Johnson Service Group ups guidance after strong first half

5th Sep 2023 08:40

(Sharecast News) - Shares in Johnson Service Group rose on Tuesday after the textile rental company raised its full-year guidance for the second time in two months and announced a new £10m share buyback programme, after a strong first-half performance.

JSG, which provides workwear and protective wear, as well as linen for the hospitality industries, had announced back in July that full-year profits would be ahead of market expectations.

"Recognising the volumes processed over the busy summer months, improving efficiencies and a somewhat more predictable outlook on the cost base, together with our assumption that the trading environment remains unchanged, we expect the full-year outturn to be slightly ahead of the guidance provided in our July trading update," said chief executive Peter Egan.

The improved outlook was also bolstered by JSG's recent €31.5m acquisition of Celtic Linen, a leading supplier of textile rental services in Ireland, announced last week.

As disclosed in the detailed trading update in July, revenue for the six months to 30 June rose 22% year-on-year to £215m, while adjusted pre-tax profit increased 46% to £16.4m.

The company declared an interim dividend of 0.9p per share, up from 0.8p last year.

JSG has bought back £19.7m of shares since the start of the. year, and has returned £25.3m to shareholders over the past 12 months.

It said that, even these returns and recent investments, it still has "significant headroom" under its committed facilities, and has decided to launch a second share buyback programme for up to £10m for the period up until March 2024.

The stock was up 3% at 127.7p within the opening hour in London.