Johnson Service upbeat on FY26 progress despite HORECA slowdown

10th Jul 2026 07:11

(Sharecast News) - Textile services provider Johnson Service Group said on Friday that it still expects to deliver "another year of progress" in FY26, despite a drop in first‑half hotel, restaurant and catering (HORECA) revenues, as margin improvement and cost discipline continue to support performance.

Johnson Service said revenues for the six months ended 30 June were broadly unchanged at £258m, with workwear revenue up from £72.1m in FY25 to £74m and HORECA revenues easing from £185.4m to £184m amid ongoing weakness across UK and Irish hospitality. Organic revenues slipped 0.7%, with workwear up 2.6% and HORECA down 2%, though the firm expects normal summer seasonality to lift volumes in the second half.

The FTSE 250-listed firm stated pricing discipline remained in place across both divisions, with some churn offset by customers returning to the its service offering, while labour costs were tightly managed and targeted capital investment continued to drive operational efficiencies. JSG also highlighted strong visibility over energy costs, with the majority of FY26 electricity, gas and diesel usage already fixed or hedged.

Margins improved in the first half, keeping the group on track to achieve its at least 14% adjusted operating margin target for 2026, while net debt at June was around £190m, reflecting dividends, buybacks, working‑capital movements and capex, with leverage towards the lower end of Johnson's 1.0x-1.5x target range.

Looking ahead, Johnson Service said its strong balance sheet and cash‑generative model had positioned it to pursue earnings‑enhancing opportunities while continuing shareholder returns.

As of 0820 BST, Johnson Service shares were

Reporting by Iain Gilbert at Sharecast.com

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