JOHNSON Service Group predicted pre-tax profits will be “satisfactory” given the current economic climate.

The dry cleaning to workwear hire group admitted that the tough trading conditions in the first half of its financial year had impacted its three divisions in different ways.

A pre-close statement by the Runcorn-based group revealed that its Johnson dry cleaning arm, headquartered in Prescot, suffered a modest fall in overall sales.

But savings have cut costs by about £100,000 a week, which will reduce the impact on profits.

And revenues from its environmentally-friendly GreenEarth cleaning stores remain encouraging, the statement said.

Meanwhile, textile rental revenues have suffered from the closure of firms who have succumbed to the recession, the firm revealed.

Consequently, Johnsons Apparelmaster will see a fall in turnover, but the business continues to win new clients and the board said the rate of customer cutbacks, which peaked in April, is slowing, and the business is expected to continue to gain market share.

Also, a small independent competitor was acquired at the end of the first quarter at a cost of £800,000, but which will add about £900,000 to annual revenues.

The turnround of the Stalbridge Linen arm continues and is expected to break even in the first half – compared with a previous £800,000 loss – and return to profitability by the end of the year.

Johnson’s facilities management division has also suffered as a result of uncertainties within the UK economy and the reluctance of clients to invest in project work.

However, contracts signed with Pizza Hut, KFC, Wolseley and Monsoon Accessorize at the end of 2008 have “more than compensated for any contract losses, most of which have been due to insolvencies”.

These contracts are expected to show an improvement in half-year results for the SGP facilities management division.

And a run of contract wins has continued in the first half of 2009, as companies seek to reduce costs by outsourcing property management.

One high- profile win has been pubs group Punch Taverns, to provide maintenance for its managed and leased pub estates and its headquarters.

Group debt is expected to fall to £75.5m by the end of June, compared with £118.1m a year ago.

Directors expect trading to remain “challenging” throughout 2009, but added: “The board expects profit to be satisfactory.”