Revenues rise, profits shrink for Johnson Service Group

8th Mar 2022 12:42

(Sharecast News) - Johnson Service Group reported total revenue of £271.4m in its preliminary results on Tuesday, up from £229.8m year-on-year, as a result of improving volumes, as it swung back to adjusted profit in the wake of the pandemic.

The AIM-traded workwear and textile service provider said its adjusted EBITDA totalled £67.9m for the 12 months ended 31 December, up from £53.6m in 2020, as its margin improved to 25% from 23.3%.

Its adjusted profit before tax was £9.4m, swinging from a loss of £16.8m, as returned to a profit before tax of £5.1m, compared to a loss of £32.1m in 2020.

Net debt, excluding IFRS 16 liabilities, totalled £22.3m at the end of the year, swinging from net cash of £6.6m at the end of 2020, which the board put down to increased sales and continuing capital investment.

Total net debt as at 31 December was £60.1m, widening from £33.6m.

As it had previously guided, Johnson Service Group was declaring no dividend for 2021, with the directors adding that the company's "strong" balance sheet gave it capacity for further investment.

"These results represent a solid performance from the group against the challenging background of the Covid-19 pandemic and its impact, particularly on the hospitality sector," said chief executive officer Peter Egan.

"We saw a strong recovery of HoReCa (hotels, restaurants, catering) volumes through the second half of 2021 up until the last two weeks of December when volumes fell.

"This reduction in December continued into the start of 2022, impacting both revenue and margins in the first quarter, although volumes in HoReCa have shown signs of recovery in recent weeks."

Egan said workwear volumes remained consistent throughout the year, recovering to pre-pandemic levels by the end of 2021.

"During the year we have continued to invest in our systems, sites, people and initiatives to expand our sales offering and maintain our high quality of service.

"With the strength and resilience of our teams, alongside the mitigating actions we continue to take, we anticipate that HoReCa volumes during 2022 will, in the absence of any further restrictions, increase towards 2019 levels.

"Cost pressures experienced in the final quarter are continuing and further mitigating actions are ongoing."

At 1225 GMT, shares in Johnson Service Group were down 4.75% at 116.40p.

Correction: This story has been updated from an earlier version to reflect the fact Johnson Service Group returned to profit in 2021.