27th Feb 2015 07:59
LONDON (Alliance News) - Berendsen PLC Friday reported higher profit for 2014 as its offset a currency-related hit on its revenue by cutting costs and improving margins, and said it expects good underlying progress in 2015 although the strength of the pound will continue to weigh on its results.
The provider of workwear, linen and facility hygiene and cleaning products reported a pretax profit of GBP117.0 million for 2014, up from GBP112.4 million in 2013, as a drop in administrative expenses and finance costs offset a slight drop in revenue to GBP1.04 billion, from GBP1.05 billion, due to the strength of sterling weighing on its translated overseas sales.
It said revenue would have been up 3% if exchange rates had stayed constant, excluding the impact of acquisitions.
"Our reported results were adversely impacted by currency translation and, although we see this persisting, the board expects to achieve a further year of good underlying progress in 2015,'' Chairman Iain Ferguson said in a statement.
Its closely-watched adjusted operating profit, which excludes GBP21.5 million amortisation of customer contracts, was flat at GBP158.7 million, although it would have grown 6% if exchange rates had stayed the same. Its adjusted operating margin was up 20 basis points at actual rates, and 40 basis points at constant rates.
Berendsen's return on invested capital increased by 60 basis points to 9.9%, which it said was in line with its targets to deliver double-digit growth. Its free cash flow dropped 12% to GBP122.6 million.
It increased its full-year dividend to 30.0p, from 28.0p in 2013.
"As we anticipated, Facility was our fastest growing business line and we believe the opportunities for further growth are strong as a large proportion of the markets in which we operate are not yet outsourced. In addition, we have a pipeline of developments to our service lines, which we believe will be of value to many of our existing customers," the company said in its statement.
By Steve McGrath; [email protected]; @stevemcgrath1
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