Questor share tip: Berendsen will clean up once the economy recovers Berendsen, formerly Davis Service Group, provides textile cleaning services in the UK and Nordic countries. Its strategy should lead to significant margin improvement, so last week's trading update was a welcome confirmation that all is on track. Berendsen expects to deliver an increase in operating margin at the half year and, in spite of currency headwinds and the higher interest costs from last year's refinancing, profit before tax is expected to be moderately ahead of the equivalent period of last year. Expectations are for a 2pc rise in profits stripping out currency movements. Growth is expected to be flat with currency moves included. Drivers of group earnings include the European manufacturing cycle and increased usage of hotels in the UK. Obviously, any acceleration of the crisis in Europe will hit its earnings. However, conversely, there is also leverage to any market recovery. The new focus is on higher margin business such as its facility unit, which saw margins of 23pc last year. In the facilities unit are its mat and washroom operations, including higher growth Norwegian, Polish and Czech business units and its cleanroom operations which focus on the pharmaceutical and hi-tech sectors. The valuation does not look undemanding, with the shares trading on a December 2012 multiple of 10.4 falling to just 9.3 in 2013. The valuation is also supported by its yield, which currently stands at a prospective 4.8pc rising to 5pc. Last tipped as a buy on April 29 at 520½p, the shares are 2pc below this level compared with a FTSE 100 down 2pc. The shares remain a buy for medium-term margin improvement and long-term growth.