Final Results - Operating Profit Up 35%

Synstar PLC
8 December 1999


                     SYNSTAR SEES OPERATING PROFIT UP 35%
                                       
Synstar Plc, today announced its preliminary results for the year ended 30th
September, 1999.

Highlights

    Turnover increased by 30% to £214m  (1998:  £164m)

    Operating profit increased by 35% to £12.8m  (1998:  £9.4m)

    Operating margin increased to 6% (1998: 5.7%)

    Orderbook increased by 30% to £228m  (1998:  £175m)

    Business Recovery seats increased by 64% to 1,754  (1998:  1,069)

    Adjusted basic EPS up to 4.5p (1998: 1.7p)

    Continued strong performance from the UK & Ireland and mainland Europe,
    including exceptional results from Belgium, France and Germany.

    Outstanding growth potential in the high-margin sector of Business
    Continuity, both in the UK and Europe.

Commenting on the results, Richard Ferr, Chief Executive of Synstar Plc,
said:

'The optimism we felt at the time of our listing on the London Stock Exchange
in March 1999 has been borne out by events, and we are poised to enter the new
century from positions of strength in most of our markets.'

For further information:

Synstar will be doing an analyst presentation at 11.30am at 'The Brewery',
Chiswell St., EC1 on December 8th. For further information please call Sally
Streeter at 020 7 398-0802 who will direct your call to:
Richard Ferr, Chief Executive or Roy Passaway, Group Finance Director.

For future enquiries:
SYNSTAR PLC  -  [phone]
Joanne King, Investor Relations Manager
[e-mail]

GCI FOCUS  -  020 7 398-0800
Rupert Ashe / Susy Streeter / Nick Lambert @gcifocus.co.uk

Chairman's Review

Results
In a year where the flotation consumed a lot of management effort, the
business produced a strong financial performance.

Our revenue increased by 30% to £214m (1998 : £164m), operating profit
increased by 35% to £12.8m (1998 : £9.4m) and the contractual order book
increased by 30% to £228m (1998 : £175m) and Business Continuity growth rates
were maintained (16.9% full year, 18.6% in second half).

In short, the figures show overall a strong performance from a high quality
business and looking forward, we continue to expect strong interest for our
services.


Transformation
The transformation, from being a newly created privately owned company into a
fully-fledged public company is now complete. The normal processes and
competencies of a public company are in place and functioning well.

Synstar is unusual - perhaps even unique - in being a pan-European,
independent, full computer services group. Our traditional market has remained
very strong through the year. The acquisition of the UK networks specialist
Lancare in September 1999 has also strengthened our abilities in the important
networking area and brought with it exciting e-commerce capabilities for
potential use across the whole of the group.

Synstar has shown itself capable of growing both organically and through
acquisition and is now in a position to capitalise on this.

Rapid Growth
The business continuity sector offers good opportunities for profitable
growth, especially in mainland Europe. We plan to open additional business
recovery centres in the coming year and we will seek opportunities to
strengthen our business continuity position by acquisition.

Although a number of companies in the overall IT sector have felt a slowdown
in the market because of the effect of Year 2000, in Synstar's sector no such
slowdown has been perceptible.

Partnership
Partnership becomes an increasingly important ingredient in strengthening the
group's position. The creation of some very valuable relationships with key
outsourcing providers has proved to be of great value in building the
business. Synstar's pan-European reach and independence from any one computer
manufacturer means that there may be significant joint opportunities with such
partners with little likelihood that conflicts of interest will arise.

Key Trends
Two particular trends are helping to strengthen the group's financial
position; more and more contracts are being signed on a longer-term basis; and
we are increasingly successful in cross selling between the computer services,
business continuity and data management businesses. Our strategy is focused on
reinforcing these trends.

We also intend to strengthen operations in all of our country markets to
ensure that they have both critical mass and the skills to advance further up
the value chain. Synstar has developed the capability to spread across all
countries the best practice that it develops in any one. Should problems
emerge in a country - as in any group they will do from time to time -this
enables management to put a recovery plan in place quickly.

The Mission
Looking ahead, the Board is pleased that Synstar offers services and addresses
markets and countries that show real potential for significant growth. Synstar
is skilled at delivering a combination of services on which businesses of
every type are becoming increasingly dependent as an inevitable consequence of
their adoption of the technologies of the new millennium.

Now, as a public company, Synstar has the opportunity and the capabilities to
fulfil its challenging and exciting mission, to become 'one of the five
largest European IT service providers - while increasing profitability'.

The Board

Planning for flotation gave us the opportunity to look at the structure and
strength of the Board. We were delighted to welcome to the Board as non-
executive directors, Ric Piper, Finance Director of W S Atkins plc, and Tony
Osbaldiston, Finance Director of FirstGroup plc. They add greatly to the
experience and wisdom available to the group.

There have also been changes among the executive members of the Board.

In October, we announced an important change of responsibilities with the
creation of the role of Chief Operating Officer, Steve Bolton, formerly
Managing Director for UK&I, was appointed to this new position in which he
will be responsible for all business operations and their results. We intend
that the change will enable our central support functions to more closely
support the mainland European businesses as these increase in size and
complexity. It will also facilitate the spreading of high quality revenue
growth programmes across mainland Europe.

Alan Coles, Synstar's Group HR Director, was also appointed to the Board in
October.  In a business, particularly a multi-skilled, pan-European one, in
which people issues are so critical, this will be of major help to the Board.

Joe Connolly has left the Board, and I would like to take this opportunity to
thank Joe for the great dedication he brought to helping create the Synstar of
today, particularly in Continental Europe.

As is almost invariably true in the IT industry, Synstar's success is based
entirely on the skill and commitment of our 2,873 people.  I would like to
thank them all for their tremendous contribution in what has been an extremely
stretching year.


Outlook

Following a very strong set of 1999 results, the Board looks forward to the
new millennium with enthusiasm and confidence.

One of the core strengths of Synstar is the fact that most of our revenue and
margin are derived from long-term service contracts.

We are seeing the benefits of last year's additions to our contract base in
full now, the Business Continuity pipeline is strong and we are closing good
levels of business.  The Computer Services pipeline is growing, we are closing
business with start dates slightly delayed beyond 1st January 2000.

As we anticipated there has been a slight slowdown in product sales and some
delay in network projects in the lead up to the millenium, however, our strong
contract position means we are confident that PBIT growth will meet
expectations.  The first half profits growth will be slightly higher in the UK
than Central Europe, but will re-balance in the second half.

Overall, for the full year, we are confident in our ability to meet current
market expectations.

John Leighfield, Chairman.
8th December, 1999.


Chief Executive's Review
Across the IT sector generally, the benefits of good first half results have
been offset by concerns over the effects of possible Year 2000 slowdowns.

When publishing our interim results we explained that given that the majority
of our business comes from long-term service contracts, we believed we were
unlikely to be materially affected.  This has to date proved to be correct.

We have seen evidence of customers not wishing to change service providers on
1st January 2000.  This is a decision we would support.  Start dates are being
moved forward or back.  We have also seen increased levels of interest in
Business Continuity services as the Year 2000 programmes increase business
awareness of their dependency on IT generally.

In Computer Services this interest is driven primarily by continued need for
service solutions to cope with the problems generated by complex Desktop
environments within large companies.  The current drive for e-commerce
capability is increasing this demand.

In Business Continuity, the 15% - 20% annual growth rates are generated from a
combination of increased reliance on IT availability, outsourcing activities
previously handled internally and investments opening up new areas such as
Call Centres and Print Shops.

The first half of  the financial year produced an excellent rate of new
customer wins for both of our divisions, Computer Services and Business
Continuity, accompanied by a welcome return to growth at market rates for the
latter.

In the second half, Computer Services continued to grow strongly, now fuelled
more by expansion of existing customer relationships than the accumulation of
new ones. Meanwhile Business Continuity began to show the benefits of our
increased investment and management focus and second half growth rates were
higher than first half.

Geographical Performance
Our UK and Ireland (UK&I) operations had a very strong first half for new
business wins, including GKN Westland Helicopters, the Royal Navy, HSBC and
MTV, and further extended that strong performance with continued expansion of
relationships with existing customers such as Centrica and Jaguar. Overall
UK&I sales were well ahead of plan for the year as a whole, with year on year
revenue growth of 20%.

Our acquisition of the UK-only networks specialist Lancare made on 9 September
1999 just before the year end did not significantly impact on the 1999 UK&I
results, but will have a full year effect in 2000.

In mainland Europe, we have had a fairly typical year, made up of extremely
encouraging performances in some countries, and solid results in others but
with disappointing outcomes in a couple of countries.

In Germany the Computer Services business has had an excellent year, bringing
on board important new customers (the largest of which being BHW) and
expanding its involvement with others (including DaimlerChrysler). The Data
Management business acquired as SIS in July 1998 has had an exceptionally good
year, contributing strongly to an above plan performance overall.

France too has given us another above plan revenue performance with a solid
contribution from Computer Services and an above plan result from the data
management and networking businesses, both of which were acquired as SIS in
July 1998. We are now a significant network service provider in France,
particularly to government and defence establishments.

Italy was one of our disappointments. Several major Italian public sector
customers have recently been privatised or part-privatised, prompting them to
embark upon aggressive cost saving programmes. The inevitable contraction of
our work with these organisations adversely affected revenues and margins in
the second half of the year. As a consequence we are re-sizing to restore
margins, but still expect growth next year.

Our other poor performer was Switzerland. Here a concerted and prolonged get
well plan is now beginning to show results. Meanwhile, Belgium has put in an
excellent 1999 performance, with some big new wins including KBC Bank and some
just as noteworthy contract expansions including Gnrale Bank. A poor
performer just three years ago, Belgium is now demonstrating very clearly
indeed just how we can in a very short time return a business to rapid growth
and improved margins by taking it into the new service area of complete
desktop management. We are seeking to spread this highly successful
reorientation programme to our Swiss and Italian businesses.

Divisional Performance
With overall revenue growth of 32%, Computer Services has had an extremely
good year. A combination of solid new contract sales performance, strong
additions to existing contracts in most countries and minimal contract
deletions has underpinned encouraging headline numbers.  Despite disappointing
Swiss and Italian performances, an operating profit growth rate of 35%, was a
very strong outcome overall.

The business recovery marketplace continues its own healthy growth trend and
we have maintained margins. The first half of the year saw a return to 15%
year-on-year growth rates for Business Continuity, with a slight acceleration
in the second half producing a full-year expansion of 17%.

We believe this is reward for our continued high level focus within the
business; we have increased the sales and marketing resource, increased
capital investment in products and business recovery centres, and we have
worked hard on cross-selling Business Continuity services to our large
Computer Services customers. This latter approach has resulted in recovery
contracts being signed for the first time with ITNet, Rover, Proximus and
Volvo, and has been particularly helpful where we have opened new business
recovery centres, as at Wellingborough and Dublin, by enabling us to sign our
first contract at the same time as opening the new facility.

We have increased our Business Recovery seats by 64% to 1,754.

Our People
We try never to lose sight of the simple truth that, as a company, our success
is built on the quality and commitment of our people. We have focused heavily
on staff development and training during 1999, helping our UK company to
achieve Investors in People status. The 15.7% (1998 : 19.6%) attrition rate
represents an encouraging improvement for the business overall, particularly
in the UK, where attrition rates dropped from 21.7% in 1998 to 13.9% in 1999.

At the start of the year we knew that we must attract high calibre people at
the right rate to be sure of meeting our revenue growth target. The headcount
numbers clearly reflect our continued ability to do this even in a very
competitive labour market: the staff total rose from 2,280 to 2,756 the
engineering resource was increased by 21% driven by the growth of the business
as a whole; the sales and marketing team has been expanded by 24% as part of
our deliberate policy of supporting organic growth.  All these figures exclude
the 117 people who joined us with the acquisition of Lancare.   The number of
people employed in areas other than Engineering, Sales and Marketing grew by
20% in the year.

The Future
The optimism we felt at the time of our listing on the London Stock Exchange
in March 1999 has been borne out by events, and we are poised to enter the new
century from positions of strength in most of our markets.

Richard Ferr, Chief Executive.
8th December, 1999.

Consolidated profit & loss account
For the year ended 30 September 1999

                                                 12 months     Statutory
                                                     to        accounts 
                                                30 September 
                                          1999      1998      1998
                                         £'000     £'000     £'000
Turnover                                 214,289    164,425   168,750
Cost of sales                           (151,595)  (114,912) (117,424)
Gross profit                              62,694     49,513    51,326
Selling and marketing costs              (15,514)   (11,264)  (11,608)
Administration expenses                  (34,414)   (28,826)  (29,946)
Exceptional item                            -         -        (2,000)
                                            
                                                         
Operating profit                         12,766      9,423      7,772
Interest receivable and similar             413        415        423
income
Interest payable and similar             (3,624)    (7,669)    (7,895)
charges
Exceptional interest charges             (1,461)        -          -
                                            
                                                         
Profit on ordinary activities             8,094      2,169        300
before taxation
Tax on profit on ordinary                (3,043)      (436)      (436)
activities
                                            
                                                         
Profit (loss) for the financial           5,051      1,733       (136)
period
                                            
                                                         
Earnings per share                                           
Adjusted basic                               4.5p       1.7p       1.8p
Basic                                        3.6p       1.8p     (0.1)p
Diluted                                      3.6p       1.7p     (0.1)p
                                            
                                                         
                                                              
Adjusted basic earnings per share has been calculated before exceptional items
and exceptional interest charges, net of taxation and goodwill amortised.

Statutory accounts to 30 September 1998 reflect a 53 week trading period.  The
results for the 12 months ended 30 September 1998 have been abridged from the
listing particulars of the Group dated 26 February 1999.

The results of the acquisition made during the year ended 30 September 1999
were not material to the Group.

Consolidated Statement of Total Recognised Gains and Losses
For the year ended 30 September 1999

                                                   12 months Statutory
                                                   to         accounts
                                                   30  September
                                         1999      1998      1998
                                         £'000     £'000     £'000
Profit (loss) for the financial period   5,051     1,733     (136)
Currency translation differences on                          
foreign currency net investments        (1,466)     (702)    (702)
                                            
                                                         
Total recognised gains and losses        3,585     1,031     (838)
relating to the period
                                            
Consolidated Balance Sheet
30 September 1999

                                                1999      1998
                                                £'000     £'000
Fixed assets                                              
Intangible assets                               12,657         -
Tangible assets                                 39,186    38,821
                                                  
                                                        
                                                51,843    38,821
                                                   
                                                        
Current assets                                            
Stocks                                           8,355     6,633
Debtors                                         62,200    54,410
Cash at bank and in hand                        16,502     7,321
                                                  
                                                        
                                                87,057    68,364
Creditors: Amounts falling due within          (78,924)  (67,889)
one year
                                                  
                                                        
Net current assets                               8,133       475
                                                  
                                                        
Total assets less current liabilities           59,976    39,296
Creditors: Amounts falling due after              (863)  (79,874)
more than one year
                                                  
                                                        
Net assets (liabilities)                        59,113   (40,578)
                                                  
                                                        
Capital and reserves                                      
Called-up share capital                          1,625         1
Share premium account                           94,578        95
Profit and loss account                        (37,090)  (40,674)
                                                  
                                                        
Total shareholders' funds - all equity          59,113   (40,578)
                                                  

Consolidated Cash Flow Statement
For the year ended 30 September, 1999



                                                  12 months  Statutory
                                                   to 30     accounts
                                                  September
                                         1999      1998       1998
                                         £'000     £'000      £'000
Net cash inflow from operating           25,873    21,238     21,587
activities
Returns on investments and               (2,873)   (5,103)    (5,103)
servicing of finance
Taxation                                 (1,709)     (568)      (568)
Capital expenditure                     (16,636)  (15,536)   (15,536)
Acquisitions and disposals              (10,234)   (5,311)   (75,740)
                                             
                                                          
Net cash outflow before                  (5,579)   (5,280)   (75,360)
financing
Financing                                16,653     5,167     80,040
                                              
                                                          
Increase (decrease) in cash in           11,074      (113)     4,680
the year
                                              
                                                           
Notes to the preliminary statements

Earnings per share

Basic earnings per share are calculated in accordance with FRS14 Earnings per
Share, based on profit after tax of £5,051,000 (1998 - £1,733,000 profit),
representing the retained profit for the year and 137,156,088 (1998 -
95,822,465) 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 exercise of warrants in the year.  The
number of shares used for the fully diluted calculation is 137,157,534 (1998 -
99,822,465).

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

Shareholder information

The financial information set out above does not constitute the company's
statutory accounts for the years ended 30 September, 1998 and 1999 but is
derived from those accounts.  Statutory accounts for 1998 have been delivered
to the registrar of companies, whereas those for 1999 will be delivered
following the company's annual general meeting.  The auditors have reported on
those accounts; their reports were unqualified and did not contain a statement
under section 237(2) or (3) of the Companies Act 1985.

A copy of the preliminary statement is being sent to all shareholders and
copies are available to the public from the registered office of the company:
Synstar House, 1 Bracknell Breeches, Old Bracknell Lane West, Bracknell,
Berkshire, RG12 7BW.

The Company's annual general meeting will be held at 10am on 15 February 2000.