Dry cleaning and textiles company Johnson Service Group (JSG) is bolstering its return to textile services through the acquisition of hotel linen provider, Bourne Services, for £22m. Announced alongside these full-year figures, that will be part-funded through a placing (of 26.3m shares at 51p) which will raise £12.8m.
Since selling its facilities management division for £32m in August, management has focused on improving its textile services offering. Part of that has included a restructuring of its dry cleaning business and, by end-2013, Johnson was left with 334 branches - compared to 351 a year earlier. That helps explain the modest revenue slippage during 2013, while adjust for various reorganisation-related one-offs, and group pre-tax profit rose 25 per cent year-on-year to £13.4m. Johnson is now focused on textile rental, which provides workwear rental and laundry services, and the Bourne deal should enhance that focus further. The division made reasonable progress during the year, with revenue up £1.8m to £136m, while adjusted operating profit rose 7 per cent £19m.
Prior to these figures, and news of the Bourne deal, Investec Securities was expecting pre-tax profit of £14.9m for 2014, giving EPS of 4.1p (from £13.4m and 3.8p in 2013).
JOHNSON SERVICE GROUP (JSG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 53p | MARKET VALUE: | £139m | |
| TOUCH: | 52-54p | 12-MONTH HIGH: | 56p | LOW: 41p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 27p* | NET DEBT: | 35% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 236 | 20.6 | 6.1 | 0.75 |
| 2010 | 235 | 4.2 | 1.3 | 0.82 |
| 2011 | 234 | 13.5 | 4.1 | 1 |
| 2012 | 199 | -15.3 | -4.6 | 1.1 |
| 2013 | 194 | 12.2 | 3.8 | 1.21 |
| % change | -3 | - | - | +10 |
Ex-div: 16 Apr Payment: 16 May *Includes intangible assets of £55m, or 21p a share | ||||
