Johnson, Runcorn linen giant, lifts H1 profit 46%

Shares of Runcorn-based workwear and textile firm Johnson Service Group (JSG) rose about 11% after it said its full year outturn is expected to be” slightly ahead of current market expectations” and the firm announced its intention to launch a further share buyback programme of up to £10 million.

Johnson reported that revenue increased by 22% to £215 million in the six months to June 30 and adjusted profit before taxation increased by 46.4% to £16.4 million.

An interim dividend of 0.9p per share will be paid, up from 0.8p.

Johnson Service Group CEO Peter Egan said: “The group’s strong performance during the first six months of the year, with a significant improvement in revenues, profits and margins, reflects the return to more normal and predictable trading patterns alongside proactive management of our cost base and improving production efficiencies.

So far this year, and in line with our targeted buy and build growth strategy, we have continued to develop our strong M&A pipeline through the acquisition of Regency and Celtic Linen. 

“We have also invested £12.9 million across the estate and committed to a new state-of-the-art site in the South-East to further improve operational efficiencies, increase capacity and support innovation.  

“Our intention to increase our bank facility from £85.0 million to £120.0 million in the coming months provides us with the ability to fund further investment opportunities that may arise.

The board was pleased to indicate an outlook for the year ahead of market expectations when the group released its pre-close trading update in mid-July. 

“Recognising the volumes processed over the busy summer months, improving efficiencies and a somewhat more predictable outlook on the cost base, together with our assumption that the trading environment remains unchanged, we expect the full year outturn to be slightly ahead of the guidance provided in our July trading update. 

“This improved outlook is in addition to the positive contribution expected from Celtic Linen.”