28th Apr 2008 11:05
Davis Service Group PLC28 April 2008 FOR IMMEDIATE RELEASE 28 April 2008 THE DAVIS SERVICE GROUP PLC Interim Management Statement at AGM "On track for another successful year" The Board of The Davis Service Group Plc (''the Group'') today issues itsinterim management statement at its AGM which covers the period for the threemonths to 31 March 2008. Overview In the first three months of 2008 the Group achieved double digit growth inrevenue and high single digit growth in operating profit compared with the sameperiod last year. We saw the continuation of last year's organic revenue growthtrends and benefited from some foreign exchange translation, as well as thecontribution from acquisitions. Interest costs were higher than last year,reflecting the acquisitions we made through 2007 and so far in 2008, and theeffect of foreign exchange. Divisional Performance Nordic The revenue trends we saw in our Nordic region in 2007 continued as expected.We saw margins similar to the same period last year in our core territories, andexpect to benefit from the increase in sales force in the second half of theyear. As previously announced we completed our acquisitions in the Baltic regionand we also made a number of further bolt-on acquisitions of workwear and matcompanies, which complement our existing market presence, in particular inSweden, for a total consideration of £17m. Continent The revenue growth trends in Holland and Poland continued as expected. OurGerman workwear business continues to progress from the strong foundation wehave built. German Healthcare will remain a challenging market for some time,though this represents a small part of our Group. We have progressed with plansfor a greenfield site in the Czech Republic, which is expected to be operationalin 2009. UK & Ireland Underlying hotel volumes have been stable in the first quarter and our pricingnegotiations to date have yielded above cost inflation increases. Healthcarevolumes were higher than last year, with stable pricing, while workwear hasbenefited from the contracts we acquired in 2007. Overall margins in coretextiles made a modest advance. Our decontamination and clinical solutionsbusinesses continued to make progress. We are pleased to announce that we haveachieved financial close on a 15 year contract for provision of surgicaldecontamination services for the Kent cluster on which we were previously namedpreferred bidder. We expect to commence operations under this contract in thefirst half of 2009. Financial Position We continue to maintain a strong balance sheet and our debt, much of which is atfixed rates, is committed for periods of up to ten years. Our current level ofborrowings reflects, inter alia, trading, acquisitions we have made and theimpact of foreign exchange movements. Other The Board expects to provide a pre-close trading update for the six months ended30 June 2008 on 25 June 2008. Summary The Group has made a good start to 2008 and our growth expectations for the yearremain on track. As stated in our full year results announcement of 29 February2008, we continue to expect a similar pattern to last year of stronger secondhalf growth. For further information contact: Davis Service Group Financial DynamicsRoger Dye, Chief Executive Richard MountainKevin Quinn, Finance Director Harriet KeenTelephone 020 7259 6663 Telephone 020 7269 7121 Note: 1. Davis Service Group is a focused European textile maintenancebusiness with leading positions in most of the countries in which it operates.As a focused business we are able to mobilise our resources to drive ourstrategies in our core area of expertise. 2. All financial information sourced from management accounts; operatingprofit and earnings per share stated before exceptional items and amortisationof customer contracts and intellectual property rights. 3. Statements made in this announcement that look forward in time orthat express management's beliefs, expectations or estimates regarding futureoccurrences are "forward-looking statements" within the meaning of the UnitedStates federal securities laws. These forward-looking statements reflect theGroup's current expectations concerning future events and actual results maydiffer materially from current expectations or historical results. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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