Acquisitions help drive strong growth at Johnson Service Group

Johnson Service Group released a strong set of preliminary results for 2023 on Tuesday, with total revenue increasing 20.6% to reach £465.3m.

The AIM-traded firm said the growth was driven by a robust 16.3% organic revenue increase over 2022.

Adjusted EBITDA reached £131.5m with a margin of 28.3%, while adjusted operating profit increased to £50.5m from £41.2m.

Profit before tax landed at £37.6m, up from £30.2m in 2022, and the board increased the full-year dividend to 2.8p per share.

The company said it made significant investments throughout 2023, with £33m directed toward merger and acquisition activity.

Additionally, £31.1m was allocated to capital improvements across its facilities.

JSG completed a £10m share buyback programme in the second half of the year, returning a total of £29.8m to shareholders.

The company also bolstered its financial position during the period, by securing an increased bank facility of £120m, extending the tenure to August 2026.

Operationally, JSG said the hotel, restaurant and catering (HoReCa) sector performed strongly with increased service locations.

Its workwear segment boasted a customer retention level of 91%, alongside increased interest from prospective clients.

The acquisitions of Regency Laundry and Celtic Linen were said to be performing well, while facility improvements were supporting future growth, including a new HoReCa site in Crawley and a new depot to service the London hotel market.

Johnson Service Group was optimistic about the future, expecting to achieve 2024 adjusted operating profit in line with market expectations.

Chief executive officer Peter Egan expressed confidence in the company's position.

“We are pleased to report a strong performance for the year,” he said.

“Our scale, expertise, operational excellence, and strong balance sheet will allow the business to capitalise on future opportunities.”

At 1237 GMT, shares in Johnson Service Group were down 3.24% at 137.2p.

Reporting by Josh White for Sharecast.com.