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(Alliance News) - Johnson Service Group PLC on Wednesday said it anticipates no dividend for this year after a tough first half of 2020, with its Hotel, Restaurant & Catering Business division's revenue nearly halving.
Johnson Service Group shares were up 5.7% at 109.69 pence each on Wednesday morning.
The Cheshire, England-based textile rental and related services provider swung to a pretax loss in the first half ended June 30 of GBP18.6 million from a profit of GBP15.2 million a year prior.
Revenue was at GBP114.8 million, down from GBP167.1 million the year before.
Johnson Service Group's Hotel, Restaurant & Catering Business division took the biggest knock with revenue almost halved to GBP50.2 million from GBP99.6 million a year prior. This was due to a "significant number" of plants being closed for a chunk of the half.
Chief Executive Peter Egan said: "Our performance during the period reflects the challenging market conditions inflicted on the business by Covid-19 following a strong start to the year. The management team have been highly active in addressing the impact, by taking decisive action to ensure the long-term preservation of the business, shoring up the group's finances and mothballing sites to ensure that Johnson Service Group is well placed to react quickly as end markets continue to recover."
Johnson Service did not propose an interim dividend. The company said it is aware of the importance of dividends to shareholders and will reinstate dividend payments as soon as practicable, but does not anticipate one for this year.
Egan said: "It remains very difficult to predict with any accuracy the timing of a recovery to pre-Covid levels. However, with our strong balance sheet, established market position and reputation for quality service, we remain confident in the group's medium-term growth prospects as the economy and markets that we serve recover."
The company noted that its Workwear division is steadily increasing, going from a 12% reduction in volume in April to a 6% reduction in August. 91% of customers, who advised they were closed during lockdown, have now returned to varying levels of activity.
Johnson Service Group said it is unable to give any guidance on the outcome for 2020.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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