Johnson Service Group's (JSG) decision to focus on its textile rental division has given a clearer picture of its growth. The company disposed of its drycleaning division in January 2017, and that is treated as a discontinued operation in figures for this year and last year (see table). The remaining textiles division is growing strongly, helping deliver adjusted pre-tax profits up 45 per cent at £33.8m.
The higher-margin textile rental sector represented £1.3bn in the UK alone, according to chief executive Chris Sander, meaning this business has room to grow. The company completed three acquisitions in 2016, which are delivering synergies sooner than expected, and it is on the lookout for more. Organic sales growth, driven by increases in both price and volume, was estimated at 5.5 per cent, according to management, up from around 4.5 per cent in 2015.
Net debt was higher at £98m, from £71m a year earlier, although this figure was better than management had expected, thanks to last April's share placing and the strong trading performance.
Analysts at Investec Securities are forecasting adjusted profit before tax of £35.8m for 2017, giving adjusted EPS of 7.9p (from £33.8m and 7.6p in 2016).
JOHNSON SERVICE GROUP (JSG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 115p | MARKET VALUE: | £418m | |
| TOUCH: | 115-116p | 12-MONTH HIGH: | 120p | LOW: 83p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 40p | NET DEBT: | 67% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 199 | -15.3 | -4.6 | 1.10 |
| 2013 | 194 | 12.2 | 3.8 | 1.21 |
| 2014 | 210 | 11.6 | 2.9 | 1.70 |
| 2015 (restated) | 188 | 17.3 | 4.3 | 2.10 |
| 2016 | 257 | 25.9 | 6.0 | 2.50 |
| % change | +37 | +50 | +40 | +19 |
Ex-div: 17 Apr Payment: 12 May *Includes £164m of intangible assets, or 45p a share | ||||
