News Column

Berendsen Half-Year Profit Up But Cautions On Sterling Strength

August 29, 2014

Hana Stewart-Smith

LONDON (Alliance News) - Berendsen PLC said Friday it expects to achieve a year of good underlying progress in line with its previous expectations, as it saw profit rise in the half year to end-June, although it cautioned on the strength of sterling.

The textile maintenance services company proposed an interim dividend of 9.5 pence, up from 8.8 pence.

Berendsen posted a pretax profit of GBP50.6 million, up from GBP46.7 million in the previous year, despite seeing revenue fall to GBP517.3 million from GBP521.5 million.

Revenue from its Workwear, Facility and Flat Linen operations outside of the UK was hit by the strength of sterling. On a constant currency basis and excluding acquisitions, revenue rose 3%.

The company's UK Flat Linen business saw revenues up 3%, boosted by new contract wins, price increases and higher underlying volumes in hotels.

In its Clinical Solutions and Decontamination business revenue rose 3%, boosted by growth in re-usable textiles and decontamination contracts offsetting lower sales of consumables and single use surgical drapes and gowns.

The company made a number of investments in the first half, further consolidating its plant network in the UK, which led to GBP1.2 million in costs relating to its plant closures. Berendsen's free cash flow reduced to GBP30.8 million from GBP50.3 million as a result of its investments. However, it expects to be able to convert 10% of its profits to cash for the year as a whole.

Berendsen noted that its reported results are likely to continue to be influenced by the strength of sterling, and noted that since the end of the first half it had seen a further weakening in the average rate of the European currencies it operates in.

Shares in Berendsen were trading down 2.2% at 1,066.28 pence Friday morning.

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Source: Alliance News

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