Johnson Service Group continues post-Covid recovery

Textile service provider Johnson Service Group said in an update on Tuesday that revenue in the six months ended 30 June rose to £176.2m, from £99.6m a year earlier.

The AIM-traded firm said that growth reflected the continuing recovery in its hotels, restaurants and catering (HoReCa) business.

On an organic basis, revenue in the first half increased 73% on 2021 levels and, on the same basis, was 1.5% behind the pre-pandemic revenue posted in the first half of 2019.

Workwear revenue increased slightly to £66m from £64.5m, with the board anticipating a further increase in the second half.

HoReCa volumes in the second quarter were 91% of normal, with total revenue in the six months to 30 June rising to £110.2m from £35.1m year-on-year.

“We continue to see an encouraging pipeline of new business opportunities comprising both new sites from existing customers as well as new customers and we expect to install further customer locations in the coming months,” the JSG board said in its statement.

“Cost inflation, in respect of energy in particular, persists.

“We have continued to proactively trade in the energy market when appropriate such that 89% of our anticipated gas requirement and 50% of our anticipated electricity requirement for the remainder of this year, is now fixed at prices significantly below the current day ahead rate.”

JSG said it was continuing to secure and implement price increases across its customer base which, along with additional volume which would better use its labour resource and improve processing efficiency, would help offset cost inflation.

The firm said it would continue to take “appropriate mitigating actions” as necessary.

“Based on our assumption that volumes follow the normal seasonal pattern over the coming months and are not impacted by a reduction in discretionary spending, we expect the full year outturn to be in line with current market expectation.

“The board's current intention remains to re-commence dividend payments at the time of the interim results announcement on 1 September.”

At 1554 BST, shares in Johnson Service Group were up 3.27% at 107.4p.

Reporting by Josh White at Sharecast.com.