Delivering clean sheets and work uniforms is not the stuff of tenbagger dreams, but Berendsen (BRSN) is determined to make the most out of the markets it serves. Chief executive James Drummond, a year into the job, has launched a complete overhaul of the group's business units and processes.
A reorganisation from country to business lines is complete, with new management teams now in place. And investment is being stepped up in workwear and products for sterile environments (cleanroom), which the group feels are the most attractive markets it operates in.
This investment did, however, take some of the shine off first-half results. A step up in capital expenditure knocked free cash flow down to £0.6m; a fraction of last year's £27m. There was no further improvement in the group's operating margin. And there was some disappointment on organic revenue growth, which came in at 3 per cent; that implied a slowdown from the first quarter's reported 3.6 per cent.
Nevertheless, the group maintained its expectation of "good underlying progress" this year. JPMorgan expects pre-tax profit of £151m for the full year, giving EPS of 67.4p, rising to £163m and 72.9p in 2017 (£135m and 60.3p in 2015).
| BERENDSEN (BRSN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,293p | MARKET VALUE: | £2.23bn | |
| TOUCH: | 1,292-1,294p | 12-MONTH HIGH: | 1,371p | LOW: 947p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 305p* | NET DEBT: | 83% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 501 | 48.5 | 21.5 | 10.0 |
| 2016 | 534 | 51.7 | 23.1 | 10.5 |
| % change | +7 | +7 | +7 | +5 |
Ex-div: 8 Sep Payment: 7 Oct *Includes intangible assets of £428m, or 248p a share | ||||
