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Davis trims expectations for 2008 and 2009

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Date: Friday 29 Aug 2008

LONDON (ShareCast) - Laundry and workwear group Davis Service has slightly downgraded expectations for 2008 and 2009, owing to higher interest changes and underperforming elements of its UK and German operations.

The company said the changing trading environment in UK hotels, continuing over-capacity in the German healthcare and higher interest costs are likely to act as a drag on earnings growth over the next two years.

In the first half of 2008 the company reported a 21% increase in revenue to £467.1m from £387.4m a year earlier, while pre-tax profit slipped 18% to £29.9m from £36.3m.

Underlying revenue growth, which excludes recent acquisitions and the impact of currency fluctuations, was 4%.

Revenue growth in the Nordic region was 26%, while continental Europe saw turnover improve by 19%. The UK & Ireland business grew revenue 17%.

The interim dividend has been lifted 7% to 6.5p from 6.1p.

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