Textiles group preparing to ramp up activity as lockdown eases

Johnson Service Group is slowly seeing a recovery in its markets as lockdown measures continue to be lifted.

In a trading update ahead of its annual general meeting today, the Runcorn-based workwear and textiles group said: “As expected, trading in the first four months of the year has continued to be impacted by the various lockdown restrictions, although we are now beginning to see an increase in demand as restrictions are starting to ease.”

Workwear volumes in March were some 96% of normal levels and the group has seen a slight continuous improvement during April as more businesses were allowed to open.

Progress continues to be made on the fit-out of the new workwear plant in Exeter, which is on course for completion in the final quarter of this year.

In HORECA (Hotel, Restaurant and Catering), volumes in the first quarter were around 11% of normal.

But, the group said it has started to see an increase in activity within its customers as they begin to re-open their businesses in accordance with the various easing of restrictions.

During the past two weeks of April, volumes were approaching some 30% of normalised activity with further increases expected as the restrictions, particularly on hotel stays, are relaxed.

At the end of April, Johnson continued to have 1,450 of its employees on full or partial furlough. However, it expects this number to reduce significantly in the coming weeks as staff return to work in response to increasing volumes.

Today’s statement also confirmed that the group has started the commissioning of its new hotel linen plant in Leeds as it plans for increasing volumes.

The site is expected to be operational by May 17, coinciding with the anticipated further relaxation of lockdown restrictions in England, which will enable the transfer of work for Yorkshire-based customers that is currently processed in North Wales.

Factory locations that were mothballed over the winter months are also now operational, albeit with reduced headcount in line with current volumes.

The statement said: “We continue to be confident in our ability to be agile and responsive to increasing volumes from our customers as the hospitality market recovers over the coming months.

“Our strong balance sheet means that we are well positioned to continue to invest in the business to support our long-term growth prospects.”

As previously announced, Bill Shannon is to retire from the board at the conclusion of the AGM.

At the same time, Jock Lennox, who was appointed to the board on January 5, 2021, as an Independent non-executive director and chair designate, will become chair of the JSG board.

“The board would like to thank Bill for his significant input and counsel during his years as both a non-executive director and latterly as chairman.”