(Alliance News) - Johnson Service Group PLC on Friday said trading up to that date had been in line with management's expectations, building on the strong profitable growth seen in 2019.
However, the Cheshire-based textile rental and related services provider said has started to experience a slowdown in the "recent weeks" in some areas of its operations.
Johnson Service particularly highlighted the slowdown within its HORECA business, which serves the hotel, restaurant and catering markets. These have seen reduced demand due to the Covid-19 health crisis, which has resulted in a "significant reduction" in the company's processing volumes, particularly in the last few days.
Johnson Service said its Workwear business has seen limited impact to date, although it is reasonable to expect that some Workwear customers will see an impact from the Covid-19 outbreak in due course.
As at the end of 2019, the company said it had debt of GBP87.7 million, which remains at the "similar level" to date, and Johnson Service's committed bank facilities are GBP135 million, running to August 2023.
"We have taken immediate action to limit capital expenditure on both plant and equipment and on new textile rental items and have cancelled all non-essential revenue expenditure. We have also commenced discussions with our banks regarding increased bank facilities," the company said in its statement Friday.
Looking forward, the company said it is taking actions to reduce operational costs, particularly in the businesses most affected by the drop-off in volume.
In addition, Johnson Service said it will not be paying the final dividend of 2.35 pence it had declared.
"While the full implications of Covid-19 on the financial performance for the current financial year are difficult to determine at this stage, the board remains confident in the future prospects and viability of the group," the company said.
AIM-listed Johnson Service share were trading 12% higher in London on Friday at 103.40p each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Johnson Service (JSG)