Johnson Service Group PLC Trading Statement (3420T)
24 Noviembre 2021 - 1:00AM
UK Regulatory
TIDMJSG
RNS Number : 3420T
Johnson Service Group PLC
24 November 2021
24 November 2021
AIM: JSG
Johnson Service Group PLC
('JSG' or 'the Group')
Trading Update
"Outlook for the full year in line"
JSG, a leading UK textile services provider, today releases an
update on trading.
The Group has continued to trade in line with management
expectations in the period since we announced our half year results
in September and expects to report full year results in line with
the expectations referred to in our Interim Statement.
Revenue
Workwear volumes have remained similar to August, at 98% of
normal levels. Workwear revenue for the 10 months to 31 October
2021 was GBP107.1 million (October 2020: GBP107.6 million). Our
sales team had all returned from furlough by May and are gaining
momentum in winning new business, with a particular focus on new to
rental sales.
HORECA volumes have also remained at a similar level to August,
at over 80% of normal. Some of our markets, such as contract
catering and airport hotel locations, have not yet returned to
normal and continue to lag behind restaurants and hotels which
cater more for leisure travellers. HORECA revenue for the 10 months
to 31 October 2021 was GBP107.1 million (October 2020: GBP90.1
million) whilst organic revenue in the 4 months to 31 October 2021
was up 79.2% compared to 2020 and down 14.6% compared to 2019.
Cost Pressures
In line with all businesses across the UK we have seen
inflationary pressure on our cost base and are taking action to
mitigate the impact.
In terms of energy pricing, we are protected to a large extent
from the current volatility in gas prices with some 90% of our gas
supply at fixed prices for the final quarter of 2021 and over 80%
fixed throughout 2022, with reducing amounts fixed into 2023. We
are also continuing our investment into capital equipment which
both reduces energy usage and supports our ESG agenda.
We have reacted to the challenges of the labour market to ensure
that we have the correct level of resources to cope with the
current and expected demand over the coming months. Addressing this
has, however, had an impact on the cost of production.
Our focus on operational excellence means we are well placed to
address these challenges proactively without compromising our
market share opportunity. Our customers are, more than ever, aware
of the critical service that we provide to support their
business.
Investment
Our new Workwear plant in Exeter is now fully operational and
will provide additional processing capacity in the South.
Plans for the upgrading of the Bourne hotel linen plant, which
is our largest plant, have been finalised and work is now underway.
The anticipated cost of the project is GBP4.2 million and is
expected to be fully commissioned in the first half of 2022.
Northern Ireland
On 30 September 2021 we completed the acquisition of the entire
issued share capital of Lilliput (Dunmurry) Limited ('Lilliput')
for a cash consideration of GBP6.175 million on a debt free, cash
free basis and subject to an adjustment for normalised working
capital.
Lilliput, which has some 130 employees and operates from a
25,000 square foot leasehold processing facility based in Dunmurry,
Belfast, is the market leader within the Textile Services sector in
Northern Ireland. The business regularly supplies over 0.5 million
pieces per week to its customers, predominantly across the Hotel,
Restaurant and Catering (HORECA) markets but also services
Belfast's largest hospital.
This acquisition provides the Group with a presence in a
geographical area where we were not previously represented and
which offers further opportunity for growth. We are developing
plans to expand the capacity of the site in order to take advantage
of the expanding Northern Ireland hospitality market as well as
further healthcare opportunities.
Lilliput's pre-COVID annualised revenue, including the revenue
from customer contracts acquired from a competitor in 2020, was
some GBP7.3 million.
The acquisition provides the opportunity to further diversify
the customer profile base within the Group portfolio. Lilliput also
shares a number of common customers in both Northern and Southern
Ireland with the Group, which will help to strengthen our plans to
expand the business and to secure further work in the future.
Outlook
In the absence of any new Covid-19 restrictions affecting the
hospitality sector in the remainder of the year, we expect the
profit before taxation for the year to be in line with the market
expectations referred to in our September statement. Revenue is
expected to slightly out-perform offsetting the additional cost
pressures referred to above.
We anticipate further recovery of hospitality volumes into 2022
although it remains difficult to predict the exact timing.
ENQUIRIES
Johnson Service Group PLC
Peter Egan, CEO
Yvonne Monaghan, CFO
Tel: 020 3757 4981/4992 (on the day)
Tel: 01928 704 600 (thereafter)
Investec Investment Banking (NOMAD) Camarco (Financial PR)
David Flin Ginny Pulbrook
Carlton Nelson Rosie Driscoll
Virginia Bull Toby Strong
Tel: 020 7597 5970 Tel: 020 3757 4981/4992
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END
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