Johnson Service Group (AIM: JSG) said trading conditions remained challenging in 2009, but its full year results will be in line with expectations as its businesses performed “satisfactorily” during the year.
Profits in the textile rental division are set to show improvement over 2008 despite business closures and reduced customer spending, which resulted in lower revenues and profitability in Johnsons Apparelmaster compared with the previous year. At the same time, Stalbridge Linen Services traded above expectations in the second half, making a contribution of £1 million compared to a loss of £0.5 million last year.
The group’s Drycleaning business saw “varying levels of high street spending,” with second half like-for-like sales being just slightly ahead of those in H1. Due to the poor weather, profits at the GreenEarth branded stores were lower than in 2008 despite cost cutting measures.
Johnson Services also announced its intention to invest in additional infrastructure to accelerate growth in the medium to longer term at its SGP Property & Facilities Management business, which saw modest profitability and revenue growth during the past year after winging a significant number of contract renewals and winning new customers including Subway, Scottish & Newcastle and South West Hants LIFT. The measures aimed at infrastructure improvement are expected to have a negative impact on profit growth in the current year.
The group’s net debt at the end of December is expected to be about £68 million compared to £75.5 million in June. Johnson Service has secured new bank facilities to April 2013 at an initial amount of £78.5 million back in December.
Disclosure: The author holds no positions in the company