Berendsen's quarterly revenues rise but operational issues take toll

Textile service company Berendsen’s quarterly revenue rose, but continued operational issues resulted in higher costs.

In an update for the quarter ended 30 September, the firm said revenue increased by 12.9%, compared to the same period last year, with underlying growth, at constant exchange rates but before acquisitions, up 2.4%.

Revenue for the first nine months rose 10.1%, with underlying growth of 2.8%.

The FTSE 250 company said the facility business built on the momentum from the first half of the year while the hospitality and healthcare business was affected by legacy flat linen operations.

Operating profit for the year is expected to be around £160m, up 4% from last year as during the summer there was operational instability which meant higher than expected costs to maintain customer service levels, while similar issues also affected some parts of the workwear business.

The company implemented the ‘Berendsen excellence strategy’ to addresses the operational issues as well as to improve customer focus, operational excellence, organisational capability, and effective use of capital.

The company will review the workforce, with particular focus in the short term on the UK operations to implement its superior operating model and enhance return on capital investment.

The company also made a small bolt-on acquisition in the facility business and sold a small hospitality business in the UK during the quarter.

Shares in Berendsen were down 14.22% to 1,056p at 0813 BST.