Deutsche Bank lifts Johnson Service stock target to GBP2.15

Published 05/03/2025, 12:34
Deutsche Bank lifts Johnson Service stock target to GBP2.15

On Wednesday, Deutsche Bank (ETR:DBKGn) analyst James Beard increased the price target on Johnson Service Group Plc (JSG:LN) shares to GBP2.15, up from the previous GBP2.05, while reiterating a Buy rating on the stock. The adjustment followed the company’s recent preliminary earnings report.

Johnson Service Group reported a revenue increase of 10% year-over-year to GBP513.4 million, with organic growth contributing 3.9%. The company’s EBITDA rose by 23% to GBP62.3 million, surpassing Deutsche Bank’s estimate of GBP61.5 million. Earnings per share (EPS) experienced a significant 30% increase to 10.1p, outperforming the bank’s forecast of 9.8p. Additionally, the dividend per share (DPS) saw a substantial rise of 43% to 4.0p, again exceeding the anticipated 3.9p.

The HORECA (hotel, restaurant, and café) sector displayed a 5.6% organic revenue growth, driven by continuous volume growth and price increases. In contrast, Workwear revenues remained flat organically. However, management indicated that recent new sales activities are expected to positively impact the business later in the financial year 2025.

The company also reported a reduction in energy costs to 8.8% of sales for the fiscal year 2024, down from 10% in FY23. The report noted that for the upcoming year, energy costs are generally fixed at lower rates, similar to the proportions fixed a year ago. Staff costs remained stable, accounting for 44.6% of sales, only slightly down from 44.7% in the previous fiscal year.

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