This forecast has clouded a better-than-expected first half performance from the Europe-wide operation, which saw revenues climb 21% to £467.1million from £387.4m in the corresponding six months of 2007, although the company’s adjusted pre-tax profits remained flat at £40.1m.

At Sunlight, which employs 9,000 people at 60 sites in the UK, operating profits rose by 15% to £18.1m. Its hotel business benefited in the first half from stronger demand and improved prices, but volumes have since declined by around 4% due to lower hotel occupancy.

Sunlight’s healthcare division saw revenues and profits rise as a result of new contract wins, further outsourcing by NHS Trusts and the continued emphasis on cleanliness and hygiene at NHS hospitals.

Overall profits for the continental region were up 4% at £12.9m, with the company’s Nordic region up by 14% to £23.1m.

Davis chairman Christopher Kemball says that there are further opportunities for the group’s Dutch and Polish businesses, which are growing well, and that the German workwear business could expect more expansion. The German healthcare businesses face a challenging time, given market over-capacity, but the group believes that it has acted to improve the performance of these businesses in the second half of the year.