Johnson Service trades ahead of expectations in year of strong growth

(Sharecast News) - Textile services provider Johnson Service Group detailed a year of "strong strategic and operational performance" on Friday and told investors it expects to announce full-year results "slightly ahead of market expectations".

JSG said the group's £10m investment plan in its new high volume linen plant in Leeds remained on target for opening in the Spring of 2020 - providing extra processing capacity ahead of the busy summer months.

The AIM-listed firm also noted that Fresh Linen Holdings, which it acquired for £12.5m back in November, had generated full-year revenues of £16.7m and a profit before taxes of £1.1m.

Chief executive Peter Egan said: "This has been a strong trading period despite the general uncertainty in the UK economy.

"We have achieved consistent organic growth and, with this latest acquisition in the South East, are expanding into a new geographical area where we are currently under-represented for servicing our high volume linen customers."

On the back of the news, analysts at HSBC raised their price target on JSG from 185.0p to 220.0p, citing the firm's "strong finish to 2019".

HSBC said it was "business as usual for JSG", with a positive pre-close statement flagging trading slightly ahead of expectations and the "small but strategic acquisition" Fresh Linen for £12.5m adding to the group's geographic footprint in the South East.

As of 1030 GMT, Johnson Service shares were up 1.11% at 201p.