Johnson Service Group PLC on Tuesday said its first half results were in line with expectations, leaving the company ‘confident’ that overall 2024 margins will improve.
The Cheshire, England-based textile rental and services provider said pretax profit was £18.7 million in the six months that ended June 30, up 39% from £13.5 million a year before, as revenue increased by 14% to £244.1 million from £215.0 million.
Johnson Service declared an interim dividend of 1.3 pence, a 44% increase from 0.9 pence in the first half of 2023.
It also announced the £20.6 million acquisition of Empire Linen Service Ltd, which was finalised on Monday. This is expected to be ‘immediately earnings enhancing’ and will expand the company’s services into luxury hotels in London and the South East of England.
Customer retention has remained ‘strong’, with the company reporting numerous significant sales in the second quarter of 2024 that will help the remainder of the year.
After paying ‘significantly higher’ energy costs than it has experienced historically, Johnson Service has fixed the prices it will pay for the months ahead to maintain stability and certainty.
Chief Executive Officer Peter Egan said: ‘We remain focused on organic growth initiatives, optimising operational efficiencies through a combination of targeted capital investment and continuous improvement of our working practices.
‘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.’
Johnson Service gave an adjusted operating profit margin of 10.3%, in comparison to 10.9% in 2023, as well as an adjusted earnings before interest, taxation, depreciation and amortisation margin of 28.3%, which remained unchanged from last year.
Peel Hunt forecasted 2024 pretax profit for the company to be £54.1 million, in comparison to a market consensus of £54.0 million.
Johnson Service shares were down 0.3% to 158.60 pence each in London on Tuesday morning.
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