After 33 years at the company, Johnson Service Group’s (JSG) chief executive, Chris Sander, is leaving. He will retire during the first half of 2018, but wants to leave the company in good shape. So far so good: adjusted pre-tax profits rose 23.5 per cent during the 6 months to June 2017, following a steady 19 per cent improvement at the top line.
The group continues to combine organic growth with acquisitions. Management said price and volume increases helped deliver underlying revenue growth of 4.8 per cent over the period, while the disposal of the long-troubled dry cleaning business in January furthered the shift to higher-margin textile services work. The acquisition of high-volume hotel linen business PLS also added to the group's capabilities in Scotland and Northern England.
There are no plans to dramatically reduce the company's debt, though. Finance director Yvonne Monaghan said gearing is measured using a custom figure, which doesn't include rental stock depreciation. The long-term target is to stay below two times this measure; the company currently sits around 1.7 times.
Analysts at Investec are forecasting adjusted pre tax profit of £38.4m, giving EPS of 8.4p for the year to December 2017 (up from £33.8m and 7.6p in 2016).
| JOHNSON SERVICE GROUP (JSG) | ||||
| ORD PRICE: | 141p | MARKET VALUE: | £516m | |
| TOUCH: | 140-141p | 12-MONTH HIGH: | 145p | LOW: 99p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 43p | NET DEBT: | 57% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 (restated) | 116 | 9.9 | 2.3 | 0.8 |
| 2017 | 138 | 12.9 | 2.8 | 0.9 |
| % change | +19 | +30 | +22 | +13 |
| Ex-div: | 5 Oct | |||
| Payment: | 3 Nov | |||
| *Includes intangible assets of £160m, or 44p a share | ||||
