Johnson on target after cutting costs

DRY cleaning group Johnson Services said it is cutting overheads and investing in the business to beat tough trading conditions.

The company, based near Runcorn in Cheshire, has seen the downturn knock revenue at its High Street dry cleaning business as well as its linen and workwear hire service.

But in a pre-close trading statement for the half-year it said it was taking action to overcome the threat to its bottom line.

The dry cleaning business has cut costs of £100,000 a week while its workwear arm has won new business and bought the rental contracts and garments of a small competitor for £800,000 in a deal which should add £900,000 annual income.

Its Stalbridge Linen business, which supplies laundry and linen hire services for caterers, will break even in the first half, compared to an £800,000 loss last time.

And Johnson’s facilities management arm, SGP, has won a string of new contracts after suffering a dip in performance last year caused by the economic turbulence in the second half.

Group net debt is down to £75.5m from £78.5m in December while Johnson’s bank facilities stand at £104.5m.

In a statement the company said: “The board expects profit before tax (before intangibles amortisation and impairment) for the year as a whole to be satisfactory given the current economic climate.”