It's one of Aim's less colourful companies, but Johnson Service Group (JSG) never fails to impress. The textile rental group has once again produced a solid set of results, which have beaten both the market's and the group's own expectations.
The textile rental division, which contributes the majority of group revenue, was buoyed by recent acquisitions, but that's not to detract from the circa 5 per cent organic growth reported across all three business lines. Three acquisitions in the high-volume hotel linen space were initially met with enthusiasm by the market, until shares were sent sliding by the country's decision to vote for Brexit. But the fall, which related to the fact that the group imports raw materials from Europe, has been completely reversed, with the shares now trading above their pre-vote level. The acquisitions have been integrated successfully and they're already contributing to revenues and earnings.
Overall adjusted operating profit was up 40 per cent - a result of revenue growth and enhanced margins - while net debt came in below expectations thanks to the strong profit growth and high cash generation.
Broker Investec expects pre-tax profits of £33.2m for the year to December 2016, giving adjusted EPS of 7.5p, up from £25.2m and 6.3p in 2015.
JOHNSON SERVICE GROUP (JSG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 103.5p | MARKET VALUE: | £376m | |
| TOUCH: | 103-103.5p | 12-MONTH HIGH: | 104p | LOW: 83p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 38.5p* | NET DEBT: | 78% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 109 | 1.2 | 0.2 | 0.65 |
| 2016 | 138 | 10.4 | 2.4 | 0.80 |
| % change | +27 | +767 | +1100 | +23 |
Ex-div: 6 Oct Payment: 4 Nov *Includes intangible assets of £177m, or 49p a share | ||||
