The laundry specialist cleans up with an earlier acquisition

by Dan Coatsworth

The decision in 2007 to buy a clinical decontamination business has proved wise for laundry specialist Davis Service Group, after Kevin Lapwood at Seymour Pierce upgraded the stock from ‘hold’ to ‘buy’ after a major contract win.

Davis has secured a 15-year deal from the north west London cluster of hospitals, which Lapwood reckons to be worth £7 million a year.

He says there is a growing trend by the NHS to outsource all surgical instrument activities, which could create further business opportunities for Davis.

Commenting on the new deal, Lapwood said: ‘This is an important addition to Davis’s NHS business and is indicative of the deepening relationship between the two parties.’

Davis was hard hit after the 2005 London bombings, which caused a slowdown in its core hotel services business. It recently reported ‘high single-digit’ operating profit growth in the first three months of 2008 on the same period last year.