Johnson Service Group reports surge in revenue, earnings

7th Mar 2023 11:40

(Sharecast News) - Johnson Service Group reported a strong financial performance in its preliminary results on Tuesday, with total revenue increasing 42.1% year-on-year in 2022, to £385.7m.

The AIM-traded firm said organic revenue was 39% higher in the year ended 31 December when compared to 2021, and 2.7% when compared to 2019.

Its adjusted EBITDA totalled £104.9m - a significant increase from £67.9m in 2021, with a margin of 27.2% compared to 25.0% in the prior year.

The company's adjusted operating profit rose to £41.2m from £12.7m, and its operating profit rocketed to £33.3m from £8.4m.

Its adjusted profit before tax totalled £38.2 million, up from £9.4m in 2021, and its profit before tax increased to £30.3m from £5.1m.

The board declared a full-year dividend of 2.4p, up from nil in 2021, adding that it had a strong balance sheet and capacity for further investment.

Johnson Service Group also noted it was running an ongoing £27.5m share buyback programme, with £11.4m already deployed to date.

The board said it expected the company's results for 2023 to be in line with market expectations.

"The improved performance we are reporting today demonstrates the resilience of JSG's business model, operational expertise and strength of our relationships with our customers and business suppliers, alongside the hard work of our employees," said chief executive officer Peter Egan.

"We have invested £22.4 million in our sites to not only improve productivity and processes but also to attract and retain employees with enhanced working environments.

"Post the year end we supplemented our organic growth plans with the acquisition of a luxury hotel linen rental business, in line with our acquisition strategy, and the signing of a new lease to increase our capacity in the South East for hotels, restaurants and catering (HoReCa)."

Egan said the firm would continue to assess investment opportunities to provide supplementary quality services and earnings-enhancing outcomes.

"We are confident that the actions we have taken have placed the group in a favourable position as markets continue to recover.

"After considering the current economic environment, including the recent, and possibly further, increases in UK interest rates and the subsequent impact on our cost of borrowing, the board expects the result for the year to be in line with market expectations."

At 1119 GMT, shares in Johnson Service Group were up 1.59% at 115.2p.

Reporting by Josh White for Sharecast.com.