Johnson Service Group (JSG), the UK textile rental services provider, has released a trading update for the year ended 31 December 2019 and reported “strong financial performance from continued organic growth” for the full year. Revenue for 2019 rose 9.2% to £350.6 million from £321.1m the year before.
Pretax profit climbed 15% to £38.1 million, with the adjusted figure rising 13% to £48.2 million.
The Cheshire-based Group reported organic growth of 6.5%.
“We have continued to deliver strong organic growth complemented by the impact of our recent acquisitions,” said CEO Peter Egan. “The combination of these has yielded another solid financial year with impressive growth in group revenues, operating profit and earnings per share.”
Both the workwear and HORECA (Hotel, Restaurant and Catering) divisions delivered high levels of new business wins and maintained consistently high levels of customer satisfaction scores, which in turn contributed to very high retention levels. The acquisition of Fresh Linen, a linen plant based in Clacton-on-Sea, was a welcome addition to the group’s coverage for high volume linen in the South East.
The rollout of the new Group wide corporate brand, which links together the various local brands and extends national brand recognition, is underway. This is expected to take up to three years to fully implement and the associated cost will not have a material impact on the reported earnings or cash flow of the Group over that period.
The total revenue for the Workwear division, which provides work clothing rental and laundry services to the food and industrial sectors, rose by 5.0% to £135.3 million.
Johnson Service's Horeca division reported a 12% increase in revenue to £215.3 million, with its Stalbridge, South West Laundry and London Linen brands delivering strong organic growth during 2019.
“The group's trading performance since the year end has been in line with management expectations,” added Egan. “We are looking forward to the opening of our new Leeds site which will bring further capacity on stream and are continuing to plan for investment in our other sites, to increase capacity even further.”
“We anticipate 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,” he added.