Berendsen Plc (>> Berendsen), the British laundry services group which is to be bought by French peer Elis SA (>> Elis), said first-half profit fell 5.6 percent, as challenging conditions across the UK squeezed margins.
The workwear and hygiene company said operating margin shrunk to 11.5 percent in the first half ended June 30, from 13.2 percent a year earlier.
Berendsen has been trying to improve margins by reorganising its business and installing new processes and controls to improve operations in parts of its domestic business.
Berendsen said its core workwear brand, which launders uniforms for professionals such as doctors and fire-fighters, saw underlying revenue growth of 3 percent with growth in Europe offseting a decline in the UK.
Revenue grew 7.8 percent to 575.1 million pounds in the period, helped by growth across all its units - workwear, facility, healthcare and hospitality.
The company also forecast adjusted operating profit of about 150 million pounds for 2017. In comparison, profit last year was 161 million pounds.
The company's pretax profit fell to 56.8 million pounds ($74 million) in the six months, from 60.2 million pounds a year ago.
Elis managed to finally win Berendsen's support for its takeover plans in June, after increasing its bid by 6.4 percent to value the group at 2.2 billion pounds.
(Reporting by Justin George Varghese and Esha Vaish in Bengaluru; Editing by Sunil Nair)