- 1H margin up more than revenue
- Full-year profit target confirmed
- Buybacks rise to over £90 million
Textile and workwear rental firm Johnson Service Group (JSG) delivered a positive surprise with its half-year results in the shape of a further £25 million buyback to be launched ‘shortly’, sending its shares up as much as 20p or 14% to 158p.
The new buyback follows the completion of a previous £30 million repurchase programme and takes the total value of buybacks since 2022 to more than £90 million.
MARGIN EXPANSION
For the six months to the end of June, the group reported a 5.5% increase in revenue to £257 million driven by a 7.2% increase in the HORECA (hotels, restaurants and catering) division to £185 million.
The operating margin in HORECA improved to 12.1% from 10.6% a year earlier leading to a 22% increase in operating profit to £22.5 million.
The Workwear division experience slower revenue growth of 1.3% to £72 million, while operating profit rose 2% to £10.4 million with a margin of 14.4% against 14.3% a year earlier.
In terms of current trading, the firm said after a slow start to the summer HORECA volumes had ticked up in July and continued to improve while customer retention levels in Workwear remained high.
Meanwhile, input costs – in particular energy – remain ‘elevated’, but continue to fall as a percentage of revenue, and the firm has made further productivity gains to reduce overall costs.
Looking ahead, the group confirmed its 2025 operating profit guidance and set a new margin target of at least 14% for 2026 compared with 12.1% last year and 11.1% at the half-way stage this year.
WHAT DID THE CEO SAY?
Chief executive Peter Egan commented: ‘We have delivered further progress in the first half of 2025. With robust cash generation, we continue to have a disciplined approach to capital allocation and focus on delivering value to shareholders by driving efficiencies through ongoing investment across the estate and seeking out complementary acquisition opportunities.
‘Our continued focus on operational excellence and margin improvement has positioned us well to achieve our target of at least a 14% adjusted operating profit margin in 2026 and we are on track to meet full year adjusted operating profit in line with market expectations.’
