At the beginning of this year textile company Johnson Service Group (JSG) announced a restructuring of its dry-cleaning business. The new focus is on providing customers with "highly convenient collection and delivery points". This new strategy included a partnership with Waitrose, whereby dry-cleaning services are now offered at the retailer's customer service desks - facilities have been established in 122 stores to date.
But management has also continued closing underperforming branches; there are plans to shut a further 109 sites in the first half of this year. As a result, revenue from the dry-cleaning business dropped by 3 per cent to £55.4m, although operating profit was maintained at £1.6m.
Adjusted operating profits for the group were up by more than a quarter to £21.8m. Johnson has intensified its focus on its textile rental business, which increased revenues by 14 per cent to £155m. During the year, the group acquired Bourne, which provides high-volume hotel linen, in order to expand its footprint in the hotel sector.
The company's workwear rental brand, Apparelmaster, invested £8.5m in a new processing facility in order to reduce production costs and energy usage. Meanwhile, a new managing director was appointed at its Stalbridge linen business during the year, with the aim of restructuring central overheads to further reduce costs.
Broker Investec Securities expects adjusted EPS of 5.5p this year, up from 2.9p in 2014.
JOHNSON SERVICE GROUP (JSG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 75p | MARKET VALUE: | £225m | |
| TOUCH: | 74-76p | 12-MONTH HIGH: | 76p | LOW: 53p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 27p* | NET DEBT: | 36% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 235.0 | 4.2 | 1.3 | 0.82 |
| 2011 | 234.0 | 13.5 | 4.1 | 1.00 |
| 2012 | 199.0 | -15.3 | -4.6 | 1.10 |
| 2013 | 193.6 | 12.2 | 3.8 | 1.21 |
| 2014 | 210.4 | 11.6 | 2.9 | 1.70 |
| % change | +9 | -5 | -24 | +40 |
Ex-div: 16 Apr Payment: 15 May *Includes intangible assets of £68m, or 23p a share | ||||
