Disposal

Synstar PLC
07 January 2004




7 January 2004

                                  Synstar Plc
                           ('Synstar' or 'the Group')
                        Disposal of operations in France


In the announcement on 2 December 2003 of its preliminary results for the year
ended 30 September 2003, Synstar disclosed that it was in advanced negotiations
to sell its operations in France ('Synstar France').  Following the Workers'
Council giving an opinion on the disposal, Synstar today announces that it has
completed the sale of Synstar France to this subsidiary's management team.


Terms of the disposal

The consideration for the sale was a cash payment of £0.2 million. The net
assets at the time of sale were approximately £10.0 million. After legal,
redundancy and other costs, and the write-off of goodwill through the Group
profit and loss account of £3.1 million (previously written off to reserves),
the sale of Synstar France will result in a loss on disposal of approximately
£14.5 million. The cash effect of the sale is expected to be an outflow of
approximately £8.7 million.  In addition, a small number of Business Continuity
contracts managed by Synstar Belgium but executed in the main by Synstar's
french operations will be assigned to the newly independent Synstar France.


Benefits of this disposal to Synstar Plc

The disposal will bring an immediate and beneficial effect on the operating
performance of the Group.  Synstar France reported operating losses of £3.3
million in the year ended 30 September 2003 and, given the limited scope for
business development and cost reduction, a similar scale of loss could have been
expected in the current financial year.


Synstar France will join the pan-European 'Synstar Business Network' as a
financially sound and independent business, and continue as a local delivery
partner that uses our processes and is tightly bound into our delivery
infrastructure.


Background to the disposal

Synstar France has been a long-term loss making business.  Project and product
revenues sales have accounted for over 50% of its revenue streams, areas that
economic conditions have hit hard, and the customer base is less well focussed.
Cost reduction measures have been very difficult to address successfully in
France and experience has shown that this is even harder to undertake when the
business is part of an international Group.  In the year ended 30 September
2003, Synstar France reported turnover of £16.4 million (2002: £17.1 million)
and operating losses of £3.3 million (2002: an operating loss of £0.9 million).

As a result, the Board believes that the sale of Synstar France represents a
clean break from a loss making business that will benefit the Group both in
terms of improved operating performance and increased management focus on the
Group's continuing operations.




Steve Vaughan / Stephen Gleadle
Synstar Plc                                               Tel: [phone]


Edward Bridges / James Melville-Ross / Juliet Clarke
Financial Dynamics                                        Tel: [phone]





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