Johnson hails strong half year results
DRY cleaning to facilities management company Johnson Service Group hailed a ‘strong’ performance after a near 5% hike in profits.
The AIM-listed firm, which is based at Preston Brook, Cheshire and which also offers linen hire and laundry services to the hotels and hospitality sector, said all parts of the business had performed well in tough market conditions in the six months to the end of June.
Revenue in the period rose 3.8% to £117.3m while profits were up 4.8% to £6.5m from £6.2m a year ago. The interim dividend was hiked 22% to 0.33p per share.
Executive chairman John Talbot said: “Our Textile Rental division has had a strong first half year and has seen a return to growth from its existing customer base. Whilst the cost pressures of the first half are likely to continue, we remain confident of a satisfactory second half performance.
“The Dry Cleaning division performed well in a challenging consumer environment. We have made considerable investment in the business, underpinning the board’s confidence in the division for the future.”
Regarding the facilities management business SGP, he said it was seeing the benefit of investment made in people and infrastructure over the last two years, and that new contract wins are expected.
“The overall financial position of the group has continued to improve and we are confident that the group will perform well in the second half.”
Johnson said the textile rental division, which comprises of Johnsons Apparelmaster and Stalbridge, had exceeded expectations during the half year. Revenue was up 3% to £58m and adjusted operating profit increased by 1.3% to £7.7m.
Using energy efficient systems and equipment helped the division cut its electricity and gas usage by 6%, which helped it overcome rising energy, fuel and cotton prices.
The dry cleaning division operates under the brands Johnson Cleaners, London-based Jeeves of Belgravia, and Alex Reid, a major supplier to the dry cleaning sector.
Adjusted operating profit increased to £600,000 from £500,000 despite a 2.3% dip in revenue to £37.9m.
Johnsons said the tough market conditions had been caused by the rise in VAT to 20% and concerns over job security and rising inflation.
Revenues and operating profits in the facilities management division both saw healthy growth after the acquisition last year of several PFI contracts. Adjusted operating profit was 25% higher at £2m.
