BETTER-THAN-EXPECTED results in its textile division has given Runcorn- based Johnson Service Group optimism for the rest of the year.

Its interim results to June 30 revealed a fall in sales and profits, but chief executive John Talbot said he sees future growth.

Turnover fell from £117.1m to £113m and pre-tax profits of £5.9m last time slipped to a £2.2m loss after restructuring costs in the Prescot-based dry cleaning arm.

But, after stripping out exceptional costs, pre-tax profits showed a 17% increase to £6.2m.

Turnround measures at the Stalbridge business within textile rental, which supplies hotels, restaurants and caterers, are taking effect after it achieved a £700,000 adjusted operating profit compared with £29,000 in 2009 after slashing customer terminations by 32%.

Mr Talbot said the busier summer period should produce substantial increases in volumes.

He said: “Stalbridge was the part that got the group into trouble in the first place, but that is coming into profitability.”

He also sees growth in the facilities management arm SGP after the purchase of several PFI contracts from the administrators of Jarvis.

January’s heavy snow took its toll on the dry cleaning arm, virtually bringing trading to a standstill and costing about £600,000, Mr Talbot revealed.

The return of VAT to the 17.5% level also impacted on turnover, which fell from £1.3m to £500,000.

Twenty loss-making sites have been closed and staff relocated to nearby stores, reducing dry cleaning’s portfolio to about 470, including 330 offering its GreenEarth eco-friendly technology.

The group said it expects profitability at the division, including Johnson Cleaners and Jeeves of Belgravia, to improve in the second half as a result of the restructuring.

And referring to next January’s increase in VAT, finance director Yvonne Monaghan said: “Anything that takes away discretionary spending is not good, but the advantage is we know it is coming.”