3rd Mar 2015 09:59
LONDON (Alliance News) - Textile services business Johnson Service Group PLC Tuesday reported a higher operating profit for 2014, driven by good revenue growth, which it said was buoyed by the hotel-linen business Bourne which it bought early in the year, but said its pretax profit was hit by impairment charges and acquisition costs.
Johnson Service posted an adjusted operating profit of GBP21.8 million for 2014, compared with GBP17.0 million in 2013, helped by an 8.7% increase in revenue to GBP210.4 million, from GBP193.6 million.
However, its pretax profit of GBP11.6 million, down 4.9% on last year's GBP12.2 million, was hit by GBP1.6 million amortisation charge and impairment, as well as GBP6.8 million in exceptional items, including business acquisition costs, relocating to its new processing facility in Leeds, and the closure of its final-salary pension scheme.
Still, Johnson Service declared a 41% increase in its total dividend for the year to 1.70 pence, up from 1.21p last year.
"The dividend increase is reflective of the significant increase in underlying adjusted profit before tax whilst having regard for the anticipated cash requirement for future expansion," the company said in a statement.
The group said that all three of its textile rental business performed ahead of management expectations, while the acquisition of hotel linen business Bourne during the year, was immediately earnings enhancing. It also said its GBP8.2 million investment in a new plant in Leeds is on track to be operational early in 2015.
"The acquisition of Bourne has proven to be very successful and immediately earnings enhancing. The strong performance by Textile Rental has continued into 2015 and the recent significant investment in a new workwear processing facility reaffirms our strategic focus on this division," said Non-Executive chairman Paul Moody in the company's statement.
Looking forward, Moody said the group has identified areas for future growth and investment, particularly in sectors of the market where it feels it is under-represented.
"Overall, the board expects that the group will continue to deliver a positive operational and financial performance underpinned by the successful implementation of its strategy in 2015," he added.
Last year, Johnson Service was reviewing its smaller dry cleaning business, and at the beginning of 2015 announced that it was restructuring the Drycleaning business, with the future focus on highly convenient collection and delivery locations. It said Tuesday that the implementation of the restructuring plan is progressing in line with its expectations.
"The restructuring of the Drycleaning division will provide new opportunities to improve the performance of this business," said Moody.
Johnson Service shares were trading 0.3% lower Tuesday morning at 75.75 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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