JOHNSON Service Group chairman John Talbot is confident of a good second half after the dry cleaning to facilities management group returned to profit and boosted revenues in the first six months.

Revenues rose 3.8% to £117.3m and a pre-tax profit of £5.2m to June 30 compares with a £2.2m loss previously.

Net debt was also cut from £59.5m to £51m and the pension deficit shrank from £11.2m to £3.2m, giving the group the confidence to hike the interim dividend by 22% to 0.33p and consider further acquisitions following the purchase last year of several PFI contracts from the Jarvis group.

All three divisions traded well, with textile rental showing a 3% rise in revenues of £58m and a 1.3% improvement in adjusted operating profits of £7.7m.

Facilities management arm SGP, which controls more than £1bn of customer spend, achieved a 20.4% jump in revenues of £17.7m and a 25% surge in adjusted operating profits of £2m.

Dry cleaning, based in Prescot, incurred a 2.3% fall in revenues of £37.9m, probably due to the knock-on from the VAT increase to 20%, but saw adjusted operating profit improve slightly to £600,000.

The division also offers further promise with a popular new ‘drop and go’ laundry service offering a shirt folding or ironing option and expansion by its up-market Jeeves brand with a first opening outside London in Cheshire’s Alderley Edge.

Mr Talbot said: “Jeeves has always been a London brand, although we have franchises in one or two big cities around the world such as Hong Kong, New York, and in the Middle East, but there is a strong possibility we would open up other branches in other parts of the country.”

Two mobile dry cleaner ‘pods’ have also opened within Sainsbury stores which could be expanded in the future.

He said it is important the dry cleaning business improves its offer: “The drop and go service is an American concept. If we were doing the same business we were three years ago we would be suffering with the rest of the high street on a like-for-like comparison.”

Mr Talbot added: “We are fairly confident about the second half. We know there are pressures out there, but we are confident.”

And he said the reduction of debt to more “normal” levels of borrowing will now enable the group to consider further “bolt-on” opportunities after the Jarvis deal last year.

“We consider ourselves to have normal levels of debt and we have now got the facility to look at bolt-ons.”