Johnson Service Share News (JSG)

(Sharecast News) - Textile services provider Johnson Service Group said on Wednesday that trading in the first four months of the year was still being impacted by lockdown restrictions, although it was now beginning to see an increase in demand as restrictions were starting to ease.
The AIM-traded firm, which was holding its annual general meeting later in the day, said workwear volumes were about 96% of normal levels in March, with a "slight continuous improvement" seen in April as more businesses were permitted to open.

It said progress was being made on the fitout of its new workwear plant in Exeter, with the company on target for completion in the final quarter of the year.

In hotels, restaurants and cafes (HoReCa), Johnson said volumes in the first quarter were about 11% of normal.

"We have started to see an increase in activity within our customers as they begin to reopen their businesses in accordance with the various easing of restrictions," the board said in its statement,

"During the last two weeks of April volumes were approaching some 30% of normalised activity with further increases expected as the restrictions, particularly on hotel stays, are relaxed."

At the end of April, the company still had 1,450 employees on full or partial furlough, although it was expecting that number to reduce "significantly" in the coming weeks as employees returned to work in response to increasing volumes.

"We have commenced the commissioning of our new hotel linen plant in Leeds as we plan for increasing volumes.

"The site is expected to be operational by 17 May, congruent with the anticipated further relaxation of restrictions in England, and will allow us to transfer the work for our Yorkshire-based customers that is currently processed in north Wales.

"Furthermore, the factory locations that were mothballed over the winter months are also now operational, albeit with reduced headcount in line with current volumes."

Johnson Service Group said it was confident in the firm's ability to be "agile and responsive" to increasing volumes from customers, as the hospitality market recovered in the coming months.

It said its strong balance sheet meant it was well-positioned to continue to invest, to support long-term growth prospects.

"As previously announced, Bill Shannon is to retire from the board at the conclusion of the annual general meeting," the board also said.

"At the same time, Jock Lennox, who was appointed to the board on 5 January as an independent non-executive director and chair designate, will become chair of the JSG board."

At 0900 BST, shares in Johnson Service Group were up 2.34% at 162.92p.