
Synnovia playing catch-up
Synnovia playing catch-up
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We are forecasting revenue growth of 9.7% and EPS growth of 18.6% for FY March 2020
Margin drivers
Synnovia operates through two divisions:
Industrial designs and manufactures ball-bearing assemblies, and also plastic consumables used in the manufacture of boxes and packaging, as well as plastic consumables used in the manufacture of hydraulic and industrial hoses.
Films develops and manufactures high strength plastic films for industrial packaging applications, and also packaging for the food industry and other applications.
During FY March 2019, Synnovia has benefitted from strong growth in the Industrial division, which is fundamentally a higher margin business than Films; however, this beneficial mix effect has been offset by project delays that have occurred in Films as it has been adding new capacity. The net effect has been little change to EBITDA margins for FY March 2019 versus 2018.
In FY March 2020 we are forecasting growth from both divisions, together with non-recurrence of the delays in Films, leading to an improvement in group EBITDA margin.
Quick facts: Synnovia PLC
Price: 130 GBX
Market: LSE
Market Cap: £50.69 m
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