Strong first half performance from Runcorn-based Johnson Service Group
DRYCLEANING to textile hire business Johnson Service Group reported a 214% jump in pre-tax profits, falling debt and an 11% boost to its interim dividend today.
The Runcorn-based group saw revenues for the six months to June 30 fall 1% to £96.1m, due to the closure since 2012 of 124 of its poorly performing drycleaning stores in poor locations.
Pre-tax profits soared 214.3% to £4.4m and net debt fell from £58.5m to £53.6m.
However, the disposal of the group’s facilities management (FM) division after the reporting period for £32.2m has slashed debts, on a pro-forma basis, to £25.6m.
The group’s pension deficit has also reduced, from £14m in December, to £7.9m due to “significantly better than expected returns on asset investments”.
Textile rental, trading as Johnsons Apparelmaster and Stalbridge Linen Services, grew revenues by 5.6% to £67.6m and achieved an 11.7% increase in adjusted operating profit of £8.6m.
The group is now exploring acquisitions to bolster its textile business.
Drycleaning saw revenues fall from £33.1m to £28.5m due to the reduced estate, but an adjusted operating profit of £700,000 compared with a £100,000 loss previously.
The group said it is to embark on a major marketing drive emphasising the Green Earth environmentally-friendly system used by the stores.
Executive chairman John Talbot told Liverpool Post Business Daily today: “We are really pleased with the figures and the state of the company generally, which is now totally focused on its textile core and which is the way we have been heading for quite a while.”
He added: “Our main focus is on expanding the group and our textile business is looking for acquisitions.”
Regarding the drycleaning division he said: “We want to improve turnover on a store-by-store basis. By the end of the year every store will be using greener cleaning products and we will market that more aggressively.”
Looking forward he said: “There is a major opportunity for continued expansion within textile services based on a strong financial and operational platform.
“We are actively pursuing acquisitions within the broader textile rental arena and will seek to identify businesses which broaden our services and add value for shareholders.
“We are starting to see a strong performance in the drycleaning business and we are optimistic that this will ultimately be enhanced by the proposed investment in a national marketing campaign.
“I am very pleased with the strong performance of the group in the first half of the year and anticipate the results for 2013 to be in line with expectations.”