Revenue growing but costs increasing for Johnson Service Group

4th May 2023 11:54

(Sharecast News) - Textiles specialist Johnson Service Group reported a 22% increase in revenue in the first four months of the year on Thursday, compared to the same period in 2022, which was still impacted by Covid-19.

The AIM-traded firm, which was holding its annual general meeting, said organic revenue growth for the period was 6.4% in workwear and 30.3% in hotels, restaurants and catering (HoReCa), which included the installation of 7,800 new rooms in the company's hotel linen business.

It said it was managing its cost base closely, and increased the proportion of expected use of gas and electricity at fixed prices to 85% and 87%, respectively, in the first half of 2023, and 74% and 68% in the second half.

However, the company said it expected energy costs to be a higher percentage of revenue this year, due to the expiration of its hedging benefits from 2022 and elevated average pricing.

In September, JSG announced a share buyback programme of up to £27.5m, which was ending on Thursday in line with its current buyback authority.

The firm said it had deployed £19.7m in 2023, in addition to the £5.6m deployed in 2022, bringing the total to £25.3m excluding expenses.

Its board said it would continue to review its capital allocation in line with the group's stated policy.

"Notwithstanding continuing cost pressures, we anticipate that, assuming the trading environment remains unchanged, we will report full year operating profit slightly ahead of current market expectations," the JSG board said in its statement.

At 1131 BST, shares in Johnson Service Group were up 0.5% at 121.8p.

Reporting by Josh White for Sharecast.com.