Johnson to restore dividends; shares up 8%

Shares of Runcorn-based workwear and textile firm Johnson Service Group (JSG) rose about 8% on Wednesday after it published a positive trading statement for its AGM saying its volumes continue to improve and it intends to re-commence dividends in September 2022.

“Workwear volumes are remaining stable leading to like-for-like revenue growth in excess of 3% compared to the first quarter of 2021,” said Johnson.

“In HORECA (hotel, restaurant and catering), as previously stated, the volumes in January and February were 70% and 85%, respectively, of normal.  

“Volumes improved further in March to 89% of normal whilst 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. 

“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. 

“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.

Inflationary pressures remain but energy costs, in particular, have currently receded from the highs of early March.

“Some 87% of our anticipated gas requirement for the remainder of this year is 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.”