Synergis Holdings Limited ("Synergis" / the "Group") (stock code: 2340), a leading provider of comprehensive property and facility management services in Hong Kong, today announced its first annual results for the year ended 31 March 2004, following its successful listing on 9 October 2003.

During the review period, Synergis achieved significant growth in both turnover and net profit for the year ended 31st March 2004. Turnover increased by 61.9% over the same period in 2003, to HK $388 million. Operating profits increased by 33% to HK$38.8 million. Profit attributable to shareholders was HK$31.6 million, an increase of 39.4% over the corresponding period of 2003, outperforming the HK$29 million profit forecast contained in Synergis' prospectus for its initial public offering. Earnings per share increased by 16.8% to 11.1 HK cents per share. The Board of Directors has recommended a final dividend of three HK cents per share. Together with the interim dividend of two HK cents, total dividends for the reported period will amount to five HK cents.

Professor Woo Chia-Wei, Non-executive Chairman of Synergis, said, "Despite the challenging economic climate, we are delighted to see the rewarding results recorded. 2003/2004 has been a remarkable and banner year for Synergis. in October 2003, Synergis became the first and only property and facility management company to be listed on the Main Board of the Hong Kong Stock Exchange. The listing allowed us to raise funds for the strategic investments in its technological infrastructure and business expansion in the Mainland of China."

Commenting on the business operations, Mr C.H.Fan, Managing Director of Synergis, said," Synergis' turnover growth for FY2003/04 was primarily driven by (i) the success in securing all four Property Service Contracts ("PSC Contract") by the Housing Authority for its Batch 7 tender, which covered the management of 11 public rental estates with an aggregate of 31,094 residential units and 3,831 sq.m. in gross floor area (GFA) of commercial space, and (ii) the change of contract terms from Manager Remuneration contracts ("MR contracts") to Lump Sum contracts ("LS Contract") for several housing estates upon contract renewal with the Owners' Incorporation. The contract term of these four Batch 7 contracts are for three years (April 2003 to March 2006) and has an aggregate contract value of approximately HK$361 million.

Despite the relatively mature property management market in Hong Kong, Synergis is still able to continue to expand its portfolio by increasing the number of sites it manages from 170 sites to 199 sites, the number of residential units in Hong Kong from 124,230 units to 140,026 units, when comparing FY2002/03 to FY 2003/04.

With the successful listing and repositioning, Synergis has not only strengthened its market position in Hong Kong but also effectively set the stage for its expansion into the Mainland of China. Having established footholds in Beijing, Guangzhou and Shenzhen in FY02/03, Synergis formed a 50/50 joint venture with Shui On Group ("Shui On") in December 2003, focused exclusively on the provision of property and facility management services to the properties developed by Shui On in Shanghai. Since January 2004, Synergis has assumed management of projects with an aggregate floor area of approximately 400,000 square meters, including Shui On's showcase commercial development, Corporate Avenue, and its showcase luxury residential development, Lake Ville at Taipingqiao.

Therefore, taking into account of the sites managed in the Chinese Mainland, the number of managed sites by Synergis in Hong Kong and the Chinese Mainland would increase to 214 and the size of our total non-residential facilities portfolio would increase to 1.8 million square meters, as of 31 March 2004.

As Synergis expands its business, the Group realize the need to leverage technology in the delivery of our services and solutions to our customers. Therefore, in 2003, Synergis has allocated a significant portion of the proceeds (approximately HK$30 million) raised in the initial public offering to building a state-of-the-art technological infrastructure which is customized to suit our management infrastructure, including an enterprise resource planning system which integrates financial, procurement and human resources information. An important component of the technological infrastructure is the Synergis Customer Service Center, a 24-hour call center operating in conjunction with a computerized maintenance management system that commenced operations in March 2004. The infrastructural development will continue in the next few years and it is expected to enhance overall work efficiency.

Mr Fan continued," Looking ahead, we believe that competition will remain tough in view of the relatively mature property management industry. On the other hand, there is continued pressure on organizations in both the public and private sectors to reduce costs and to focus their resources on their core activities. Notwithstanding some short-term adjustments to the Housing Authority's outsourcing policy, we believe its long term outsourcing strategy would remain unchanged as it has stated explicitly in its 2002/03 Annual Report that it "will continue to make use of private sector resources to deliver high-quality Estate Maintenance and Management services for our residential and commercial tenants…." Outsourcing will continue to be a means for them to achieve that objective, thus providing growth opportunities for Synergis."

In addition, there are a number of regulatory proposals or developments which will, in fact, present opportunities for Synergis because of our management know-how and solid reputation. First is the Hong Kong Government's proposal to amend the Building Management Ordinance to facilitate private building owners in the management and maintenance of their properties. This amended regulatory environment should benefit high quality independent property management companies.

Second, the outbreak of Severe Acute Respiratory Syndrome in 2003 heightened public concern at the possible dire consequences if buildings not being properly maintained. In April 2004, the Housing, Planning and Lands Bureau issued a consultation paper on Building Management and Maintenance to seek the public's view on the Bureau's policy on integration of proper maintenance with effective management for those buildings without owners' corporations and no professional management services. According to the Consultation Paper, the number of buildings in this category is estimated to be 11,000. With the government's financing arrangement for owners and the proactive role it proposes to take in educating the public about the building owners' responsibilities, we believe the proposals, if implemented, will provide growth opportunities for professional property management companies in both property management and building maintenance.

While in the Chinese Mainland, our focus in the coming year will be on properly implementing our management systems and processes and on operational excellence in our existing joint ventures. We believe that once this foundation is solidly in place and given the scalability of our business, our growth in China will in the longer term outpace that of Hong Kong.

"Our corporate philosophy and commitment, to become 'The benchmark for the property and facility management industries in Asia' has proven to be highly successful. Fueled by our strong financial position, impressive portfolio and proven track record, we are confident that Synergis will continue its leadership position by capturing new market opportunities while maintaining a high level of customer satisfaction." Mr. Fan concluded.