Johnson Service Group brings back furloughed staff as volumes pick up

Listed textile specialist Johnson Service Group has brought back all staff from furlough as volumes are beginning to return.

In its Workwear division, volumes in June were some 98% of normal levels, up from 96% in March with some uptick in sales opportunities as businesses return to more normal trading patterns.

Volumes in its Hotel, Restaurant and Catering (HORECA) business in June were over 70% of normal compared to 30% for the last two weeks of April.

JSG said it had been “proactively planning” for the anticipated increase with customers but the trajectory of the increase in demand was steeper than expected across the industry.

It said: “Whilst volumes remain difficult to predict from week to week, we anticipate that volumes will see further increases as we enter the peak summer months.”

The rapid increase in volumes has resulted in all staff being brought back from furlough and it has recruited a significant number of employees across HORECA.

In a trading update the company said: “In common with many other businesses, the competition for labour has meant that costs of production have seen an increase.

“This, along with less than optimal productivity in the short term as volume levels build, will have a small impact on margin in the coming months.

“Maintaining our normal high service levels has been a challenge as volumes are scaling up rapidly.

“We have been actively working with our customers to resolve the challenges of shifting demand and service delivery has improved significantly in recent weeks.”

Net debt, excluding IFRS 16 liabilities, at the end of June 2021 was £8.8m.