Berendsen's restructuring efforts are beginning to pay off. Strip out the cost of the shake-up and profit before tax grew a better-than-expected 15 per cent to £112m in 2011, and management think this year will be "slightly" ahead of forecasts, too. So, analysts at Investec Securities have nudged up their 2012 adjusted EPS estimates to 50.4p, from 48.4p last year.
Fears that a weaker UK jobs market would hit the workwear business appear unfounded. Exposure to less cyclical industries has helped, and chief executive Peter Ventress says the company is winning more business from first-time outsourcers. Revenue here grew 5 per cent to £286m and improved margins of 17.2 per cent meant underlying operating profit rose 7 per cent to £49.2m, driven largely by record volumes in Sweden and better margins in Denmark and Holland. UK growth was modest and Germany was disappointing, although revenues from a contract with the Berlin Fire Brigade will accelerate in 2012.
And, with a tighter grip on its higher-margin washroom and mat cleaning facility division, which ramped up profits by 23 per cent to £47.8m, management think this is where the real growth will come this year. Expect more acquisitions, too.
BERENDSEN (BRSN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 498p | MARKET VALUE: | £855.7m | |
| TOUCH: | 498-500p | 12-MONTH HIGH: | 569p | LOW: 402p |
| DIVIDEND YIELD: | 4.7% | PE RATIO: | 15 | |
| NET ASSET VALUE | 264p* | NET DEBT: | 112% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 822 | 78.7 | 37.1 | 19.4 |
| 2008 | 954 | 60.4 | 24.5 | 20.0 |
| 2009 | 971 | 61.7 | 26.6 | 20.0 |
| 2010 | 986 | 34.6 | 12.9 | 21.2 |
| 2011 | 992 | 79.3 | 33.8 | 23.4 |
| % change | +1 | +129 | +162 | +10 |
Ex-div: 11 Apr Payment: 4 May *Includes intangible assets of £496m, or 289p a share | ||||
