In the first half of the year ended March 31, 2004, Bracknell, UK-based Synstar reported a net loss of 15.3m pounds ($27.9m) compared to a profit of 5.09m pounds ($9.31m) in 2003, on total revenue that fell 3.3% to 107.8m pounds ($197.3m). However, taking into account discontinued operations, including the sale of its French business, revenue would have increased one perecent to 102.8m pounds ($188.1m). At the end of the period, the company’s cash position had declined to 12.8m pounds ($23.4m) from 19.2m pounds ($35.1m) in 2003.

Synstar has spent the past six months refocusing its business away from legacy services towards higher volume managed services deals to help bring about a revival in its fortunes, and for this it has spent some 2.5m pounds ($4.58m) of an expected 5m pounds ($9.15m) planned investment.

In January 2004, the company disposed of its French businesses SCS France SA, Atelsi SA and SBC SARL to Nisa Conseil for 200,000 pounds ($366,000). However, the impact on Synstar was far greater and resulted in it taking a 14.3m pound ($26.2m) charge, of which 8.5m pounds ($15.6m) was in cash.

Synstar said that in order to establish managed services as its principle business, it will need to create some 40 new business opportunities in 2004, of which it has already secured 16 deals each worth over 1m pounds ($1.83m) with the West Midlands Police, Compagnie Generale Geophysique, Fujitsu business, a UK retail bank, the Met Office, the UK Defence Communications Services Agency, and Galileo.

The company said its business continuity division is also progressing, having opened a second center in Luxembourg, expanded its Dublin facility to 640 seats, and signed deals with customers including the Bank of Bermuda.

In October 2003, the company signed its largest ever contract, worth 200m pounds ($366m) over seven years, to provide logistics services to Fujitsu Services, including providing computer parts, hardware planning and managed repair services, as well as strategic planning, bid support, warehousing, and distribution.

Synstar also has another significant maintenance contract with Computer Sciences Corp, and with PinkRoccade also currently negotiating outsourcing its maintenance services business, it is thought that Synstar could be interested in bidding.

Synstar said it expects to achieve revenue growth from continuing operations of between 8% and 10% in the full year due largely to growth in managed services, and expects this growth rate to continue in 2005.