The Bourne legacy boosts Johnson Service Group »
Johnson’s GreenEarth is launched at its Kirkby store, with staff Laura Bagshaw, Rachel Collett and Natalie Thompson
The expansion of its textile rental business will help dry cleaning and textile hire specialist Johnson Service Group beat forecasts in its annual results this year.
Preston Brook-based Johnson said the acquisition of textile rental business Bourne Service Group in March was immediately earnings enhancing, and it is in the market to buy up more targets to add to the volume.
The group announced a 5.7% increase in turnover for the six months to June 30, at £101.6m, while pre-tax profits of £6.4m were 45.5% better. Net debt of £31.7m was down from £34m in December, and the board is so confident about the group’s momentum it has announced a 25% increase in the interim dividend for shareholders, of 0.5p per share.
Non-executive chairman Paul Moody said: “I am very pleased with the strong performance of the group in the first half of the year and expect the result for 2014 to be slightly ahead of current market expectations.
“The board is continuing to seek further acquisitions in textile rental and to invest in additional capacity at existing locations.
“The significant increase in the interim dividend reflects the board’s confidence in the business going forward.”
Johnson, which was previously headquartered in Bootle, comprises a textile rental division and its dry cleaning business.
Textile rental includes Johnson Apparelmaster which provides workwear rental and laundry services to industry, and Stalbridge Linen Services, which offers a premium linen service to the hospitality and corporate events sector.
In March it acquired Lincolnshire-based Bourne Service Group which has opened up the high volume hotel linen market.
Textile rental revenue increased by 10.1% to £74.4m, contributing adjusted operating profits of £10.8m, which was 25.6% better, boosted by Bourne.
Dry cleaning has seen the closure of loss-making locations, but a move to opening customer service desks within the Waitrose supermarket chain.
Revenues were down from £28.5m to £27.2m, due to the closure of loss-making shops, and the adjusted operating profit fell from £700,000 to £400,000.
However, its GreenEarth environmentally friendly cleaning process is gaining momentum and the group has persuaded several high street fashion retailers to recommend cleaning of their garments in GreenEarth. Johnson said it hopes to see this appear on garment care labels in the future.
Chief financial officer Yvonne Monaghan welcomed the results today, saying: “They’re very positive – a nice healthy increase in profit and debt at a reasonable level.”
She said the Bourne acquisition has helped boost the textile rentals business: “Bourne is doing really well. We bought it at the right time and have added new business since we bought it, and it takes us into the volume hotel market which is doing really well in the UK.”
Referring to more potential acquisitions, she added: “There are quite a few out there. As and when we will have any success, it is not under our control. But there are a few potential candidates.”
Chief executive Chris Sander explained: “The vast majority of these businesses are family owned and normally third generation family that want to sell and move on. That is the typical kind of target.”
And Ms Monaghan also confirmed that the dry cleaning division’s link with Waitrose will be strengthened further: “Waitrose is a really positive move.
“It is the convenience factor for the customer and there should be double the number of Waitrose openings by the end of the year, to around 60 or 70.”