Questor share tip: Berendsen growth accelerates This leverage was demonstrated in the company's results for the first six months of the year, when revenue increased by 7pc to £522m, and pre-tax profits jumped by 23pc to £47m. The interesting line in the update yesterday was that revenue growth had accelerated. Berendsen said revenue in the 11 months ended November had increased by 7pc compared with the same period last year. Just over half this increase was from currency effects and acquisitions made last year but more encouragingly about half of this increase was from existing business where sales accelerated in the second half of the year. Not only is Berendsen growing but it is also seeing the fastest growth in its operations with the highest profit margins. Offering a service that helps to keep facilities clean generated an operating margin of nearly 25pc at the half way stage, which is more than twice the lower-margin business of cleaning hotel linen that has an operating margin of 11pc. At the half-year stage the facility operations were growing revenue at 16pc year-on-year, compared with 3pc growth in UK flat linen. There is good news for income investors, as it is a highly cash-generative business. The company said it continues to convert more than 100pc of its profits into cash. That means the forecast full-year dividend of 26.5p, which offers a yield of 2.8pc, is more than two times covered by earnings and free cash flow. Analysts expect the dividend to grow by about 5pc each year for the next two years. Berendsen is using the rest of the strong cash generation to reduce its debt pile. Net debt was £514m at the end of 2011. In the past two years this has fallen by about £100m, with analysts expecting £414m by the end of this year. With lower debts, the interest charge is falling and this is further adding to profitability. With the current levels of growth, debts are expected to fall another £100m to about £315m in the next two years. The shares are currently trading on 16.2 times forecast 2013 earnings of 57.8p per share, falling to 15 times next year, which is not cheap for a fairly low growth company. However, the company only requires a similar steady performance next year to hit those targets, and on yesterday's update that doesn't look like too much of a stretch. Hold