City round-up: Johnson Service Group acquisition and results; Revolution Bars completes restructure; New non-exec directors at Ultimate Products

Runcorn-based workwear and hospitality industry textile business, Johnson Service Group, published its interim results and confirmed a £20.6m acquisition this morning (September 3).

Six month figures for the period to June 30, 2024, improved, with reported revenues rising 13.5% to £244.1m, and pre-tax profits jumping 38.5% to £18.7m. The dividend improves from 0.9p per share to 1.3p per share, reflecting the board’s confidence in the future.

The group has reported increasing new sales activity and a strengthening pipeline in both HORECA (Hotel, Restaurant and Catering) and Workwear during the six month period.

Energy costs reduced as a percentage of revenue, costs are largely fixed for the remainder of 2024.

The group’s new Crawley site is expected to commence processing in final quarter of 2024, and its Enfield depot is in operation to improve access to hotel customers in London and the South East.

The group has announced the acquisition of London-based Empire Linen Services yesterday (September 2), for £20.6m, on debt-free, cash-free basis and subject to normalised working capital.

Empire provides linen services to luxury hotels in London and the South East.  Revenue and profit before tax for the year ended June 30, 2023, as shown in the unaudited statutory accounts, were £10.9m and £0.9m, respectively. 

The revenue and profit before tax as shown in the management accounts for the year ended June 30, 2024 were £13.9m and £2.8m, respectively.

The business employs some 170 staff and operates from a 26,000 sq ft leasehold site in Tottenham. 

The transaction is expected to be immediately earnings enhancing and, in addition to collaboratively sharing best practice across the enlarged group, will complement, and allow Johnson Service Group to implement operational synergies with the Regency business acquired in 2023.

The group said its full year outturn for the current financial year, before the benefit from Empire, is expected to be in line with current market expectations.

Chief executive, Peter Egan, said: “The group is reporting a strong financial and operational performance for the period, having delivered a significant uplift in year-on-year profitability. 

“This result is testament to the resilience of our business model, the strength of our relationships with our customers and suppliers and the hard work of our employees.”

He added: “We remain focused on organic growth initiatives, optimising operational efficiencies through a combination of targeted capital investment and continuous improvement of our working practices whilst also continuing to expand our geographical coverage through the successful execution of earnings enhancing acquisitions, as demonstrated by the acquisition of Empire, announced today, which represents a further step in our strategy to expand the range and scale of services we offer.

“Whilst continuing to closely manage variable costs, our team has ensured that customer retention has remained strong.”

And he revealed: “We have had some significant independent and group sales wins during the second quarter of 2024 which will positively impact the remainder of the year and into 2025.

“We expect to exit 2024 with strong progression towards previous levels of adjusted operating margin and adjusted operating profit for the year, before the benefit from Empire, in line with current market expectations.”

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Revolution

Revolution Bars Group, a leading operator of premium bars and gastro pubs, trading mainly under the Revolution, Revolucion de Cuba and Peach Pubs brands, announces that completion of has completed its Fundraising and Restructuring Plan.

With a total of 1,267,768,705 new Ordinary Shares admitted to trading on AIM at 8am today (3 September 2024).

Directors of the Company have subscribed for new shares in the business, but none of them representing a stake over 1% .

In August Ashton-under-Lyne headquartered Revolution Bars had its restructuring plan approved by the court, meaning the company was able to reduce its property costs and extend its lending facilities.

A new slimmed down business consisting of 27 Revolution Bars, 15 Revolución de Cuba Bars, 22 Peach Pubs and one Founders & Co. site will be capable of adding “a significant annualised EBITDA improvement” of c. £3.8 million, the company said in a statement to the stock market this morning.

Following the deal a further 12 bars will close, although a spokesman for the company insisted this is “no more than originally stipulated”.

The alternative was a sale of the AIM-listed business, or a merger with another bar operator.

The restructure was also facilitated by a £12.5 million placing with new shareholders including entrepreneur Luke Johnson, turnaround investor Rebus and three existing shareholders.

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Christine Adshead

Oldham-based homeware brands group, Ultimate Products, has revealed the appointment to its board of two new Non-Executive Directors – Andrew Milne and José Carlos González-Hurtado – both with effect from October 28, 2024.

In addition, Jill Easterbrook has notified the board of her intention to step down as a Non-Executive Director on the same date. 

Andrew Milne has been CEO of AIM-listed Nichols, the Newton-le-Willows-based diversified soft drinks business and maker of the Vimto drink, since 2021, having joined Nichols as Commercial Director in 2013.

He was previously a Sales Director for Coca Cola Enterprises, prior to which he held a variety of commercial roles at GSK, after having started his career at Marks & Spencer.

He holds a BSc in Business and Technology from Sheffield Hallam University.

José Carlos is Senior Advisor to global private equity firm Advent International and to Roland Berger, an international management consultancy.

He is a member of the Advisory Board of Dichter & Neira, an international data and market research company, and until recently was an advisor to Mintec, a provider of global commodity price data and market intelligence.

He was previously President of International for Information Resources, Inc, a technology and data company, Group Chief Commercial Officer for international retailer Carrefour, and VP and Officer at Procter & Gamble, where he spent more than 20 years and has led a variety of global and regional businesses.

He holds an MBA and a Masters in Law (equivalent) from Universidad Pontificia Comillas (Madrid) and has lectured on Marketing and Business subjects in several universities in Spain and Israel.  

Christine Adshead, Chair of Ultimate Products, said: “Andrew brings with him an in-depth knowledge of the UK consumer goods landscape and a track record of success in a variety of commercial and management roles.

“José Carlos’s vast experience of running and advising businesses across Europe will be hugely additive to our own ambitious growth plans for that region.”

She added: “I would also like to thank Jill for her significant contribution to Ultimate Products in her four years on the board, and to wish her the very best for her future endeavours.”