Runcorn-based workwear and linen rental company Johnson Service Group (JSG) said in a trading update on Friday it expects to announce full year results slightly ahead of market expectations.
JSG shares edged about 1% higher to 201p to give the firm a current stock market value of around £740 million.
Johnson supplies workwear and protective wear — clothing over 1.3 million people a week — and provides linen services for the hotel, catering and hospitality markets, processing over 500 million items a year.
“Our £10.0 million investment plan in our new high volume linen plant in Leeds remains on target for opening in the Spring of this year,” said JSG in its update.
“This will provide extra processing capacity ahead of the busy summer months.
“We remain positive about the future prospects for the business and we expect to announce full year results slightly ahead of market expectations.”
Johnson added: “On 30 November 2019 we completed the acquisition of the entire issued share capital of Fresh Linen Holdings Limited … for a cash consideration of £12.5 million …
“As reported in the audited, statutory accounts for the year ended 30 June 2019, Fresh generated revenue of £16.7 million and profit before taxation of £1.1 million …
“The business, which has some 340 employees and operates from its freehold main site in Clacton-on-Sea and through a transport distribution hub in Rainham, London, regularly supplies over 900,000 items of linen a week, predominantly to hotels and gym clubs in the hospitality market in the South East of England.
“The acquisition meets with our continuing growth strategy to increase the size and scale of our hospitality services in the UK and extend our geographical reach as well as further diversifying the customer profile base within the Johnsons Hotel Linen portfolio.
“This transaction demonstrates our ability to acquire good quality businesses offering complementary services to our existing locations and clients.
“We expect to announce the full year results on Monday 2 March 2020.”
JSG CEO Peter Egan said: “This has been a strong trading period despite the general uncertainty in the UK economy.
“We have achieved consistent organic growth and, with this latest acquisition in the South East, are expanding into a new geographical area where we are currently under represented for servicing our high volume linen customers.
“We are delighted that 2020 will see the opening of the new plant in Leeds providing further capacity and are confident that with these new geographies, our established client base and operational expertise, we will continue to deliver future organic growth.”