Profits jump at streamlined Johnson

SLIMMED-down Johnson Service Group has reported a 52% surge in first half profits after strong performance from its textile rentals division and a turnaround by its dry cleaning shops.

The Preston Brook-based group said that the £32m deal to sell its facilities management business to a private equity firm had completed on August 7, allowing it to reduce debts and focus on textile services.

Despite a 1% fall in revenues in the six months to June 30 to £96.1m, adjusted bottom line profits were up 52.8% to £5.5m.

The company said its textile rental business had traded well in the period with last year’s acquisition of Cannon acquisition now fully integrated.

In dry cleaning a like-for-like sales increase of 3.4% was reported along with significant improvement in adjusted operating profit of £700,000, compared with a £100,000 operating loss last year.

Executive chairman John Talbot said he was pleased with the improvement in performance, which he said was the result of a number of strategic initiatives coming to fruition.

“The disposal of the FM activities represents a major step in the board’s strategy to refocus the group on our original core business of textile services and to reduce net debt.

“Our textile rental business performed strongly; the Cannon acquisition is now fully integrated and we see a major opportunity for continued expansion within textile rental.  

“I am also delighted that, following the major restructuring exercise announced 12 months ago, we are starting to see a significant improvement in performance in the dry cleaning business, both in terms of like-for-like growth and profitability.”

Reflecting the reduction in borrowings and the improved results AIM-listed Johnson increased its interim dividend by 11% to 0.4p per share.