Strong margins boost laundry firm Berendsen's profit

(Reuters) - Commercial laundry company Berendsen Plc (BRSN.L) reported an 8 percent rise in first-half profit, helped by an increase in operating margins at its core Workwear and Facility businesses.

The company, which also rents linens and uniforms, said pretax profit rose to 50.6 million pounds in the six months ended June 30, from 46.7 million pounds a year earlier.

A strong pound and weakness in the European currencies Berendsen trades in dragged revenue down 1 percent to 517.3 million pounds. Excluding the impact of currency fluctuations, revenue grew 3 percent.

"Foreign exchange, investment and above the line one-off costs are masked in first-half by underlying operational improvement and market effectiveness," Oriel Securities analyst Hector Forsythe said in a note.

"Second-half will see smoother progress," he said.

Berendsen, which counts Coca-Cola Europe, Tesco Plc (TSCO.L) and Airbus Group NV (AIR.PA) among clients, in February cautioned that weakness in the euro, the Danish krone and the Swedish krona could weigh on its results.

The pound (GBP=) rose more than 3.3 percent against the dollar in the first six months of the year.

Operating margin across Berendsen's core businesses - Workwear, Facility and UK flat linen - rose to 18.5 percent in the first half, before amortisation of customer contracts, from 18.2 percent a year earlier.

Margins at Workwear, under which Berendsen launders and rents uniforms for customers such as fire-fighters and chefs, rose by 50 basis points to 18.2 percent.

In the Facility business, under which the company provides products such as floor mats and googles for medical centres, margins rose 80 basis points to 25.5 percent.

Berendsen raised its interim dividend to 9.5 pence per share from 8.8 pence.

Shares in the company were down 1.8 percent at 1070 pence in early trading on the London Stock Exchange.

(Reporting by Esha Vaish in Bangalore; Editing by Feroze Jamal)