Outsourcing the cleaning of uniforms and linen can free up time, space, staff and capital for companies of all sizes. It’s a service that Berendsen (BRSN) has turned into a billion-pound-a-year business across Europe - and one that keeps growing.
The industrial cleaner recorded organic revenue growth of 3 per cent in 2013, which was doubled by a few canny acquisitions. Thanks to a ruthless focus on cutting costs, improvements in efficiency and investments in centralizing procurement processes, Berendsen turned that single-digit revenue increase into healthy double-digit profit growth, with its operating margin rising 60 basis points to 15.1 per cent. Strong cash generation allowed the group to pay off another £75m of debt, taking net debt down to £389m. And return on invested capital increased by 80 basis points to 9.3 per cent.
Impressively, Berendsen was able to do this without substantial GDP growth across Europe. “Coming out of the downturn we’ve been able to grow, but we expect to see tailwinds pick up from the economic recovery”, says chief executive Peter Ventress. Broker RBC Capital expects revenue growth of 2 per cent in 2014, generating adjusted EPS of 62.7p, up from 58.2p in 2013.
BERENDSEN (BRSN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,019p | MARKET VALUE: | £ 1.8bn | |
| TOUCH: | 1,016-1,019p | 12-MONTH HIGH: | 1,019p | LOW: 675p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 305p* | NET DEBT: | 73% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 0.97 | 61.7 | 26.6 | 20.0 |
| 2010 | 0.99 | 34.6 | 12.9 | 21.2 |
| 2011 | 0.99 | 79.3 | 33.8 | 23.4 |
| 2012 (restated) | 0.99 | 91.7 | 41.3 | 25.5 |
| 2013 | 1.05 | 112 | 49.8 | 28.0 |
| % change | +6 | +22 | +21 | +10 |
Ex-div:09 Apr Payment:02 May *Includes intangible assets of £474m, or 275p a share | ||||
