Johnson Service Group confident in recovery through rest of the year

Johnson Service Group said in an update on Wednesday that workwear volumes were remaining stable, leading to like-for-like revenue growth of more than 3% compared to the first quarter of 2021.

The AIM-traded firm, which was holding its annual general meeting, said that in hotels, restaurants and catering (HoReCa), the volumes in January and February were 70% and 85% of normal, respectively.

It said volumes improved further in March to 89% of normal, while like-for-like revenue in the month, compared to 2019, was up 1.2%.

Volumes continued to increase in the first half of April, averaging 91% of normal, it added.

“Our customers are expecting a strong summer season and we have plans in place to ensure that our processing capacity can meet this increasing demand,” the board said in its statement.

“In addition, there is an encouraging pipeline of new business opportunities comprising both new openings from existing customers as well as new customers.

“We are nearing the completion of the major capital investment projects in Belfast and at our largest linen plant in Bourne in line with those plans.”

JSG said inflationary pressures remained, but energy costs in particular had receded from the highs of early March.

About 87% of its expected gas requirement for the rest of the year was fixed at prices “significantly below” the current day-ahead rate.

“We have secured price increases across our customer base which will offset the cost inflation that we are experiencing in the current environment and we will continue to take appropriate mitigating actions as necessary.

“Volumes are continuing to improve to what we expect to be more predictable and normal levels.

“Reflecting this expectation, it is the board's current intention to re-commence dividend payments at the time of the Interim results announcement in September 2022.

“We remain confident in our medium and long-term growth prospects.”

At 1100 BST, shares in Johnson Service Group were up 7.29% at 111.8p.