this will provide us with the offerings to sell as second and third
entry services to our customers. The remainder of Phase 2 will therefore see
us investing in carefully selected services, such as remote network
management, a wider capability in data management project delivery and
enhancements to our VIDA offering. Investment in new services will focus on
those we can sell to our large existing customer bases, in business continuity
and computer services. Our sales effort will therefore concentrate on selling
from areas of strength into areas of investment.


Our growth during the next 12 months will come initially from these second and
third entry sales of existing services, albeit offset by the impact from
exiting some smaller customers. As a consequence, our revenue growth next year
may be below the growth of our market segment, yet it will provide for a much
more focused set of customer relationships. Margin improvement will be
assisted by a number of improvement programmes, including recovery plans for
the businesses in France and Switzerland. I make no apology for maintaining a
financial focus clearly on earnings and cash rather than revenue.


In the longer term, Synstar must be able to engage customers with multiple
service offerings from the outset. A business availability provider must be
able to win bigger, longer, more joined up deals, in addition to organic
growth of existing relationships. Phase 3 will therefore require us to develop
the capability to close larger deals, assessing more sophisticated commercial,
financial and risk sharing structures to complement our good position in
technical competence.


Whilst there is a need to take some more time over stabilisation in Phase 2,
acquisitions will play a part over time. When the time is right, these will
focus either upon building critical mass in mainland Europe, or the addition
of new service lines, which we can sell to our customer base.

[citytraderboy] 29/11/2001 08:27

Phase 2 is well under way

In the months since June, we have continued to make headway with our plans to
'stabilise, improve and invest' in the business. Our stated aim for this phase
was to return to acceptable financial performance. I believe that we have
already taken a number of important steps on the way to that goal:


1. Deliver profitably
2. Eliminate volatility
3. Streamline the balance sheet
4. Establish recovery plans for under performing businesses


It is in the nature of this phase of more measured progress that the emphasis
is upon sustained pressure to achieve long-term aims, rather than high profile
restructuring, disposals or acquisitions.

I am pleased to see progress on the many initiatives under way to bring this
phase to a successful conclusion in around June 2002.



The benefits of relationship management

The key change to our management structure is the creation of a 'relationship
manager' for each customer, who is now responsible for all aspects of our
service delivery, communication and long term growth. These new key managers
are entirely customer focused, and are measured by the profit delivered and
the growth they achieve within their portfolio of customers. This fosters a
different approach to our customer base - based on long term value creation
and improved performance. It is the key foundation for our strategy to become
the 'natural choice'.


I have been pleased by the way in which this change is already generating
benefits. We have seen long term receivables brought under much better control
as a result of clearer ownership of this issue by the relationship managers.
We have begun to see an increase in the flow of cross selling opportunities,
and a number of important successes, such as the increase in networking
opportunities - increasing the contracted business pipeline in this service
line by eight fold in as many months. This bodes well for future order entry.


This approach is new for Synstar, and for the staff involved. The development
of the skills, processes and new relationships is taking place during Phase 2,
and is the crucial focus of our attention.



Centres of Excellence - fostering our service lines

Supporting relationship managers in their approach to our customers are the
newly created Centres of Excellence. The aim is to pool our key technical
resources in five such Centres of Excellence, each owning a key part of our
service capability. Computer services, networking, business continuity, data
management and service (including our mobile engineering and logistics
capabilities) are now fully set up as virtual teams. Many of our best
technical people are now available to a much wider range of customers as a
result.


Centres of Excellence are responsible for the development of our service
offerings. As Phase 2 of our plan develops, investment in new service
offerings is being channelled in this way. During the past few months we have
already completed the rollout of our first new service offering. VIDA is the
name we use to describe our method for delivering a fully managed service to
desktop users. VIDA's combination of processes, tools and the right mix of
skills allows Synstar to manage the needs of a large number of desktop users
to very high service levels and considerable cost reductions. We already have
about 25,000 seats under VIDA management, an increase of 20% in the year. We
anticipate significant growth in this volume next year.


We have been prudent in our business continuity operations. Our investment in
fixed recovery centres and the computer assets to support all our business
continuity customers has increased considerably in the last few years. Our
focus is now on increasing the occupancy and utilisation rates of these
assets, rather than increasing the capacity. Although our sales teams have
been pursuing this objective diligently, we expect progress here to take some
time. I have been encouraged by some recent successes in Ireland, which have
increased use of assets in Dublin considerably. Progress in continental Europe
has been much slower, however.


Following the tragic events of September 11, our staff have worked tirelessly
to provide support to those of our customers who were affected, and we upheld
our unique record of always fulfilling our obligations to provide business
continuity. It remains to be seen what the longer-term implications of these
events will have on the market for these services in the future.

[citytraderboy] 29/11/2001 08:24

Phase 1 of our plan is completed

It was an aggressive plan to try to achieve a major restructuring of the
entire Group around a new structure in just six months. However this was
completed successfully, on time, within our budget of #8.5m, and achieved all
of its objectives, including an annual saving in overhead spend of #6m. Our
success is an enormous tribute to our staff, their willingness to accept
change and diligence in executing it.


This change was achieved without losing focus on our customers and maintaining
our service to them. Our customer satisfaction ratings, measured during June,
were as high as they always have been. As our results for the second half
show, it was also achieved whilst retaining a tight control on business
performance.


Phase 1 also included the important decision to dispose of our loss making
Italian subsidiary. Disposal was a crucial element, because of the release of
management time and cash, and the elimination of the volatility in results of
which it had so long been a cause. Our relationship with the new owners is now
well established, with several examples of reciprocal service provision
achieved.

[citytraderboy] 29/11/2001 08:22

Chief Executive's Review


Introduction

The Synstar that exists today is a very different company from the one I took
control of in January of this year. It retains all the same strengths - an
enviable customer list with probably the best customer satisfaction rating in
the industry, excellent staff and good geographical reach. The key difference
is a strategy with a clearer focus, and a plan and management team to execute
it. With a major change of pace, we are starting to see the fruits of the many
changes come through.


But there is much still to do and potential for further improvement.


My purpose in this review is to outline the considerable progress made to
date, and what there is still to come.


I make this statement against a background of market conditions that are tough
and likely to get tougher. However Synstar is in a good position to
capitalise on these conditions. Although price and margin pressure can be
expected as business conditions become more difficult for our customers,
Synstar's offering of high quality services at a competitive price will become
more compelling. The market segments in which we operate continue to show
annual growth rates of around 8%, with some areas such as networking services
growing considerably faster. We aim to exploit this continued demand to offset
economic pressures.


Our financial performance during the second half to 30 September generally
exceeded all our expectations. Our prime focus is firmly upon profit and cash
rather than revenue, and this is reflected in the areas of best performance.
Our business has generated #1.8m of cash during the year despite having to
finance #5.5 m for the restructuring programme. Operating profit before
goodwill amortisation and exceptionals has also exceeded expectations with a
second half outcome of #4.3m compared to the first half of #0.3m.


Strategic Review - being clear about what we want to be

We are very clear about our vision in developing the business. Synstar aims to
become our customers' natural choice for business availability services. This
means that we will focus predominantly upon our considerable existing customer
base to expand our scope of delivery. Our service lines all relate to the
support of IT infrastructure for business critical applications, forming a
well-organised suite of offerings to our customers. It is the exploitation of
this opportunity that is central to our strategy.


Synstar has embarked upon a three-year plan to deliver this strategy. In
setting out our plan in June of this year, I defined three phases to separate
out the key areas of activity.

* Phase 1 in the first six months up to June 2001, saw Synstar set out
its new strategy, align the management structure to fit this strategy, and
implement some major restructuring initiatives to start the change process.

* Phase 2, which I expect to last for 12 months until June 2002, sees a
period of stability designed to drive the benefits of the restructuring and
focus upon delivery of the strategy to existing customers. During this
period, we intend to undertake a number of projects to improve performance,
to be robust in cleaning up under-performing contracts or areas of
operation, and to invest in service line development.

* Phase 3, up to the end of 2003, is expected to show the full benefits
of restructuring, new strategy and service line investment coming through
in strong growth in earnings.

[citytraderboy] 29/11/2001 08:17

Chairman's Statement


I am pleased to report results that begin to reflect the achievements of the
new management team in a challenging year. Turnover for the period was
#238.2million (2000: #235.9 million) and operating profit before amortisation
of goodwill and exceptionals was #4.6 million (2000: #9.9 million). Adjusted
basic earnings per share were 1.1p (2000: 3.1p). While I do believe that
decisions made during the last 12 months will enable the Group to grow
steadily from here, these results do not yet fully reflect Synstar's
potential.


This year was an important turning point in a number of ways, most of which
relate to actions taken by our new chief executive, Steve Vaughan. During
2000, the Board decided that a new approach and a new management team were
needed to help the Group to build on its strong foundations and to reach its
full potential as a world-class IT services provider. Indeed, Synstar has
always had strong foundations - a set of perennially valid services, excellent
customers and customer relationships, a high proportion of contracted business
and highly professional and committed staff.


Since his appointment in January 2001 as chief executive, Steve Vaughan has
made a strong and positive impact. In a short space of time, he has analysed
Synstar's strengths, addressed the challenges facing it and developed a robust
three-year plan for the transformation of the business. Despite a challenging
business environment, the successful implementation of the first phase of this
plan has already been delivered, with a structure that is appropriate to
Synstar's size, geography and range of services, a blend of existing and new
first rate managers and a re-energised organisation.


We continue to have a blue-chip set of customers and we value them very
highly. Ranging across most sectors of the economy and most major countries
in Europe, our customers depend on the services we provide to them. If they
decide that we are the best at providing those services, we will get their
business. Satisfying their needs, therefore, is our prime objective and I am
proud that, time and again, Synstar is at the head of customer satisfaction
surveys.


That customer satisfaction is derived solely from the professional skills and
the commitment of our people. My pride in our customer satisfaction is really,
pride in them. As I meet our staff from all over Europe, I am always impressed
by their enthusiasm and by their desire to see Synstar win. I thank them for
all they have done for Synstar as we have gone through some challenging and
changing times. I am confident they will give us the support we need as we
face up to the equally challenging times ahead.


I would also like to thank my colleagues on the Board. We have an
exceptionally strong Board and their advice to me and to Steve has been of
inestimable value.


The Group now has in place a strong management team, an appropriate
organisation structure and an experienced Board. I look forward to Synstar
starting to deliver results that fulfil its promise by fully meeting its
customers' needs, by offering rewarding careers to its staff and by providing
improved performance and returns to its shareholders.


John Leighfield
Chairman

[citytraderboy] 29/11/2001 08:12

RNS Number:8818N
Synstar PLC
29 November 2001

29 November 2001

Synstar Plc

Board Changes

Synstar announces that Mr Alan Coles is retiring as Group Human Resources
Director, with effect from March 2002. Accordingly, Mr Coles will not offer
himself for re-election at the AGM in March 2002.

The Board wishes to thank Alan for his years of service to the Company and to
wish him every success in his retirement.

Julian McCarthy currently Vice-President Human Resources of Nortel Networks
will take over Alan's role from mid-January 2002. Julian covers Europe,
Middle East and Africa in his current role. He is multi-lingual and brings
substantial pan-European experience to Synstar.

He will become a member of the Group Operating Board, but not a Plc Director.

For further information please contact:

Synstar Plc
Christine Jones, Communications Manager 01344 662 744


Ends

[citytraderboy] 29/11/2001 08:09

RNS Number:8815N
Synstar PLC
29 November 2001


29 November 2001

Synstar Plc

'A strong foundation and a clear strategy to drive future growth'


Preliminary results for the year ended 30 September 2001


Highlights


* Results at top end of market forecasts

* Revitalised management team

* Transformation from country organisation into a genuine
pan-European customer focused offering

* New centres of excellence driving rollout of best
practice services

* Emphasis on profit and cash (rather than revenue) has
driven exit from low margin contracts

* Performance programmes in place to address loss making
operations

* 70% of revenue from long term contracts

* First phase of recovery plan delivered on time and
within budget - second phase on track to deliver by summer 2002



Results


* Turnover #238.2m (2000: #235.9m)

* Operating profit before goodwill amortisation and
exceptionals #4.6m (2000: #9.9m)

* Ungeared at 30 September 2001 with net cash balances of
#8.0m (2000: #6.1m)


Commenting on the results, Steve Vaughan, chief executive of Synstar Plc,
said:


"The last year has been about finding the things that weren't working, putting
them right or getting rid of them. We have stabilised the ship and made good
progress on improvement and investment. There are some more tough decisions
ahead of us, but I think we now have a strong foundation in place. Despite
the uncertain economic outlook, I believe that we are on the way to becoming a
world class Business Availability provider."



Ends.


There will be a presentation for analysts at 9.30am this morning at GCI
Financial, 80 Cannon Street, EC4N 6ER. Please call Geoff Callow on 020 7398
0800 if you would like to attend. The presentation slides will be available
on our website at www.synstar.com



For Further Information:

Synstar Plc: 020 7398 0800
Steve Vaughan / Stephen Gleadle thereafter 01344 662700



GCI Financial: 020 7398 0829
Roger Leboff / Geoff Callow


................................................................................

There was a lot more , but I didn't want to clog up this thread !

[citytraderboy] 26/11/2001 00:58

I agree that Synstar looks 1st class....great looking charts !

With results next week....

I can see £1.00 Plus , short term....

[citytraderboy] 25/11/2001 23:10

And with the results due on Thursday 29th November....these shares could
really run and run....

[citytraderboy] 25/11/2001 23:03

Take a look at www.bigcharts.com

Synstar looks very strong !

[citytraderboy] 25/11/2001 13:23

It’s testimony to the lack of interest in this stock that my last post here (March) has only made it back to page 2. On some BBs you're on page 2 within the hour!!

But I’m not here to talk about that.

My last post was pretty pessimistic on SYN’s short/medium term prospects: and although some of the macro-economic factors are still as relevant today - I sense this worm is for turning. To that effect I’m back in as of today.

Several factors prompted the decision to buy:

- the trading update in September clearly indicates that the upcoming results will be at the top end of expectations. Although there has been plenty of time for this to get priced in - I feel a good set of results will still benefit the shares further.

- the recent chart, the testing of 52-week highs, is also a good sign that this one ‘wants’ to head north - and will, given a good enough reason.

-despite recent rises the price can still be considered ‘bombed-out217;. a company with ~200m revenues deserves a higher market cap than 99m, even if bottom line profits have been squeezed.

-the restructuring program is bearing fruit and the upcoming results should indicate how much of a boost to the figures this will provide over the coming years (but there will be a short-term hit to the books)

-Sept 11th only focuses minds on the benefits of Business Continuity.

-I took a nasty hit on this when I sold - it’s payback time (literally)

Let's hope it get it right this time.

onoff
................................................................................

Taken from iii

................................................................................

[scroggy] 20/11/2001 00:33

This stock has a lot of movement to come, the price has moved
enough with only a relatively small amount of action.

[sham3001] 19/11/2001 12:04

Up 10p from my recommendation last week. Don't miss this one before it breaks out to a new year high.

[sham3001] 16/11/2001 11:40

1/2p away from the 52 week high. Dont miss this one.

[sham3001] 15/11/2001 11:16

Off to the races & nearing its 52 week high.

[sham3001] 15/11/2001 02:23

Unlike most of the stocks that gave back gains yesterday SYN firmly held onto a 10 per cent gain. Breaking free of the 50 pence zone that had provided resistance all year this implies a new trading range between 50 and the 80 -100 pence zone. SYN is above rising 150, 50 & 20 day moving averages (intermediate and short term trends are ALL UP) and within 10 pence of its year high. Relative strength is climbing nicely. Looking at the volume there appears to be a big buyer out there accumulating the stock daily and very little sells.

BUY SYN (50p) BEFORE IT MAKES A NEW YEAR HIGH AND ALL THE MOMENTUM PLAYERS JUMP ON BOARD