Laundry and workwear rentals group Johnson Service (JSG:AIM) grew revenues 9.2% to £350.6m and adjusted pre-tax profit grew 13.4% to £48.2m for the year ended 31 December 2019. The shares were 11% ahead at 203p.
Chief executive Peter Agan commented, ‘we anticipate that the Group will deliver organic growth across both divisions, whilst continuing to focus on customer satisfaction and investment to optimise operational efficiencies. This, alongside our proven track record in identifying earnings enhancing acquisitions, gives us confidence for the future success of the Group.’
SOLID GROWTH
Both the Workwear and HORECA (Hotel, Restaurant and Catering) divisions achieved new business wins and maintained consistently high levels of customer satisfaction which resulted in high retention rates and organic growth of 6.5% compared with 7.8% in 2018.
Eight months of trading from South West Laundry, acquired in August 2018, a one-month contribution from Clacton-on-Sea based Fresh Linen and additional revenues from a small number of hospitality contracts acquired in January and July 2019 helped drive overall growth to 9.2%.
Adjusted operating profit was 13.4% higher at £57.5m on improved margins of 16.1% compared with 15.8% last year, as the group continues to squeeze extra efficiencies and operational improvements.
CORPORATE BRAND
The company is rolling-out a new corporate brand intended to link together the various local brands and extend national brand recognition, expected to take up to three years at minimal cost.
Currently the ‘Johnsons Workwear’ brand operates in the workwear market and within HORECA, ‘Stalbridge, ‘South West’ and ‘London Linen’ provides premium linen services to the restaurant, hospitality and corporate events market.
‘Bourne’, ‘Afonwen’, ‘PLS’ and ‘Fresh’ provide high volume hotel linen services and has been rebranded ‘Johnsons Hotel Linen’.
Strong trading and cash generation, up 28% to £120m helped offset the cost of acquisitions as well as significant investment in the business to support future growth. Net debt reduced from £98.4m to £87.7m.
The board is recommending a final dividend of 2.35p, taking the full-year 12.9% higher to 3.5p.
