* Says looking for buys at institutional cleaning, floor
* Full-year pretax profit 112.4 mln stg vs est. 133.27 mln
* Revenue rises 7 pct to 1.05 bln stg, in line with
* Sees foreign exchange rates weighing on 2014 results
* Shares rise as much as 8 pct
By Esha Vaish
Feb 28 Commercial laundry company Berendsen Plc
posted a 23 percent jump in full-year profit as
Workwear, its core brand, clocked higher margins on the back of
a pick-up in Germany and the UK.
The company, which also rents textile products such as linen
and uniforms, said it was looking for acquisitions to expand its
institutional cleaning and floor mats business.
Berendsen's shares rose as much as 8 percent, helping the
stock feature among the top percentage gainers on the FTSE 250
Midcap Index on Friday.
Berendsen said it duplicated the successful business model
it employed in Scandinavia in Germany and the UK, from where it
gets over half of its revenue.
The company, which counts Coca-Cola Europe, Tesco
and Airbus among its clients, has been fighting high
costs and has repeatedly assured investors that it would boost
Berendsen is looking at acquiring smaller rivals of its
high-margin facility business to expand in existing geographies,
Chief Executive Peter Ventress told Reuters.
The business accounts for over a fifth of the company's
"We have a big pipeline of potential bolt-on acquisitions
and you'll understand it's fairly opportunistic. These are
relatively small companies ... when people are willing and able
to sell, we tend to be their preferred destination," Ventress
The company spent over 30 million pounds ($50 million) on
acquisitions in the business in the past two years, he said.
Margins in Berendsen's Workwear unit, which rents and
launders uniforms for professionals such as doctors and
fire-fighters and accounts for a third of total sales, rose 210
basis points to 19.8 percent in 2013.
Berendsen reiterated that its margin would improve 10-30
basis points in 2014, after the company reported higher
full-year margins across businesses.
The company has over 250,000 contracts and a large chunk of
its business comes from renewals. However, no single customer
accounts for more than 1 percent of Berendsen's revenue.
Berendsen's shares, which have gained more than 50 percent
over the past year, were up 7.6 percent at 1069 pence at 1445
GMT on the London Stock Exchange.
The company also said it was negotiating pricing with its
textile suppliers and was looking to streamline its procurement
channels. Berendsen sources most of its textile from China,
Indonesia, Vietnam and Cambodia.
TAILWIND BECOMES HEADWIND
Berendsen's pretax profit jumped to 112.4 million pounds for
the year ended Dec. 31, also helped by beneficial foreign
exchange rates in 2013. Revenue rose 7 percent to 1.05 billion
Analysts on average had expected a pretax profit of 133.27
million pounds on revenue of 1.05 billion pounds, according to
Thomson Reuters I/B/E/S.
Results for the year earlier were restated following the
adoption of new accounting standards, Berendsen said.
The company said currencies it traded in - the euro, the
Danish krone and the Swedish krona - had weakened since the end
The company reports its earnings in sterling, which has
risen 1.29 percent against the euro since the
beginning of this year, cutting into earnings at a number of
The sterling has gained 1.33 percent against the Swedish
krona and 1.32 percent against the Danish krone
"Currency was a tailwind for us in 2013 and ... it will be a
headwind in 2014," Ventress said.