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Investing.com -- Johnson Service Group Plc (LON:JSG) shares surged 11% on Tuesday after the textile rental and laundry service provider reported solid first-half results and announced plans for a new £25 million share buyback program.
The company posted adjusted operating profit of £28.7 million for the first half of 2025, up 13.9% from £25.2 million in the same period last year. Revenue increased 5.5% to £257.5 million, with organic growth of 1.4% across the business. Adjusted earnings per share rose 17.9% to 4.6p.
Johnson Service Group’s adjusted operating profit margin improved by 80 basis points to 11.1%, despite facing significant labor cost pressures. The company successfully offset a 170 basis point increase in labor costs through a 160 basis point reduction in energy costs and a 90 basis point reduction in other expenses.
"I am pleased to report that we have delivered further progress in the first half of 2025," said Peter Egan, Chief Executive Officer. "Our continued focus on operational excellence and margin improvement has positioned us well to achieve our target of at least a 14.0% adjusted operating profit margin in 2026."
The company increased its interim dividend by 23.1% to 1.6p per share and announced plans to launch a further £25 million share buyback program, having completed a £30 million buyback announced in March.
In the HORECA division, which serves hotels, restaurants and catering businesses, revenue increased 7.2% to £185.4 million, while the Workwear division saw revenue rise 1.3% to £72.1 million. Customer retention in the Workwear segment improved to 94%, up from 93% at the end of 2024.
Looking ahead, Johnson Service Group remains confident in meeting full-year adjusted operating profit expectations and achieving its target margin of at least 14% by 2026.