Textile rental shines for Johnson Service Group
JOHNSON Service Group, the Cheshire-based company behind the Johnson’s dry cleaning shops chain and three textile rental brands, has reported strong half year profits and said it expects to top forecasts for the full year.
Boosted by a four month contribution from the recently-acquired Bourne hotel linens business, total revenue in the six months to June 2014 was £101.6m. Adjusted operating profit increased by 25.3% to £9.4m (June 2013: £7.5m) and profit before tax rose 54.5% to £8.5m.
Announcing a 25% increase in interim dividend to 0.5p per share, chairman Paul Moody, said: “I am very pleased with the strong performance of the group in the first half of the year and expect the result for 2014 to be slightly ahead of current market expectations.
“The board is continuing to seek further acquisitions in Textile Rental and to invest in additional capacity at existing locations. The significant increase in the interim dividend reflects the board’s confidence in the business going forward.”
With trading challenging in the dry cleaning business – Johnson continues to close its poor performing stores – the group’s textile rental division has been the growth driver.
The division comprises Johnsons Apparelmaster which predominantly provides workwear rental and laundry services to all sectors of industry, Stalbridge Linen Services which provides premium linen services to the hospitality and corporate events market and Bourne Services Group which provides high volume hotel linen.
The division’s revenue increased by 10.1% to £74.4m and adjusted operating profit by 25.6% to £10.8m.
Revenue in the dry cleaning division, which has more than 300 outlets, fell from £28.5m to £27.2m and operating profits fell to £400,000 from £700,000 in 2013.
The company said it was looking to improve its reach and developing partnerships with other retailers was one strategy: “We are continuing to focus our efforts on developing new ways of reaching potential customers, and our partnership with Waitrose, offering dry cleaning through their Customer Service desk, is one example.
“In addition to the 321 (June 2013: 336) branches trading at the end of June there were a further 29 newly opened Waitrose locations. Additional Waitrose location openings are planned for the remainder of the year, improving the key driver of convenience for all customers.”
