Synstar issues trading statement

Synstar has issued a trading statement to the London Stock Exchange to reassure the markets that restructuring, cost reduction and business development measures call running to plan.

The full, unedited, text of the statement is as follows:

Synstar, the pan-European IT services provider, will shortly enter its close period for the six month period ending 31 March 2004 and is therefore providing the following Trading Update.

Current trading continues in line with market expectations. The Board has been encouraged by the recent contract wins and extensions, which confirm the strategy of cross selling services to the existing customer base. The margin deterioration in lower added-value elements of the maintenance business has been in line with earlier expectations.
In December 2003, when issuing the Preliminary Results for the year ended 30
September 2003, we outlined our plans for Phase 4 and Phase 5 of the strategy to develop Synstar as a trusted infrastructure Managed Services provider. During the first six months of this financial year these plans have been executed in line with our expectations. The restructuring to re-align resources to develop
Managed Services business is progressing well. This indicates that the in-year targets for both the costs and benefits of this exercise, which form the core of
Phase 4, will be delivered.

As planned, a number of cost reduction and business development actions remain to be completed to meet the full year profit expectations. However the progress achieved during the first half indicates that these actions will complete to plan. The Board therefore confirms that full year expectations also remain in line with consensus forecasts.

Steve Vaughan, Chief Executive, commented: 'In December 2003, we outlined the next stage of our plan to develop Managed Services as the core profit stream of the business. This plan has required a considerable investment in time, effort and resources. I am pleased with the initial results of this investment. We are taking these actions to seize the opportunity for further business in Managed Services, and our future pipeline has developed in line with expectations. I believe that we are now well-positioned to deliver by year end our objective of repositioning Synstar away from those parts of our business affected most seriously by margin pressure, with a strong basis for a profitable future.'

•Date: 30th March 2004 •Region: UK/W.Europe •Type: Article •Topic: BC markets
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