Shares in European textile service business Berendsen (LSE:BRSN) were up 2.7% this morning as the company reported Q3 trading in line with previous expectations.
Underlying revenue for the Group was up 3% at constant exchange rates compared with the equivalent period last year. However, reported revenue fell 3%.
An increase in underlying profit was driven by progress in operating margins in the Core Growth businesses, Workwear, Facility and UK Flat Linen. This resulted in a higher reported profit despite the negative currency impact.
Workwear, which accounted for 35% of operating profit in 2013, made good progress despite operating in soft markets. Facility also saw a good underlying increase in revenue through organic growth, while the Cleanroom business continued to excel over the quarter following its entry into the UK market through the acquisition of Micronclean Newbury.
The company also reported an increase in contracts for the Mats and Washroom business following a bolt-on acquisition in Poland. The details of the acquisition were not disclosed, but management noted that, including Mirconclean, the company expected a total combined annualised revenue of approximately £8m from the acquisitions.
The mature ‘Manage for Value’ businesses that focus on cash flow and margin efficiency, reported recovering revenue and profits from new contracts after a decline in the first half of the year.
The company said it moved closer to its target of converting 100% of profit after tax into free cash flow. As a result, net debt fell over the period. Management were pleased with the progress towards achieving strategic objectives and expected that, in spite of continuing currency impact, the company should perform in line with its previous expectations for the year.
