REG - Johnson Service Grp. - Preliminary Results for the Year Ended 31 Dec 2025
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RNS Number : 0228V Johnson Service Group PLC 03 March 2026
3 March 2026
TIDM: JSG
Johnson Service Group PLC
('JSG' or 'the Group')
Preliminary Results for the Year Ended 31 December 2025
Resilient sales performance and strong profit growth in FY25
The Board expects another year of growth and margin improvement in FY26
FINANCIAL HIGHLIGHTS
2025 2024 Increase
Adjusted results
Revenue £535.4m £513.4m 4.3%
Adjusted operating profit(1) £72.5m £62.3m 16.4%
Adjusted operating profit margin(1) 13.5% 12.1% 140bp
Adjusted EBITDA margin(1) 31.2% 29.7% 150bp
Adjusted profit before taxation(2) £64.5m £54.8m 17.7%
Adjusted diluted earnings per share(3) 12.1p 10.1p 19.8%
Statutory results
Operating profit £58.8m £54.7m 7.5%
Profit before taxation £50.8m £47.2m 7.6%
Diluted earnings per share 9.2p 8.4p 9.5%
Dividend 4.8p 4.0p 20.0%
Notes
1 'Adjusted EBITDA' refers to operating profit before amortisation of
intangible assets (excluding software amortisation) and exceptional items
(defined as 'adjusted operating profit') plus the depreciation charge for
property, plant and equipment, textile rental items and right of use assets,
plus software amortisation.
2 'Adjusted profit before taxation' refers to adjusted operating profit
less total finance costs.
3 'Adjusted diluted earnings per share' refers to diluted earnings per
share calculated on adjusted profit after taxation.
§ On an organic basis, revenue for the Group increased by 1.4% on 2024 levels
(Hotel, Restaurant and Catering ('HORECA'): +1.0%; Workwear +2.4%).
§ Strong growth of 16.4% in adjusted operating profit to £72.5 million
(2024: £62.3 million) resulting in an improved margin of 13.5% (2024: 12.1%),
both in line with market expectations.
§ Revenue within HORECA increased to £389.8 million (2024: £371.2 million)
whilst adjusted operating profit increased to £59.8 million (2024: £49.4
million), giving a margin of 15.3% (2024: 13.3%).
§ Workwear revenue increased to £145.6 million (2024: £142.2 million), with
adjusted operating profit increasing to £21.0 million (2024: £20.3 million),
giving a margin of 14.4% (2024: 14.3%).
§ 20.0% increase in full year dividend, reflecting the Board's confidence in
the future.
§ The £55.0 million of share buyback programmes announced in 2025 were
completed in January 2026, bringing the total amount returned to Shareholders
through share buybacks since 2022 to £90.3 million.
§ Net debt increased to £159.2 million (December 2024: £115.6 million),
reflecting capital investment across our estate of £35.9 million, the impact
of the share buyback programmes undertaken during the year and dividend
payments of £17.4 million, offset by the improved trading performance.
§ Leverage, calculated as adjusted EBITDA compared to total net debt, was
0.95 times.
OPERATIONAL HIGHLIGHTS
§ Reflective of the current uncertain economic outlook, overall HORECA
volumes for the year were satisfactory and in line with our expectations,
albeit with some regional and sector variations.
§ Workwear volumes remain stable, benefitting from a combination of new
installations and customer retention improving to 94% (2024: 93%).
§ Energy costs continuing to reduce as a percentage of revenue.
§ Price increases, together with productivity improvements as a result of our
ongoing targeted investment in the business, helped to offset cost inflation.
§ Fourth Sustainability Report published in June 2025.
§ Gas and plastic reduction targets set for 2026.
OUTLOOK
§ We are continuing to focus on expanding the Group through targeted
investment in our existing sites and identifying further earnings enhancing
opportunities to deploy capital.
§ We have a strong balance sheet and a highly cash generative model, so are
well placed to capitalise on appropriate opportunities as they arise.
§ The Board will continue to actively review its options on further share
buybacks throughout 2026.
§ Notwithstanding the current economic uncertainty, particularly the impact
of significantly increased labour and premises costs on some of our end
customers, the Board expects to deliver another year of growth.
§ We remain on track towards achieving our targeted adjusted operating margin
of at least 14.0% in 2026.
Peter Egan, Chief Executive Officer of Johnson Service Group, commented:
"Our strong earnings growth and improved margin, in line with market
expectations, reflects our investment to further improve operational
efficiencies, continued focus on tight cost control and service excellence.
Our successful admission to the Main Market on 1 August 2025 marks a
significant milestone in our growth journey. The move reflects our
confidence in the Group's future, our commitment to delivering long-term value
for all stakeholders and positions us well for the next phase of growth. With
robust cash generation, we continue to have a disciplined approach to capital
allocation and focus on delivering value to shareholders, evaluating the
balance between investing in our acquisition strategy, organic growth
ambitions and returns to Shareholders.
Entering 2026, the regional and sector variations in HORECA volumes
experienced in 2025 continued. Notwithstanding this, and recognising normal
seasonality driving stronger trading over the summer months, we expect to
deliver another year of growth across the Group and we remain on track towards
achieving our target of an improved adjusted operating margin for 2026 of at
least 14.0%. I would like to extend my thanks to all of our employees, whose
hard work and significant contribution has helped to deliver this robust
performance and outlook."
SELL-SIDE ANALYSTS' MEETING
A presentation for sell-side analysts will be held today at 09:30 at Investec
Bank plc, 30 Gresham Street, London, EC2V 7QP, details of which will be
distributed by Camarco. A copy of the presentation, together with a
recording of the meeting, will be available on the Group's website
(www.jsg.com (http://www.jsg.com) ) following the meeting.
ENQUIRIES
Johnson Service Group PLC
Peter Egan, CEO
Ryan Govender, CFO
Tel: 020 3757 4992/4981 (on the day)
Tel: 01928 704 600 (thereafter)
Investec Bank plc Camarco (Financial PR)
David Flin Ginny Pulbrook
Virginia Bull Letaba Rimell
Tom Brookhouse
Tel: 020 7597 5970 Tel: 020 3757 4992/4981
CHIEF EXECUTIVE'S OPERATING REVIEW
BASIS OF PREPARATION
Throughout this statement, and consistent with prior years, a number of
alternative performance measures ('APMs') are used to describe the Group's
performance. APMs are not recognised under UK-adopted international
accounting standards. Whilst the Board uses APMs to manage and assess the
performance of the Group, and believes they are representative of underlying
trading, facilitate meaningful year on year comparisons and hence provide
useful information to stakeholders, it is cognisant that they do have
limitations and should not be regarded as a complete picture of the Group's
financial performance. APMs, which include adjusted operating profit,
adjusted profit before taxation, adjusted EBITDA, adjusted earnings per share,
adjusted diluted earnings per share and net debt excluding IFRS 16 lease
liabilities, are defined within note 1 (Basis of Preparation) and are
reconciled to statutory reporting measures in notes 2, 5, 8 and 17.
FINANCIAL OVERVIEW
Financial Results
Total revenue for the year increased by £22.0 million, or 4.3%, to £535.4
million (2024: £513.4 million). Whilst price increase and renewal
discussions continued to be challenging during 2025, we remain focused on
delivering excellent service which is commensurate with our pricing levels.
On an organic basis, revenue in HORECA increased by 1.0% over 2024 and
Workwear increased by 2.4%.
We have continued to proactively manage ongoing input cost inflation
pressures, particularly in relation to labour following the significant
increases to UK National Insurance, the UK National Living Wage and, within
the Republic of Ireland, the National Minimum Wage, through a combination of
price increases and capital investment, which delivers increased operational
efficiencies and lowers energy and water usage. Energy, as a percentage of
revenue, has continued to reduce but remains a higher cost than has been
experienced historically. Our stated policy of proactively forward fixing
energy prices for the coming months to obtain and manage some degree of
certainty over the cost of supply is being maintained, giving us visibility of
a further reduction, as a percentage of revenue, in 2026. Labour costs, as a
percentage of revenue, are expected to remain relatively stable into 2026.
Adjusted operating profit increased by 16.4% to £72.5 million (2024: £62.3
million) whilst adjusted operating profit margin improved by 140 basis points
to 13.5% (2024: 12.1%), reflecting strong operational control and the benefit
of efficiencies through our targeted investment in the business.
Adjusted EBITDA increased by 9.3% to £166.8 million (2024: £152.6 million)
giving an increased margin of 31.2% (2024: 29.7%). Adjusted profit before
taxation increased by 17.7% to £64.5 million (2024: £54.8 million).
The exceptional charge of £6.0 million (2024: £0.4 million) represents £1.7
million of costs in relation to our move to the Main Market, £3.4 million of
reorganisation costs, including £1.4 million relating to the closure of our
Lancaster Workwear site, £0.5 million in relation to business acquisition
activity and £0.4 million of costs incurred in respect of the fire at the
Bristol Workwear site.
CHIEF EXECUTIVE'S OPERATING REVIEW (continued)
Statutory operating profit increased to £58.8 million (2024: £54.7 million)
whilst statutory profit before taxation, after amortisation of intangible
assets (excluding software amortisation) of £7.7 million (2024: £7.2
million) and the exceptional items referred to above, increased to £50.8
million (2024: £47.2 million).
Adjusted diluted earnings per share increased by 19.8% to 12.1 pence (2024:
10.1 pence).
Dividends
An interim dividend of 1.6 pence (2024: 1.3 pence) per share was declared at
the time of announcing our interim results. We are pleased to recommend a
final dividend of 3.2 pence per share, taking the full year dividend to 4.8
pence (2024: 4.0 pence) per share. This year-on-year increase of 20.0%
reflects the Board's confidence in the future performance of the Group.
Dividend cover remains at 2.5 times.
Share Buyback Programme
In the period since September 2022, we have returned £90.3 million to
Shareholders through share buyback programmes. In line with our capital
allocation policy, the Board will continue to actively review its options on
further share buybacks throughout 2026, taking into account the cash
generation profile of the Group and the level of headroom available under its
committed bank facilities. Further details are set out within the Financial
Review.
OPERATIONAL REVIEW
Our Businesses
The Group provides textile rental and related services throughout the UK and
Republic of Ireland.
Within our Hotel, Restaurant and Catering ('HORECA') division, 'Johnsons Hotel
Linen', our high-volume linen business, primarily serves group and independent
large hotel customers, 'Johnsons Hotel, Restaurant and Catering Linen'
provides premium linen services to restaurant, hospitality and corporate event
customers whilst 'Johnsons Luxury Linen' provides bespoke linen predominantly
to four and five-star luxury hotels. Also, within HORECA, 'Johnsons Ireland'
serves both hospitality and healthcare customers. Our Workwear division
comprises solely of 'Johnsons Workwear', which predominantly provides workwear
rental, protective wear and laundry services to UK businesses across a wide
range of sectors including food manufacturing and industrial.
The impact of significantly increased labour and premises costs is being felt
by some of our end customers, particularly within the hospitality market,
making price increases and renewals more challenging. Whilst the market
remains competitive, we remain focused on consistently delivering excellent
service that aligns with our pricing levels and investing in our estate to
drive continued operational efficiencies.
Energy Cost Management
Energy costs (comprising gas, electricity and fuel) have remained elevated
throughout the year and continue to be so. Costs for 2025 represented 7.4%
of revenue, a reduction from 8.8% of revenue in 2024 but significantly higher
than in 2019 where the cost was 6.2% of revenue.
For many years, our policy in the UK has been to fix energy prices on a
rolling basis, building a position so that the upcoming months are largely
fixed. This provides certainty but also means that costs do not immediately
reflect falls, or increases, in spot prices. We have continued this policy
of proactively fixing energy prices and, as at the end of February 2026, we
had fixed some 90% of our anticipated electricity usage and some 95% of our
anticipated gas usage for the first half of 2026 and approximately 75% and
85%, respectively, for the second half of 2026. In addition, we have hedged
approximately 70% of our anticipated diesel requirement across 2026.
Looking further ahead, we currently have, based on our anticipated usage,
approximately 55% electricity and approximately 70% gas at fixed prices for
2027, with reducing amounts into 2028 and 2029, and will continue to lock in
prices as opportunities allow.
Labour
Labour remains the biggest cost of our operations. In the year to 31
December 2025 labour, as a percentage of revenue, increased 140 basis points
to 46.0%, significantly higher than the 44.6% in the year to 31 December 2024
and the 43.0% in the year to 31 December 2019.
The higher percentage above is reflective of increases in National Minimum
Wage and Pay Related Social Insurance in January 2025 in the Republic of
Ireland and increases in the National Living Wage and National Insurance in
the UK in April 2025. The annualised impact of the increase in employer
National Insurance contributions in the UK alone is some £6.0 million, which
we have mitigated and managed through price increases, operational
efficiencies and other measures. Labour costs, as a percentage of revenue,
are expected to remain relatively stable into 2026.
HORECA Division
Revenue within HORECA increased to £389.8 million (2024: £371.2 million)
whilst adjusted operating profit increased to £59.8 million (2024: £49.4
million), giving a margin of 15.3% (2024: 13.3%). This significant increase
in profitability reflects, in part, production efficiencies resulting from
more predictable volumes and the benefits of capital investment together with
lower energy costs. Adjusted EBITDA for the year increased to £122.9
million (2024: £110.5 million) with an improved margin of 31.5% (2024:
29.8%).
Johnsons Hotel Linen
Volumes within Johnsons Hotel Linen were in line with our expectations, with
new business coming from a combination of successful sales team activity and
new build hotels or extensions with existing customers. We remain easy to do
business with and continue to provide solutions to customers' challenges, with
excellent on time and in full service levels. Installations of new business
continued to be well organised and efficient, often with very short lead
times, and our externally facilitated customer satisfaction survey resulted in
a high score of 88%, similar to the prior year. We received excellent
feedback relating to our service team's partnership approach and they continue
to build excellent customer relationships. Testament to our reputation for
delivering excellent service levels, in 2025 Johnsons Hotel Linen agreed a
five-year contract renewal with one of its largest customers.
As in previous years, capital investment focused on driving operational
efficiency and increasing capacity whilst reducing our carbon emissions. At
Edinburgh and Pwllheli, we replaced sorting systems and automatic dryers
whilst our Reading, Chester and Cardiff sites benefitted from the installation
of new boilers and the replacement of older ironers for newer models. A
number of stand-alone washing machines were also upgraded across the estate
and we have continued to invest in our vehicle fleet, resulting in excellent
reliability and a reduction in emissions.
As part of continually improving our sustainability credentials, plastic
wrapping of clean, delivered product has been removed from our Birmingham,
Chester, Clacton and Pwllheli sites. Instead, linen is now delivered in
reusable, washable bags which can also be used for linen storage at customers'
premises. Roll out across the estate will continue in 2026.
Johnsons Hotel, Restaurant and Catering Linen
Against a difficult hospitality market backdrop, the effect of significantly
increased business costs has particularly impacted some of the customers
served by Johnsons Hotel, Restaurant and Catering Linen, with price increases
and renewals becoming more challenging. In addition, whilst new sales
activity has remained broadly consistent with prior periods, market churn,
particularly within the independent hotel and restaurant sector, has increased
in recent months, resulting in a decline in volumes in some regions.
Whilst the market remains competitive, we are focused on continuing to deliver
an excellent level of service to our customers, as reflected in our annual
customer survey results where an improved overall score of 89% was achieved,
with several sites achieving a world class score of over 90%.
The significant cost increases being experienced across UK businesses are
encouraging some of our smaller, independent competitors to review their
business strategy and, as a result, we added customer contracts with an
annualised revenue of some £4.9 million to the division during 2025. We
anticipate that further, similar, opportunities will continue to arise.
Many of our existing customers located in London and the Southeast region have
now been successfully transferred into our new Crawley site, which began
processing in March 2025. This, in addition to new business wins, resulted
in peak processing volumes during the year building to some 50% of capacity,
in line with our expectations. The Crawley laundry process is designed to
consume significantly less energy than a traditional laundry, provides
significant water recycling opportunities, utilises renewable energy sources
and undertakes deliveries using vehicles powered by HVO, which provides for a
significant reduction in vehicle emissions.
Investment in the wider estate has also continued, with replacement boilers,
water recycling systems, ironers and garment finishing equipment having been
installed across several of our sites. All new investments have a
pre-requisite to reduce carbon emissions against our 2030 targets and improve
production efficiency.
Johnsons Luxury Linen
Johnsons Luxury Linen experienced strong volumes in 2025, aided by both high
retention levels and a number of high-profile customer wins. The sales
pipeline is encouraging and supports our growth ambitions in securing
additional five-star luxury hotel customers.
The site in Tottenham, acquired in September 2024, has been successfully
integrated into the Group, with local management now working collaboratively
with colleagues in both Corsham and across the wider Group, sharing knowledge,
experience and best practice methodologies.
Both sites have benefitted from strategic investment in plant and equipment.
In particular, the £1.3 million investment in plant and machinery at our
Corsham site at the end of 2024, which increased processing capacity there by
almost 20%, is now being utilised as the site achieved record volumes and
efficiencies in 2025. Plans for increasing processing capacity are being
developed to further expand this part of our business.
Johnsons Ireland
The rollout of our Johnsons Ireland rebranding is now complete, with Johnsons
Celtic Linen in the south and Johnsons Belfast in the north supplying
customers across the entire island of Ireland. Our vehicles and sites have
been rebranded and we have launched our new website.
In hospitality, volumes were as expected albeit with some regional
variations. Healthcare volumes have continued to rise, with an increase in
day procedures performed by hospitals. Overall, our end markets remain
competitive with any customer attrition often due to the customer seeking
pricing levels which are not commensurate with the level of service we
provide. We continue to concentrate on our proven track record of providing
a high quality and reliable service to our customers, easy and available
access to our team and consistent communication.
Similar to the UK, increasing labour costs in the Republic of Ireland remain a
challenge following the 6.3% increase in minimum wage and the increase in
Pay-Related Social Insurance ('PRSI'), both of which were effective on 1
January 2025. As part of the overall mitigation plan, we are working to
continue improving efficiencies and processes, helped by the capital
investment programme across the estate.
The capital investment of £6.3 million in Wexford and Naas, which started in
2024, has been completed. This investment includes the installation of a
state-of-the-art sortation system, a high-speed ironer line, a continuous
batch washer system, additional drying capacity and a new automated chemical
dosing system. These new pieces of equipment help to optimise washing
throughput and energy efficiency and have increased capacity in Wexford by
some 20% and in Naas by some 40%. In addition to installing new processing
equipment, we have also upgraded employee welfare facilities and offices.
Workwear Division
Revenue for the Workwear division increased by 2.4% to £145.6 million (2024:
£142.2 million). Adjusted EBITDA was £52.1 million (2024: £49.4 million)
with an increased margin of 35.8% (2024: 34.7%). Adjusted operating profit
was £21.0 million (2024: £20.3 million), resulting in an improved margin of
14.4% (2024: 14.3%), reflecting the implementation of price increases
throughout the year to offset input cost inflation.
Our sales team had a successful year in acquiring new business. They have
confidence in our ability to deliver excellent service and focus on this when
participating in new commercial opportunities and tenders. Similarly, the
service team secured significant contract renewals with multiple key
customers, often identifying opportunities for expansion within those
accounts.
Customer retention is now 94% (2024: 93%) and trending towards historic
levels, validating the strength of our customer relationships, the consistent
delivery of our service and our responsiveness to evolving customer needs.
The renewal rate also reflects the effectiveness of our proactive engagement
strategy, built around personalised account management and ongoing customer
interaction.
The externally facilitated satisfaction survey for existing customers saw us
achieve a result of 84%, whilst the new customer satisfaction survey achieved
a robust score of almost 86%. These results reflect our commitment to
delivering high quality service, building trusted relationships and
continually improving the customer experience.
Capital expenditure in the year included investment in forty new commercial
vehicles, laundry processing equipment and boiler systems at several sites,
all of which help deliver operational resilience and assist in reducing our
carbon footprint.
The relocation of operations from Lancaster to Manchester, and the subsequent
closure of the Lancaster site, was successfully completed during the year with
no disruption to service delivery. The cost of the project was £1.4
million and has been charged to exceptional costs.
At the end of June 2025, our small industrial workwear processing unit
in Bristol suffered a fire which rendered that part of the site
inoperable. Work continues to be processed at our sites in Exeter and
Treforest and, importantly, there has been no disruption to customer
service. Business interruption insurance is in place and we expect to
finalise the claim with insurers in 2026 however, a £0.4 million charge has
been recognised within exceptional items during 2025.
SUSTAINABILITY
The Board has overall responsibility for environmental and social matters and
we recognise our duty to stakeholders to operate the business in an ethical
and responsible manner. We remain committed to further developing our
environmental and social responsibility agenda, recognising that it plays a
major part in leading and influencing our people and operations.
In June 2025, we published our fourth Sustainability Report which set out the
progress we have made and the targets we have set ourselves. We have continued
to build on the foundations of our sustainability strategy with communication
and involvement of employees at all levels being a key focus.
Further details of our achievements during 2025 and our targets for 2026,
ongoing initiatives and actions for the future will be set out within the
Group's 2025 Annual Report.
EMPLOYEES
We place great importance on the contribution that each of our employees make
to the success of the Group. Our employees are key in our ability to deliver
customer service levels which exceed our customers' expectations. The Board
would like to thank them for their support and hard work during 2025.
Ensuring employees achieve their full potential remains a key focus of the
Group. Providing a range of training, education, apprenticeship and
development programmes for employees allows them to take advantage of career
progression opportunities within the Group and helps to build a workforce for
the future.
Employee engagement activity remains ongoing, supporting our people and
providing safe, clean and enjoyable environments to work in. The scores from
our employee engagement surveys were outstanding, reflecting the commitment
and enthusiasm of our employees across all of our operating locations.
BOARD CHANGES
As previously announced, Ryan Govender was appointed to the Board as Chief
Financial Officer ('CFO') in succession to Yvonne Monaghan, with effect from 1
October 2025. Yvonne retired from the Board on the same date, having served
seventeen years as CFO. The Board would like to thank Yvonne for her
significant input and unwavering support during her time with the Group.
As separately announced today, Lysanne Gray will join the Board as an
Independent Non-Executive Director with effect from 1 June 2026 and will
succeed Chris Girling as Audit Committee Chair following the announcement of
the Group's interim results for the six-month period ended 30 June 2026. In
addition, Nicola Keach, who has served as an Independent Non-Executive
Director of the Company since June 2022, will succeed Chris Girling as Senior
Independent Director with effect from 1 June 2026. Chris will continue to
serve as an Independent Non-Executive Director until he steps down and retires
from the Board on 31 December 2026.
FORTHCOMING INVESTOR ACTIVITIES
We are committed to clearly communicating our strategy and activities to our
stakeholders, in order that they receive a balanced and complete view of our
performance. An audio recording of the sell-side analysts' meeting, which
will be held today at 09:30, will be made available on the Group's website
(www.jsg.com) following the conclusion of the meeting.
OUTLOOK
Our successful admission to the Main Market in August 2025 marks a significant
milestone in our growth journey. The move reflects our confidence in the
Group's future, our commitment to delivering long-term value for all
stakeholders and positions us well for the next phase of growth.
We have entered 2026 as a strongly invested business with a resilient business
model and a proven ability to navigate periods of economic uncertainty.
Whilst the challenges created by the significantly increased cost of labour in
both the UK and the Republic of Ireland remain difficult to predict, in part
due to the impact on customer behaviour, we remain focused on delivering
excellent service which is commensurate with our pricing levels. Our scale
and depth of expertise give us the capability not only to mitigate potential
challenges through continued operational efficiencies and disciplined cost
management, but also to move decisively when appropriate opportunities arise.
We have continued to fix a proportion of our future energy costs and improve
the efficiency of our sites to help offset cost inflation and stabilise our
cost base and we are continuing to engage with our customers regarding the
pricing of our services as we advance through 2026. New sales across the
business are a focus, particularly in the regions where we have added
capacity.
We have a strong balance sheet and a highly cash generative model, so are well
placed to capitalise on appropriate opportunities as they arise. We are
continuing to focus on expanding the Group through targeted investment in our
existing sites and identifying further earnings enhancing opportunities to
deploy capital. In line with our capital allocation policy, the Board will
continue to actively review its options on further share buybacks throughout
2026.
Entering 2026, the regional and sector variations in HORECA volumes
experienced in 2025 continued. Notwithstanding this, and recognising normal
seasonality driving stronger trading over the summer months, the Board expects
to deliver another year of growth across the Group and we remain on track
towards achieving our targeted adjusted operating margin of at least 14.0% in
2026.
Peter Egan
Chief Executive Officer
2 March 2026
FINANCIAL REVIEW
FINANCIAL RESULTS
Total revenue for the year to 31 December 2025 increased 4.3% to £535.4
million (2024: £513.4 million).
Adjusted EBITDA was £166.8 million (2024: £152.6 million) giving an improved
margin of 31.2% (2024: 29.7%) and, in-line with our expectations, improving
from the 29.3% margin achieved in the first half of 2025.
Segmental revenue, adjusted operating profit and adjusted operating profit
margin are as follows:
2025 2024
Adjusted Operating Adjusted Operating Profit
Profit
Revenue Margin Revenue Margin
£m £m % £m £m %
HORECA 389.8 59.8 15.3 371.2 49.4 13.3
Workwear 145.6 21.0 14.4 142.2 20.3 14.3
Central Costs - (8.3) - - (7.4) -
Group 535.4 72.5 13.5 513.4 62.3 12.1
Statutory operating profit was £58.8 million (2024: £54.7 million) whilst
adjusted operating profit, which increased by 16.4%, was in line with market
consensus at £72.5 million (2024: £62.3 million).
The total finance cost increased to £8.0 million (2024: £7.5 million) and
included £5.6 million (2024: £5.2 million) of bank interest, £2.6 million
(2024: £2.3 million) of interest in respect of IFRS 16 lease liabilities and
a credit of £0.2 million (2024: £nil) in respect of notional interest on
pension liabilities.
The exceptional charge of £6.0 million (2024: £0.4 million) represents £0.5
million in relation to business acquisition activity, £3.4 million of
reorganisation costs, including £1.4 million relating to the closure of our
Lancaster Workwear site, £1.7 million of costs in relation to the Company's
ordinary shares being admitted to the Equity Shares (Commercial Companies)
Category of the Official List of the Financial Conduct Authority and to
trading on the Main Market of the London Stock Exchange and £0.4 million of
costs incurred relating to the fire at the Bristol Workwear site.
Adjusted profit before taxation was £64.5 million (2024: £54.8 million)
whilst statutory profit before taxation, after amortisation of intangible
assets (excluding software amortisation) of £7.7 million (2024: £7.2
million) and the exceptional charge outlined above, was £50.8 million (2024:
£47.2 million).
Adjusted diluted earnings per share increased by 19.8% to 12.1 pence (2024:
10.1 pence).
FINANCIAL REVIEW (continued)
FINANCING
Bank debt at the end of the year was £112.4 million (December 2024: £68.6
million) reflecting capital investment across our estate of £35.9 million,
the impact of a £54.7 million cash outflow during the year in respect of
share buybacks and the payment of £17.4 million of dividends, offset by the
improved trading performance. Including IFRS 16 liabilities, net debt at
December 2025 was £159.2 million (December 2024: £115.6 million).
The Group remains well funded, with access to a committed revolving credit
facility of £135.0 million which matures in August 2027. Whilst the
existing facility provides sufficient liquidity for current commitments, we
have commenced discussions with our existing lenders to refinance the
facility, having regard to the future deployment of capital and our target
leverage of 1.0 to 1.5 times, and to extend its tenure.
Bank covenants comprise leverage and interest cover tests. Leverage is
calculated as adjusted EBITDA compared to total net debt, including IFRS 16
liabilities. The agreed covenant is for the ratio to be not more than three
times and the ratio at 31 December 2025 was 0.95 times. Interest cover
compares adjusted operating profit to total interest cost, with a minimum
covenant ratio of four times. Our current scenario planning provides
significant headroom against the covenants.
Interest payable on bank borrowings is based upon SONIA or, in the case of
Euro denominated borrowings, EURIBOR, plus a margin, linked to our leverage
covenant, which ranges from 1.45% to 2.45%. The current margin is 1.45%.
RETURN ON CAPITAL EMPLOYED ('ROCE')
ROCE, calculated as rolling 12-month adjusted operating profit divided by the
average of opening and closing Shareholders' equity, net debt and
post-employment benefits for the same 12-month period, increased to 17.1%
(2024: 15.5%).
INVESTMENT APPRAISAL
Prior to undertaking any major investment, be it a significant capital project
or an acquisition opportunity, the Board, as part of its evaluation of the
investment opportunity with reference to the factors set out in Section 172(1)
of the Companies Act 2006, diligently assesses the associated strategic
opportunities available to the Group together with the cost, return, risk and
reward of each project before deciding whether or not to proceed. Relevant
financial considerations include discounted cash payback, ROCE, projected
profitability and impact on margin.
Following the acquisition of Empire Linen Services Limited ('Empire') in 2024,
and with the benefit of a full year's trading throughout 2025, the Board
considered the extent to which the original hurdle rates, as agreed at the
time of approving the acquisition, have been met. It was determined that
Empire continues to trade at least in line with the Board's original
expectations and that it has remained a successful acquisition for the Group.
TAXATION
The tax rate on adjusted profit before taxation was 24.2% (2024: 23.2%). The
rate is below the headline corporation tax rate in the UK of 25.0% due to the
combined effect of expenses not deductible for taxation, prior year over
provisions and the impact of the lower tax rate of 12.5% in the Republic of
Ireland.
Corporation tax paid in the year amounted to £6.6 million (2024: £2.7
million) and it is anticipated that whilst tax payable in 2026 will be higher,
it will remain lower than the 2026 tax charge due to the availability of
capital allowances and brought forward tax losses.
DIVIDEND
The Board declared an interim dividend of 1.6 pence (2024: 1.3 pence) per
share in September 2025. The proposed final dividend of 3.2 pence (2024: 2.7
pence) per share brings the total dividend for 2025 to 4.8 pence (2024: 4.0
pence) per share, an increase of 20.0%.
The final dividend, if approved by Shareholders, will be paid on 15 May 2026
to those Shareholders on the register at close of business on 17 April 2026.
The ex-dividend date is 16 April 2026. Dividend cover, based on adjusted
EPS, was 2.5 times (2024: 2.5 times).
CASH FLOW
Free cash flow in the year (calculated as net cash generated from operating
activities, less net spend on textile rental items, less the capital element
of leases) was £69.1 million compared to £74.6 million in 2024. The
reduction compared to 2024 reflects, in the main, an £8.4 million working
capital outflow, increased tax payments and increased investment in textile
rental items offset by the improved trading performance.
INVESTMENT IN TEXTILE RENTAL ITEMS
Spend on textile rental items amounted to £65.8 million (2024: £63.2
million). The increase reflects the growth of the Group, both organically
and through acquisition. We have long term relationships with our garment
and linen suppliers and we continue to work collaboratively to ensure
continuity of supply of quality products at the best price.
CAPITAL INVESTMENT AND ACQUISITIONS
We have continued to invest in our estate in order to expand capacity,
increase water, energy and operational efficiencies and improve employee
welfare facilities, spending £35.8 million in the year on property, plant and
equipment. The cost increases being experienced across UK businesses continue
to encourage some of our smaller, independent competitors to review their
business strategy and, as a result, we added contracts with an annualised
revenue of some £4.9 million to our HORECA division during 2025, at a cost of
£3.6 million. We anticipate that further opportunities will continue to
arise.
DEFINED BENEFIT PENSION SCHEME ('SCHEME')
On an IAS 19 basis, the Scheme surplus as at 31 December 2025 was £4.9
million (2024: £3.8 million). Scheme assets reduced by £2.4 million to
£130.3 million, after paying out benefits of £10.0 million during the year,
whilst Scheme liabilities reduced by £3.5 million to £125.4 million. The
improved position reflects higher than expected asset returns, allowances for
the results of a decrease in long-term inflation expectations and for the
reduction in the Scheme's PIE factors over the year offset by actual
short-term inflation being higher than previously assumed and lower mortality
rates.
As a result of the surplus at 31 December 2025, the estimated net notional
interest credit in 2026 will be £0.3 million (2025: £0.2 million).
The Scheme continues to have a significant portion of assets invested to hedge
against movements in liabilities, thereby reducing overall volatility, with
the hedged target having increased to 85% in July 2025. The Scheme's asset
allocation remains under constant review to ensure it aligns with the
medium-term objective of a buy-out of Scheme liabilities.
The triennial actuarial valuation of the Scheme, as at 30 September 2025, is
currently underway and should be completed later this year. In view of the
Scheme surplus shown at the previous valuation date, we have agreed with the
Trustee to cease deficit recovery contributions to the Scheme at least until
the results of this valuation are finalised.
CAPITAL STRUCTURE
The Group's medium to long-term intention is to maintain a capital structure
such that we target leverage of 1.0x - 1.5x, other than for short-term
specific exceptions. Under this framework, our capital allocation policy
remains unchanged and will continue to take into account the following
criteria as part of an ongoing review of capital structure:
§ maintaining a strong balance sheet;
§ continuing capital investment to increase processing capacity and
efficiency;
§ appropriate accretive acquisitions;
§ operating a progressive dividend policy; and
§ distributing any surplus cash to Shareholders.
In August 2025, the Group completed a share buyback programme totalling £30.0
million, originally announced in March 2025 and extended in June 2025. The
Group then announced a further £25.0 million share buyback programme in
September 2025, which subsequently completed in January 2026. This brings
the total amount returned to Shareholders through buybacks since 2022
to £90.3 million. In that same period we have established a presence in
the Republic of Ireland, through the £27.1 million acquisition of
Harkglade Limited, established our Johnsons Luxury Linen business, through
the £5.8 million acquisition of Regency Laundry Limited and the £20.6
million acquisition of Empire Linen Services Limited, invested in the opening
of a new site in Crawley and undertaken significant capital investment
across many of our other sites.
Even after taking into consideration these investments and the return of funds
to Shareholders, including the payment of dividends, the Group remains well
funded, is highly cash generative and has significant headroom with respect to
its leverage target of 1.0 to 1.5 times. Accordingly, the Board will
continue to pursue investment opportunities, both organic and inorganic, and
actively review its options on further share buybacks throughout 2026.
GOING CONCERN
After considering the monthly cash flow projections, the stress tests and the
facilities available to the Group and Company, the Directors concluded that
there was a reasonable expectation that the Group and Company have adequate
resources for their operational needs, will remain in compliance with the
financial covenants set out in the bank facility agreement and will continue
in operation for at least the period to 30 June 2027. Accordingly, and
having reassessed the principal risks and uncertainties, the Directors
considered that it was appropriate to adopt the going concern basis in
preparing the Group and Company financial statements.
KEY PERFORMANCE INDICATORS ('KPIs')
The main KPIs used as part of the assessment of performance of the Group, and
of each segment, are growth in revenue, adjusted EBITDA, adjusted operating
profit and adjusted operating profit margin. Adjusted diluted earnings per
share and ROCE are also used as part of the assessment of performance of the
Group. Non-financial KPIs, as referred to within the Chief Executive's
Operating Review, include our employee and customer survey results and
customer retention statistics.
SUMMARY
The focus of the Group continues to be to expand our Textile Services business
through targeted capital investment, to allow organic volume growth, and
through acquisition.
Ryan Govender
Chief Financial Officer
2 March 2026
CONSOLIDATED INCOME STATEMENT Year ended Year ended
31 December 31 December
2025 2024
Note £m £m
Revenue 2 535.4 513.4
Impairment loss on trade receivables (1.2) (1.2)
All other costs (475.4) (457.5)
Operating profit 2 58.8 54.7
Operating profit before amortisation of intangible assets 2 72.5 62.3
(excluding software amortisation) and exceptional items
Amortisation of intangible assets (excluding software amortisation) (7.7) (7.2)
Exceptional items 3 (6.0) (0.4)
Operating profit 2 58.8 54.7
Finance cost 4 (8.0) (7.5)
Profit before taxation 50.8 47.2
6 (13.8) (11.7)
Taxation charge
37.0 35.5
Profit for the year from continuing operations
Profit for the year from discontinued operations 0.1 0.1
Profit for the year attributable to equity holders 37.1 35.6
EARNINGS PER SHARE 8
Basic earnings per share
- From continuing operations 9.3p 8.5p
- From discontinued operations - -
From total operations 9.3p 8.5p
Diluted earnings per share
- From continuing operations 9.2p 8.4p
- From discontinued operations - -
From total operations 9.2p 8.4p
See note 8 for details of adjusted basic earnings per share and adjusted
diluted earnings per share.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended Year ended
31 December 31 December
2025 2024
Note £m £m
Profit for the year 37.1 35.6
Items that will not be subsequently reclassified to profit or loss
Remeasurement and experience gains on post-employment benefits 16 0.9 3.8
Taxation in respect of remeasurement and experience gains (0.2) (0.9)
Items that may be subsequently reclassified to profit or loss
Cash flow hedges (net of taxation) - fair value losses (0.3) (0.1)
0.3 0.5
- transfers to administrative expenses
Net (loss) / gain on hedge of a net investment (1.4) 1.1
Exchange differences on translation of foreign operations 1.7 (1.2)
Total other comprehensive income for the year 1.0 3.2
Total comprehensive income for the year 38.1 38.8
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Share Share Merger Reserve Capital Redemption Reserve Hedge Reserve Retained Earnings Total
Capital Premium Equity
£m £m £m £m £m £m £m
Balance at 31 December 2023 41.4 16.8 1.6 3.7 (0.6) 216.2 279.1
Profit for the year - - - - - 35.6 35.6
Other comprehensive income - - - - 0.4 2.8 3.2
Total comprehensive income for the year - - - - 0.4 38.4 38.8
Share options (value of employee services) - - - - - 1.5 1.5
Deferred tax on share options - - - - - 0.2 0.2
Issue of share capital 0.1 0.5 - - - - 0.6
Dividend paid - - - - - (13.3) (13.3)
Transactions with Shareholders recognised directly in Shareholders' equity 0.1 0.5 - - - (11.6) (11.0)
Balance at 31 December 2024 41.5 17.3 1.6 3.7 (0.2) 243.0 306.9
Profit for the year - - - - - 37.1 37.1
Other comprehensive income - - - - - 1.0 1.0
Total comprehensive income for the year - - - - - 38.1 38.1
Share options (value of employee services) - - - - - 2.4 2.4
Purchase of own shares by EST - - - - - (0.1) (0.1)
Share buybacks (3.8) - - 3.8 - (54.7) (54.7)
Deferred tax on share options - - - - - (0.5) (0.5)
Current tax on share options - - - - - 0.1 0.1
Issue of share capital 0.1 0.2 - - - - 0.3
Dividend paid - - - - - (17.4) (17.4)
Transactions with Shareholders recognised directly in Shareholders' equity (3.7) 0.2 - 3.8 - (70.2) (69.9)
Balance at 31 December 2025 37.8 17.5 1.6 7.5 (0.2) 210.9 275.1
The Group has an Employee Share Trust (EST) to administer share plans and to
acquire shares, using funds contributed by the Group, to meet commitments to
employee share schemes. At 31 December 2025, the EST held 2,947 shares
(2024: 9,024).
CONSOLIDATED BALANCE SHEET
As at As at
31 December 31 December
2025 2024
Note £m £m
Assets
Non-current assets
Goodwill 9 154.0 153.6
Intangible assets 10 24.9 29.0
Property, plant and equipment 11 168.9 160.0
Right of use assets 12 42.3 43.0
Textile rental items 13 80.0 73.4
Trade and other receivables 0.8 0.5
Post-employment benefits 16 4.9 3.8
475.8 463.3
Current assets
Inventories 2.9 2.3
Trade and other receivables 87.1 82.4
Current income tax assets 0.4 -
Reimbursement assets 2.1 2.6
Cash and cash equivalents 11.0 11.5
Assets classified as held for sale 0.2 0.2
103.7 99.0
Liabilities
Current liabilities
Trade and other payables 93.1 94.3
Borrowings 14 9.0 8.9
Current income tax liabilities - 0.7
Lease liabilities 15 7.4 6.2
Derivative financial liabilities 0.3 0.3
Provisions 2.2 3.2
112.0 113.6
Non-current liabilities
Post-employment benefit obligations 16 0.3 0.3
Deferred income tax liabilities 37.8 28.9
Trade and other payables 0.1 0.2
Borrowings 14 114.4 71.2
Lease liabilities 15 39.4 40.8
Provisions 0.4 0.4
192.4 141.8
Net assets 275.1 306.9
Equity
Capital and reserves attributable to the company's shareholders
Share capital 19 37.8 41.5
Share premium 17.5 17.3
Merger reserve 1.6 1.6
Capital redemption reserve 7.5 3.7
Hedge reserve (0.2) (0.2)
Retained earnings 210.9 243.0
Total equity 275.1 306.9
The notes on pages 21 to 37 form an integral part of these condensed
consolidated financial statements. The condensed consolidated financial
statements on pages 17 to 37 were approved by the Board of Directors on 2
March 2026 and signed on its behalf by:
Ryan Govender
Chief Financial Officer
CONSOLIDATED STATEMENT OF CASH FLOWS Year ended Year ended
31 December 31 December 2024
2025 £m
Note £m
Cash flows from operating activities
Profit for the year 37.1 35.6
Adjustments for:
Taxation charge 6 13.8 11.7
Total finance cost 4 8.0 7.5
Depreciation 94.0 89.6
Amortisation 10 8.0 7.9
Increase in inventories (0.6) (0.4)
Increase in trade and other receivables (1.4) (2.5)
(Decrease) / increase in trade and other payables (6.4) 2.0
Share-based payments 2.4 1.5
Decrease in provisions (0.5) (0.9)
Cash generated from operations 154.4 152.0
Interest paid (7.9) (7.5)
Taxation paid (6.6) (2.7)
Net cash generated from operating activities 139.9 141.8
Cash flows from investing activities
Acquisition of businesses (net of cash acquired) 20 (0.2) (19.6)
Purchase of other intangible assets (3.4) (6.0)
Purchase of property, plant and equipment (35.8) (44.5)
Purchase of software (0.1) (0.1)
Proceeds from sale of property, plant and equipment 0.2 0.3
Purchase of textile rental items (65.8) (63.2)
Proceeds received in respect of special charges 13 2.1 2.3
Interest received - 0.1
Net cash used in investing activities (103.0) (130.7)
Cash flows from financing activities
Proceeds from borrowings 96.8 56.7
Repayment of borrowings (55.3) (47.2)
Capital element of leases (7.1) (6.3)
Share buyback 19 (54.7) -
Proceeds from issue of share capital 0.3 0.6
Purchase of own shares by EST (0.1) -
Dividends paid to company shareholders 7 (17.4) (13.3)
Net cash used in financing activities (37.5) (9.5)
Net (decrease) / increase in cash and cash equivalents (0.6) 1.6
Cash and cash equivalents at beginning of the year 2.2 0.9
Effect of exchange rate fluctuations on cash held 0.3 (0.3)
Cash and cash equivalents at end of the year 17 1.9 2.2
Cash and cash equivalents comprise:
Cash 11.0 11.5
Overdraft (9.1) (9.3)
Cash and cash equivalents at end of the year 1.9 2.2
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1 BASIS OF PREPARATION
Basis of Preparation
Johnson Service Group PLC (the 'Company') and its subsidiaries (together 'the
Group') provide textile rental and related services across the United Kingdom
('UK') and Republic of Ireland ('ROI').
The Company is incorporated and domiciled in the UK, its registered number is
523335 and the address of its registered office is Johnson House, Abbots Park,
Monks Way, Preston Brook, Cheshire, WA7 3GH. The Company is a public limited
company and has its listing on the London Stock Exchange.
The financial information contained within this Preliminary Announcement has
been prepared on a going concern basis and in accordance with UK-adopted
international accounting standards, using accounting policies consistent with
those set out in the 2024 Annual Report.
The financial information set out within this Preliminary Announcement does
not constitute the Group's statutory accounts for the years ended 31 December
2025 or 31 December 2024 within the meaning of Section 434 of the Companies
Act 2006 but is derived from those accounts.
Statutory accounts for 2024 have been delivered to the Registrar of Companies
and those for 2025 will be delivered as soon as practicable, but not later
than 30 April 2026. The auditor has reported on those accounts; the reports
were unqualified and did not contain a statement under Section 498(2) or (3)
of the Companies Act 2006.
Going Concern
Background and Summary
After careful assessment, the Directors have adopted the going concern basis
in preparing these financial statements. The process and key judgments in
coming to this conclusion are set out below.
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Chief
Executive's Operating Review. The financial position of the Group, its cash
flows, liquidity position and borrowing facilities are described in the
Financial Review.
Going Concern Assessment
Cash Flows, Covenants and Stress Testing
For the purposes of the going concern assessment, the Directors have prepared
monthly cash flow projections for the period to 30 June 2027 (the assessment
period). The Directors consider this to be a reasonable period for the going
concern assessment as it enables them to consider the potential impact of
macroeconomic and geopolitical factors over an extended period. The cash
flow projections show that the Group has headroom against its committed
facilities and can meet its financial covenant obligations.
The Group has also performed a reverse stress test against the base monthly
cash flow projections referred to above in order to determine the performance
level that would result in a reduction in headroom against its committed
facilities to nil or a breach of its covenants. Headroom on the Group's
committed facilities would reduce to nil in the event that adjusted operating
profit reduced to approximately 75% of 2025 levels. The Directors do not
consider this scenario to be plausible.
As a further stress test, the Group considered the impact of increasing
interest rates. The Directors do not consider the magnitude of the increase
in interest rates that would be required in order for a covenant to be
breached to be plausible.
The Group has also considered the impact of a more modest increase in interest
rates alongside the reduction in adjusted operating profit to cause a breach
in the interest cover covenant. Again, the Directors do not consider such a
scenario to be plausible.
Each of the stress tests assume no mitigating actions are taken. Mitigating
actions available to the Group, should they be required, include reductions in
discretionary expenditure, particularly that of a capital nature, and ceasing
dividend payments.
Liquidity
The Group has access to a committed Revolving Credit Facility of £135.0
million (the 'Facility') which matures in August 2027. Whilst the existing
facility provides sufficient liquidity for current commitments, we have
commenced discussions with our existing lenders to refinance the facility,
having regard to the future deployment of capital and our target leverage of
1.0 to 1.5 times, and to extend its tenure.
Going Concern Statement
After considering the monthly cash flow projections, the stress tests and the
facilities available to the Group and Company, the Directors have a reasonable
expectation that the Group and Company have adequate resources for their
operational needs, will remain in compliance with the financial covenants set
out in the bank facility agreement and will continue in operation for at least
the period to 30 June 2027. Accordingly, and having reassessed the principal
risks and uncertainties, the Directors considered it appropriate to adopt the
going concern basis in preparing the Group and Company financial statements.
1 BASIS OF PREPARATION (continued)
Forward Looking Statements
Certain statements in these condensed consolidated financial statements
constitute forward-looking statements. Any statement in this document that
is not a statement of historical fact including, without limitation, those
regarding the Group's future expectations, operations, financial performance,
financial condition and business is a forward-looking statement. Such
forward-looking statements are subject to risks and uncertainties that may
cause actual results to differ materially. These risks and uncertainties
include, among other factors, changing economic, financial, business or other
market conditions. These and other factors could adversely affect the
outcome and financial effects of the plans and events described in these
condensed consolidated financial statements. As a result, you are cautioned
not to place reliance on such forward-looking statements. Nothing in this
document should be construed as a profit forecast.
Alternative Performance Measures (APMs)
Throughout this Preliminary Announcement, and consistent with prior years, we
refer to a number of APMs. APMs are used by the Group to provide further
clarity and transparency of the Group's financial performance. The APMs are
used internally by management to monitor business performance, budgeting and
forecasting and for determining Directors' remuneration and that of other
management throughout the business. The APMs, which are not recognised under
UK-adopted international accounting standards, are:
· 'adjusted operating profit', which refers to operating profit
before amortisation of intangible assets (excluding software amortisation) and
exceptional items;
· 'adjusted profit before and after taxation', which refers to
adjusted operating profit less total finance cost;
· 'adjusted EBITDA', which refers to adjusted operating profit plus
the depreciation charge for property, plant and equipment, textile rental
items and right of use assets, plus software amortisation;
· 'adjusted earnings per share' and 'adjusted diluted earnings per
share', which refer to earnings per share calculated based on adjusted profit
after taxation; and
· 'net debt excluding IFRS 16 lease liabilities'.
The Board considers that the above APMs, all of which exclude the effects of
non-recurring items or non-operating events, provide useful information for
stakeholders on the underlying trends and performance of the Group and
facilitate meaningful year on year comparisons.
Limitations of APMs
The Board is cognisant that APMs do have limitations and should not be
regarded as a complete picture of the Group's financial performance.
Limitations of APMs may include, inter alia:
· similarly named measures may not be comparable across companies;
· profit-related APMs may exclude significant, sometimes recurring,
business transactions (e.g. restructuring charges and acquisition-related
costs) that impact financial performance and cash flows; and
· adjusted operating profit, adjusted profit before and after
taxation, adjusted EBITDA, adjusted earnings per share and adjusted diluted
earnings per share all exclude the amortisation of intangibles acquired in
business combinations, but do not similarly exclude the related revenue and
costs.
Reconciliation of APMs to Statutory Performance Measures
Reconciliations between the above APMs and statutory performance measures are
reconciled within this Preliminary Announcement as follows:
· Adjusted operating profit - note 2
· Adjusted profit before and after taxation - note 5
· Adjusted EBITDA - note 5
· Adjusted earnings per share and adjusted diluted earnings per
share - note 8
· Net debt excluding IFRS 16 lease liabilities - note 17
·
2 SEGMENT ANALYSIS
Segment information is presented based on the Group's management and internal
reporting structure as at 31 December 2025.
The chief operating decision-maker (CODM) has been identified as the Executive
Directors. The CODM reviews the Group's internal reporting in order to
assess performance and allocate resources. The CODM determines the operating
segments based on those reports and on the internal reporting structure.
For reporting purposes, the CODM considered the aggregation criteria set out
within IFRS 8, 'Operating Segments', which allows for two or more operating
segments to be combined as a single reporting segment if:
1) aggregation provides financial statement users with information
that allows them to evaluate the business and the environment in which it
operates; and
2) they have similar economic characteristics (for example, where
similar long-term average gross margins would be expected) and are similar in
each of the following respects:
§ the nature of the products and services;
§ the nature of the production processes;
§ the type or class of customer for their products and services;
§ the methods used to distribute their products or provide their services;
and
§ the nature of the regulatory environment (i.e. banking, insurance or public
utilities), if applicable.
The CODM deems it appropriate to present two reporting segments (in addition
to 'Discontinued Operations' and 'All Other Segments'), being:
1) Hotel, Restaurant and Catering ('HORECA'): comprising of our
Johnsons Hotel Linen, Johnsons Hotel, Restaurant and Catering Linen, Johnsons
Luxury Linen and Johnsons Ireland businesses each of which are a separate
operating segment; and
2) Workwear: comprising of our Johnsons Workwear business only.
The CODM's rationale for aggregating the Johnsons Hotel Linen, Johnsons Hotel,
Restaurant and Catering Linen, Johnsons Luxury Linen and Johnsons Ireland
operating segments into a single reporting segment is set out below:
· the gross margins of each operating segment are within a similar
range, with the long-term average margin expected to further align;
· the nature of the customers, products and production processes of
each operating segment are very similar;
· the nature of the regulatory environment is the same due to the
similar nature of products, processes and customers involved; and
· distribution is via exactly the same method across each operating
segment.
The CODM assesses the performance of the reporting segments based on a measure
of operating profit, both including and excluding the effects of non-recurring
items from the reporting segments, such as restructuring costs and impairments
when the impairment is the result of an isolated, non-recurring or
non-operating event. Interest income and expenditure are not included in the
result for each reporting segment that is reviewed by the CODM. Segment
results include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis, for example rental income received by
Johnson Group Properties PLC (the property holding company of the Group) is
credited back, where appropriate, to the paying company for the purpose of
segmental reporting. There have been no changes in measurement methods used
compared to the prior year.
Other information provided to the CODM is measured in a manner consistent with
that in the financial statements. Segment assets exclude deferred income tax
assets, post-employment benefits, derivative financial assets, current income
tax assets and cash and cash equivalents, all of which are managed on a
central basis. Segment liabilities include lease liabilities but exclude
current income tax liabilities, bank borrowings, derivative financial
liabilities, post-employment benefits and deferred income tax liabilities, all
of which are managed on a central basis. These balances are part of the
reconciliation to total assets and liabilities.
Exceptional items have been included within the appropriate reporting segment
as shown on pages 24 to 25.
2 SEGMENT ANALYSIS (continued)
Year ended 31 December 2025 All Other Segments Total
HORECA Workwear
£m £m £m £m
Revenue
Rendering of services 389.5 141.9 - 531.4
Sale of goods 0.3 3.7 - 4.0
Total revenue 389.8 145.6 - 535.4
Cost of Sales (227.9) (87.9) - (315.8)
Distribution costs (64.3) (20.9) - (85.2)
Administrative costs (37.8) (15.8) (8.3) (61.9)
Operating profit / (loss) before amortisation of intangible assets (excluding 59.8 21.0 (8.3) 72.5
software amortisation) and exceptional items
Amortisation of intangible assets (excluding software amortisation) - - (7.7)
(7.7)
Exceptional items (2.1) (1.8) (2.1) (6.0)
Operating profit / (loss) 50.0 19.2 (10.4) 58.8
Total finance cost (8.0)
Profit before taxation 50.8
Taxation charge (13.8)
Profit for the year from continuing operations 37.0
Profit for the year from discontinued operations 0.1
Profit for the year attributable to equity holders 37.1
All of the above revenues are generated in the United Kingdom, with the
exception of £37.5 million generated within the Republic of Ireland.
All Other Segments Total
HORECA
Workwear
£m £m £m £m
Balance sheet information
Segment assets 397.2 164.2 1.8 563.2
Unallocated assets: Post-employment benefits 4.9
0.4
Current income tax assets
11.0
Cash and cash equivalents
Total assets 579.5
Segment liabilities (99.4) (39.8) (3.4) (142.6)
Unallocated liabilities: Bank borrowings (123.4)
(0.3)
Derivative financial liabilities
(0.3)
Post-employment benefit obligations
(37.8)
Deferred income tax liabilities
Total liabilities (304.4)
Other information
Non-current asset additions
- Property, plant and equipment 28.3 5.3 - 33.6
- Right of use assets (including reassessment / modification) 3.7 2.9 0.4 7.0
- Textile rental items 42.6 27.2 - 69.8
- Customer contracts 3.4 - - 3.4
Depreciation and amortisation expense
- Property, plant and equipment 19.3 5.8 - 25.1
- Right of use assets 4.8 2.8 0.1 7.7
- Textile rental items 38.9 22.3 - 61.2
- Capitalised software 0.1 0.2 - 0.3
- Customer contracts 7.7 - - 7.7
With the exception of non-current assets of £18.0 million which were located
in the Republic of Ireland, all non-current assets of the Group reside in the
Group's country of domicile, the United Kingdom.
2 SEGMENT ANALYSIS (continued)
Year ended 31 December 2024 All Other Segments Total
HORECA Workwear
£m £m £m £m
Revenue
Rendering of services 371.0 139.0 - 510.0
Sale of goods 0.2 3.2 - 3.4
Total revenue 371.2 142.2 - 513.4
Cost of Sales (222.6) (85.2) - (307.8)
Distribution costs (61.5) (20.2) - (81.7)
Administrative costs (37.7) (16.5) (7.4) (61.6)
Operating profit / (loss) before amortisation of intangible assets (excluding 49.4 20.3 (7.4) 62.3
software amortisation) and exceptional items
Amortisation of intangible assets (excluding software amortisation) (0.4) - (7.2)
(6.8)
Exceptional items (0.4) - - (0.4)
Operating profit / (loss) 42.2 19.9 (7.4) 54.7
Total finance cost (7.5)
Profit before taxation 47.2
Taxation charge (11.7)
Profit for the year from continuing operations 35.5
Profit for the year from discontinued operations 0.1
Profit for the year attributable to equity holders 35.6
All of the above revenues are generated in the United Kingdom, with the
exception of £34.1 million generated within the Republic of Ireland.
All Other Segments Total
HORECA Workwear
£m £m £m £m
Balance sheet information
Segment assets 390.7 154.4 1.9 547.0
Unallocated assets: 3.8
Post-employment benefit assets
11.5
Cash and cash equivalents
Total assets 562.3
Segment liabilities (102.2) (39.2) (3.7) (145.1)
Unallocated liabilities: Bank borrowings (80.1)
(0.3)
Derivative financial liabilities
(0.3)
Post-employment benefit obligations
(0.7)
Current income tax liabilities
(28.9)
Deferred income tax liabilities
Total liabilities (255.4)
Other information
Non-current asset additions
- Property, plant and equipment 37.9 10.1 - 48.0
- Right of use assets (including reassessment / modifications) 4.7 2.5 0.1 7.3
- Textile rental items 38.9 24.0 - 62.9
- Capitalised software 0.1 - - 0.1
- Customer contracts 6.0 - - 6.0
Depreciation and amortisation expense
- Property, plant and equipment 16.8 5.7 - 22.5
- Right of use assets 4.5 2.4 0.1 7.0
- Textile rental items 39.5 20.6 - 60.1
- Capitalised software 0.3 0.4 - 0.7
- Customer contracts 6.8 0.4 - 7.2
With the exception of non-current assets of £11.6 million which were located
in the Republic of Ireland, all non-current assets of the Group reside in the
Group's country of domicile, the United Kingdom.
3 EXCEPTIONAL ITEMS
2025 2024
£m £m
Costs in relation to business acquisition activity (0.5) (1.4)
Reorganisation costs (3.4) -
Costs in relation to the Main Market listing (1.7) -
Insurance claims (0.4) -
Property related credits - 1.0
Total exceptional items (6.0) (0.4)
Of the £6.0 million of exceptional items, £2.7 million would be included in
cost of sales and £3.3 million would be included within administrative
expenses.
Current year exceptional items
Costs in relation to business acquisition activity
The cost increases being experienced across UK businesses are encouraging some
of our smaller, independent competitors to review their business strategy
which, as a result, allowed us to add contracts with an annualised revenue of
some £4.9 million to our HORECA division during the year. Professional
and transitional services fees of £0.3 million were incurred in relation to
those contract acquisitions. A further £0.2 million was incurred in respect
of other business acquisition related activities.
Reorganisation costs
The project to relocate our Workwear operations from Lancaster to Manchester,
and the subsequent closure of the Lancaster site, resulted in the recognition
of £1.4 million of reorganisation costs during the year. Reorganisation
costs of £0.9 million were also incurred during the period in relation to the
contract acquisitions mentioned above. A further £1.1 million of
reorganisation costs have also been incurred across the Group during the year.
Costs in relation to the Main Market listing
Costs of £1.7 million were incurred during the year in relation to the
Company's ordinary shares being admitted to the Equity Shares (Commercial
Companies) Category of the Official List of the Financial Conduct Authority
and to trading on the Main Market of the London Stock Exchange, which occurred
on 1 August 2025.
Insurance claims
At the end of June 2025, our small industrial workwear processing unit in
Bristol suffered a fire which rendered that part of the site inoperable. To
date, costs of £0.4 million have been recognised within exceptional items.
In accordance with UK-adopted international accounting standards, related
insurance proceeds will be recognised when it is deemed virtually certain that
they will be received.
Prior year exceptional items
Costs in relation to business acquisition activity
Professional fees of £0.4 million were incurred relating to the acquisition
of Empire Linen Services Limited. A further £1.0 million was incurred
in respect of other business acquisition related activities.
Property related credits
Income of £0.6 million was recognised in respect of a non-returnable deposit
received relating to the potential sale of a freehold site in Exeter, which
was destroyed by fire in 2020. In addition, a £0.4 million provision
relating to the same site was released as it was no longer required.
4 FINANCE COST
2025 2024
£m £m
Interest payable on bank loans and overdrafts 5.2 4.8
Amortisation of bank facility fees 0.4 0.4
Finance costs on lease liabilities relating to IFRS 16 (note 15) 2.6 2.3
Notional interest on post-employment benefits (note 16) (0.2) -
Total finance cost 8.0 7.5
5 ALTERNATIVE PERFORMANCE MEASURES (APMs)
Throughout this Preliminary Announcement, we refer to a
number of APMs. A reconciliation of certain of the APMs, to the relevant
statutory performance measure, is shown below. Other reconciliations can be
found in notes 2, 8 and 17.
Adjusted profit before and after taxation 2025 2024
£m £m
Profit before taxation 50.8 47.2
Amortisation of intangible assets (excluding software amortisation) 7.7 7.2
Exceptional items 6.0 0.4
Adjusted profit before taxation 64.5 54.8
Taxation thereon (15.6) (12.7)
Adjusted profit after taxation 48.9 42.1
2025 2024
Adjusted EBITDA
£m £m
Operating profit before amortisation of intangible assets 72.5 62.3
(excluding software amortisation) and exceptional items
Software amortisation 0.3 0.7
Property, plant and equipment depreciation 25.1 22.5
Right of use asset depreciation 7.7 7.0
Textile rental items depreciation 61.2 60.1
Adjusted EBITDA 166.8 152.6
6 TAXATION
2025 2024
£m £m
Current tax
UK corporation tax charge for the year 5.9 2.5
Adjustment in relation to previous years (0.3) (0.3)
Current tax charge for the year 5.6 2.2
Deferred tax
Origination and reversal of temporary differences 7.9 10.1
Adjustment in relation to previous years 0.3 (0.6)
Deferred tax charge for the year 8.2 9.5
Total charge for taxation included in the Consolidated Income Statement 13.8 11.7
The tax charge for the year is higher (2024: lower) than the effective rate of
Corporation Tax in the UK of 25.0% (2024: 25.0%). A reconciliation is
provided below:
2025 2024
£m £m
Profit before taxation 50.8 47.2
Profit before taxation multiplied by the effective rate of Corporation Tax in 12.7 11.8
the UK
Factors affecting taxation charge for the year:
Non-taxable income - (0.3)
Tax effect of expenses not deductible for tax purposes 1.4 1.2
Difference in current and deferred taxation rates - 0.1
Tax rate differential on non-UK profits (0.3) (0.2)
Adjustments in relation to previous years - (0.9)
Total charge for taxation included in the Consolidated Income Statement 13.8 11.7
6 TAXATION (continued)
Taxation in relation to the amortisation of intangible assets (excluding
software amortisation) has decreased the charge for taxation on continuing
operations by £0.9 million (2024: £1.1 million). Taxation in relation to
exceptional items has decreased the charge for taxation on continuing
operations by £0.9 million (2024: increase by £0.1 million).
Deferred income tax balances at the balance sheet date have been measured at a
deferred income tax rate of 25.0% (2024: 25.0%). Deferred tax balances in
relation to balances held in the Republic of Ireland have been recognised at
12.5%, in line with the prevailing rate of tax in 2025 (2024: 12.5%).
During the year, a deferred taxation charge of £0.2 million (2024: £1.0
million) has been recognised in Other Comprehensive Income in relation to
post-employment benefits.
7 DIVIDENDS
2025 2024
Dividend per share
Final dividend 3.20p 2.70p
Interim dividend 1.60p 1.30p
2025 2024
Shareholders' funds committed £m £m
Final dividend 12.1 11.1
Interim dividend 6.3 5.4
The Directors propose the payment of a final dividend in respect of the year
ended 31 December 2025 of 3.2 pence per share. Based upon the number of
shares in issue as at the latest practicable date prior to the publication of
this document, this is expected to utilise Shareholders' funds of £12.1
million and will be paid, subject to Shareholder approval, on 15 May 2026 to
Shareholders on the register of members on 17 April 2026. In accordance with
IAS 10 there is no payable recognised at 31 December 2025 in respect of this
proposed dividend. The trustee of the EST has waived the entitlement to
receive dividends on the Ordinary shares held by the trust.
8 EARNINGS PER SHARE
2025 2024
£m £m
Profit for the financial year from continuing operations attributable to 37.0 35.5
Shareholders
Amortisation of intangible assets from continuing operations (net of taxation) 6.8 6.1
Exceptional costs from continuing operations (net of taxation) 5.1 0.5
Adjusted profit from continuing operations attributable to Shareholders 48.9 42.1
Profit from discontinued operations attributable to Shareholders 0.1 0.1
Total adjusted profit from all operations attributable to Shareholders 49.0 42.2
No. of No. of
shares shares
Weighted average number of Ordinary shares 401,128,215 414,500,856
Potentially dilutive Ordinary shares 1,747,031 3,656,131
Diluted number of Ordinary shares 402,875,246 418,156,987
Basic earnings per share
From continuing operations 9.3p 8.5p
From discontinuing operations - -
From total operations 9.3p 8.5p
Adjustments for amortisation of intangible assets (continuing) 1.7p 1.5p
Adjustment for exceptional items (continuing) 1.2p 0.2p
Adjusted basic earnings per share (continuing) 12.2p 10.2p
Adjusted basic earnings per share (discontinued) - -
Adjusted basic earnings per share from total operations 12.2p 10.2p
Diluted earnings per share
From continuing operations 9.2p 8.4p
From discontinuing operations - -
From total operations 9.2p 8.4p
Adjustments for amortisation of intangible assets (continuing) 1.7p 1.5p
Adjustment for exceptional items (continuing) 1.2p 0.2p
Adjusted diluted earnings per share (continuing) 12.1p 10.1p
Adjusted diluted earnings per share (discontinued) - -
Adjusted diluted earnings per share from total operations 12.1p 10.1p
Basic earnings per share is calculated using the weighted average number of
Ordinary shares in issue during the year, excluding those held by the Employee
Share Trust, based on the profit for the year attributable to Shareholders.
Adjusted earnings per share figures are given to exclude the effects of
amortisation of intangible assets (excluding software amortisation) and
exceptional items, all net of taxation, and are considered to show the
underlying performance of the Group.
For diluted earnings per share, the weighted average number of Ordinary shares
in issue is adjusted to assume conversion of all potentially dilutive Ordinary
shares. The Company has potentially dilutive Ordinary shares arising from
share options granted to employees. Options are dilutive under the SAYE
scheme, where the exercise price together with the future IFRS 2 charge of the
option is less than the average market price of the Company's Ordinary shares
during the year. Options under the LTIP schemes, as defined by IFRS 2, are
contingently issuable shares and are therefore only included within the
calculation of diluted EPS if the performance conditions, as set out in the
Directors' Remuneration Report, are satisfied at the end of the reporting
period, irrespective of whether this is the end of the vesting period or not.
Potentially dilutive Ordinary shares are dilutive at the point, from a
continuing operations level, when their conversion to Ordinary shares would
decrease earnings per share or increase loss per share. Potentially dilutive
Ordinary shares have been treated as dilutive in both years, as their
inclusion in the diluted earnings per share calculation decreases the earnings
per share from continuing operations.
There were no events occurring after the balance sheet date and up until the
date of this report that would have changed significantly the number of
Ordinary shares or potentially dilutive Ordinary shares outstanding at the
balance sheet date if those transactions had occurred before the end of the
reporting period.
9 GOODWILL
2025 2024
£m £m
Cost
Brought forward 155.0 145.8
Impact of foreign exchange translation 0.4 (0.3)
Business combinations - 9.5
Carried forward 155.4 155.0
Accumulated impairment losses
Brought forward 1.4 1.4
Losses in the year - -
Carried forward 1.4 1.4
Carrying amount
Opening 153.6 144.4
Closing 154.0 153.6
During the prior year, the Group acquired 100% of the share capital of Empire
Linen Services Limited ('Empire'). On acquisition, goodwill of £9.5 million
was recognised.
In accordance with UK-adopted international accounting standards, goodwill is
not amortised but is instead tested annually for impairment, or more
frequently if there are indicators that an impairment has arisen, and carried
at cost less accumulated impairment losses. Having completed the 2025
review, no impairment has been recognised in relation to any of the Group's
cash generating units.
10 INTANGIBLE ASSETS
Capitalised software
2025 2024
£m £m
Opening net book value 0.6 1.2
Additions - 0.1
Amortisation (0.3) (0.7)
Closing net book value 0.3 0.6
Other intangible assets
2025 2024
£m £m
Opening net book value 28.4 17.9
Additions 3.4 6.0
Foreign exchange differences 0.5 (0.5)
Business combinations - 12.2
Amortisation (7.7) (7.2)
Closing net book value 24.6 28.4
Other intangible assets comprise of customer contracts and relationships and
brands. During the prior year, the Group recognised £12.2 million in
relation to the acquisition of Empire.
11 PROPERTY, PLANT AND EQUIPMENT
2025 2024
£m £m
Opening net book value 160.0 134.5
Additions 33.6 48.0
Foreign exchange differences 0.6 (0.5)
Business combinations - 0.9
Transfers from right of use assets - 0.1
Depreciation (25.1) (22.5)
Disposals (0.2) (0.3)
Transfers to assets classified as held for sale - (0.2)
Closing net book value 168.9 160.0
CAPITAL COMMITMENTS
Orders placed for future capital expenditure contracted but not provided for
in the financial statements are shown below:
2025 2024
£m £m
Property, plant and equipment 10.3 15.2
12 RIGHT OF USE ASSETS
2025 2024
£m £m
Opening net book value 43.0 40.0
Additions 6.2 1.6
Business combinations - 2.8
Transfers to property, plant and equipment - (0.1)
Reassessment / modification of assets previously recognised 0.8 5.7
Depreciation (7.7) (7.0)
Closing net book value 42.3 43.0
The transfer of assets to property, plant and equipment represents the
reclassification of the cost and associated depreciation of assets to
property, plant and equipment where the lease was repaid in the year and the
asset is now owned.
The reassessment / modification of assets relates to rental increases and
extensions to lease terms that have been agreed during the year in relation to
property and commercial vehicle leases that were in place at the start of the
relevant year.
13 TEXTILE RENTAL ITEMS
2025 2024
£m £m
Opening net book value 73.4 71.9
Additions 69.8 62.9
Foreign exchange differences 0.1 (0.1)
Business combinations - 1.1
Depreciation (61.2) (60.1)
Special charges (2.1) (2.3)
Closing net book value 80.0 73.4
14 BORROWINGS
2025 2024
£m £m
Current
Overdraft 9.1 9.3
Bank loans (0.1) (0.4)
9.0 8.9
Non-current
Bank loans 114.4 71.2
114.4 71.2
123.4 80.1
The maturity of non-current bank loans is as follows:
- Between one and two years 114.4 -
- Between two and five years - 71.3
- Unamortised issue costs of bank loans - (0.1)
114.4 71.2
The currency of the outstanding bank loans is as follows:
- Sterling 83.0 44.0
- Euros 31.4 27.3
114.4 71.3
At 31 December 2025, borrowings were secured and drawn down under a committed
facility dated 8 August 2022. The facility comprises a £135.0 million
revolving credit facility (including overdraft) which runs to August 2027.
Individual tranches are drawn down, in Sterling or Euros, for periods of up to
six months and at SONIA or Euribor rates of interest respectively, prevailing
at the time of drawdown, plus the credit adjustment spread and the applicable
margin. Maturity of the bank loans is shown as non-current to reflect the term
of the facility. Although the tranches are drawn down for periods of up to
six months, in reality the tranches are not repaid in full and therefore it
would be misleading to present the bank loans as current. The margin on the
facility ranges between 1.45% and 2.45% and was 1.45% at 31 December 2025.
Margin is determined on the achievement of leverage ratios.
The secured bank loans are stated net of unamortised issue costs of £0.1
million (2024: £0.5 million) of which £0.1 million is included within
current borrowings (2024: £0.4 million) and £nil is included within
non-current borrowings (2024: £0.1 million).
The Group has two net overdraft facilities, included as part of the overall
£135.0 million borrowing facility, for £5.0 million and £3.0 million (2024:
£5.0 million and £3.0 million) with two of its principal bankers.
15 LEASE LIABILITIES
2025 2024
£m £m
Opening liabilities 47.0 43.2
New leases recognised 6.1 1.6
Business combinations - 2.8
Reassessment / modification of leases previously recognised 0.8 5.7
Lease payments (9.7) (8.6)
Finance costs 2.6 2.3
Closing liabilities 46.8 47.0
Of which are:
Current lease liabilities 7.4 6.2
Non-current lease liabilities 39.4 40.8
Closing liabilities 46.8 47.0
The reassessment / modification of leases relates to rental increases and
extensions to lease terms that have been agreed during the year in relation to
property and commercial vehicle leases that were in place at the start of the
relevant year.
16 POST-EMPLOYMENT BENEFITS
The Group has applied the requirements of IAS 19, 'Employee Benefits' to its
employee pension schemes and post-retirement healthcare benefits.
The Group operates a defined benefit pension scheme, the Johnson Group Defined
Benefit Scheme ('JGDBS'). The JGDBS was closed to future accrual on 31
December 2014. A full actuarial valuation of the JGDBS was carried out as at
30 September 2022 and has been updated to 31 December 2025 by an independent
qualified actuary. The updated actuarial valuation at 31 December 2025
showed that the scheme had a surplus of £4.9 million (2024: £3.8 million).
During the year, no employer or employee contributions were made (2024:
£nil).
The schedule of contributions put in place on 31 October 2023, which
superseded all earlier versions, required no further deficit recovery
payments. Accordingly, deficit recovery payments of £nil (2024: £nil) were
made to the Scheme during the year.
The gross post-employment benefits and associated deferred income tax
liability thereon is shown below:
2025 2024
£m £m
Gross post-employment benefits 4.6 3.5
Deferred income tax liability thereon (1.1) (0.9)
Net asset 3.5 2.6
The reconciliation of the opening gross post-employment benefits to the
closing gross post-employment benefits is shown below:
2025 2024
£m £m
Opening gross post-employment benefits 3.5 (0.3)
Notional interest 0.2 -
Remeasurement and experience gains 0.9 3.8
Closing gross post-employment benefits 4.6 3.5
Which are disclosed within:
Non-current assets 4.9 3.8
Non-current liabilities (0.3) (0.3)
4.6 3.5
17 ANALYSIS OF NET DEBT
Net debt is calculated as total borrowings net of unamortised bank facility
fees, less cash and cash equivalents. Non-cash changes represent the effects
of the recognition and subsequent amortisation of fees relating to the bank
facility, changing maturity profiles, debt acquired as part of an acquisition
and the recognition of lease liabilities entered into during the year.
At 31 December 2024 Cash Flow Foreign Exchange Adjustments At 31 December 2025
Non-cash
Changes
£m £m £m £m £m
Debt due within one year 0.4 - (0.3) - 0.1
Debt due after more than one year (71.2) (41.5) (0.1) (1.6) (114.4)
Lease liabilities (See note 15) (47.0) 7.1 (6.9) - (46.8)
Total debt and lease financing (117.8) (34.4) (7.3) (1.6) (161.1)
Cash and cash equivalents 2.2 (0.6) - 0.3 1.9
Net debt (115.6) (35.0) (7.3) (1.3) (159.2)
At 31 December 2023 Cash Flow Foreign Exchange Adjustments At 31 December 2024
Non-cash
Changes
£m £m £m £m £m
Debt due within one year 0.4 0.3 (0.3) - 0.4
Debt due after more than one year (63.0) (9.5) (0.1) 1.4 (71.2)
Lease liabilities (See note 15) (43.2) 6.3 (10.1) - (47.0)
Total debt and lease financing (105.8) (2.9) (10.5) 1.4 (117.8)
Cash and cash equivalents 0.9 1.6 - (0.3) 2.2
Net debt (104.9) (1.3) (10.5) 1.1 (115.6)
17 ANALYSIS OF NET DEBT (continued)
The cash and cash equivalents figures are comprised of the following balance
sheet amounts:
2025 2024
£m £m
Cash (Current assets) 11.0 11.5
Overdraft (Borrowings, Current liabilities) (9.1) (9.3)
1.9 2.2
Lease liabilities are comprised of the following balance sheet amounts:
2025 2024
£m £m
Amounts due within one year (Lease liabilities, Current liabilities) (7.4) (6.2)
Amounts due after more than one year (Lease liabilities, Non-current (39.4) (40.8)
liabilities)
(46.8) (47.0)
18 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2025 2024
£m £m
(Decrease) / increase in cash in the year (0.6) 1.6
Increase in debt and lease financing (34.4) (2.9)
Change in net debt resulting from cash flows (35.0) (1.3)
Debt acquired through business acquisitions - (2.8)
Lease liabilities recognised during the period (6.9) (7.3)
Non-cash movement in unamortised bank facility fees (0.4) (0.4)
Foreign exchange adjustments (1.3) 1.1
Movement in net debt (43.6) (10.7)
Opening net debt (115.6) (104.9)
Closing net debt (159.2) (115.6)
19 SHARE CAPITAL
2025 2024
Issued and Fully Paid Shares £m Shares £m
Ordinary shares of 10p each:
- At start of year 414,954,767 41.5 414,415,123 41.4
- New shares issued 1,636,260 0.1 539,644 0.1
- Share buybacks (38,293,361) (3.8) - -
At end of year 378,297,666 37.8 414,954,767 41.5
In respect of the two share buyback programmes which were running during the
prior year, 38,293,361 Ordinary shares with a total nominal value of
£3,829,336 were bought back by the Company, and subsequently cancelled, for a
total consideration, including transaction costs, of £54.7 million, which
represented an average price of 142.0p per share. The total shares
repurchased across the two share buyback programmes to 31 December 2025
represented 9.2% of the Company's issued share capital outstanding immediately
prior to the commencement of the share buyback programmes. There were no share
buyback programmes running during the prior year.
Payments in respect of the above transactions were (debited) / credited as
follows:
2025 2024
£m £m
Share capital (3.7) 0.1
Capital redemption reserve 3.8 -
Retained earnings (54.7) -
(54.6) 0.1
20 BUSINESS COMBINATIONS
There were no business combinations during the year.
In the prior year, the Group acquired 100% of the share capital of Empire
Linen Services Limited ('Empire'). Full details are provided in the 2024
Annual Report and Accounts. There have been no subsequent adjustments made to
the fair values for any of the prior year acquisitions.
Cash flows from business combinations
The cash flows in relation to business combinations are summarised below:
2025 2024
£m £m
Net consideration payable - (21.2)
Deferred consideration (0.2) 0.2
Cash acquired - 1.4
Net cash used in investing activities (0.2) (19.6)
21 CONTINGENT LIABILITIES
The Group operates from a number of sites across the UK and the Republic of
Ireland. Some of the sites have operated as laundry sites for many years and
historic environmental liabilities may exist. Such liabilities are not
expected to give rise to any significant loss.
The Group has granted its Bankers and Trustee of the Pension Scheme (the
'Trustee') security over the assets of the Group. The priority of security
is as follows:
§ first ranking security for up to £28.0 million to the Trustee ranking pari
passu with up to £155.0 million of bank liabilities; and
§ second ranking security for the balance of any remaining liabilities to the
Trustee ranking pari passu with any remaining bank liabilities.
During the period of ownership of the Facilities Management division the
Company had given guarantees over the performance of contracts entered into by
the division. As part of the disposal of the division the purchaser agreed
to pursue the release or transfer of obligations under the Parent Company
guarantees and this remains in process. The Sale and Purchase Agreement
contains an indemnity from the purchaser to cover any loss in the event a
claim is made prior to release. In the period until release the purchaser is
to make a payment to the Company of £0.2 million per annum, reduced pro rata
as guarantees are released. Such contingent liabilities are not expected to
give rise to any significant loss.
22 EVENTS AFTER THE REPORTING PERIOD
There were no events occurring after the balance sheet date which should be
disclosed in accordance with IAS 10, 'Events after the reporting period'.
23 PRINCIPAL RISKS AND UNCERTAINTIES
Our Approach to Risk Management
The Board has overall accountability for ensuring that risk is effectively
managed across the Group and, on behalf of the Board, the Audit Committee
coordinates and reviews the effectiveness of the Group's risk management
process. Risks are reviewed by all of our businesses on an ongoing basis and
are measured against a defined set of likelihood and impact criteria. This
is captured in consistent reporting formats enabling the Audit Committee to
review and consolidate risk information and summarise the principal risks and
uncertainties facing the Group. Wherever possible, action is taken to
mitigate, to an acceptable level, the potential impact of identified principal
risks and uncertainties.
The Board formally reviews the most significant risks facing the Group twice a
year, or more frequently should new matters arise. Throughout 2025, the
overall risk environment remained largely unchanged from that reported within
the Group's 2024 Annual Report.
Risk Appetite
The Board interprets appetite for risk as the level of risk that the Group is
willing to take in order to meet its strategic goals. The Board communicates
its approach to, and appetite for, risk to the business through the strategy
planning process and the internal risk governance and control frameworks. In
determining its risk appetite, the Board recognises that a prudent and robust
approach to risk assessment and mitigation must be carefully balanced with a
degree of flexibility so that the entrepreneurial spirit which has greatly
contributed to the success of the Group is not inhibited. Both the Board and
the Audit Committee remain satisfied that the Group's internal risk control
framework continues to provide the necessary element of flexibility without
compromising the integrity of risk management and internal control systems.
Emerging Risks
The Board has established processes for identifying emerging risks and horizon
scanning for risks that may arise over the medium to long term. Emerging and
potential changes to the Group's risk profile are identified through the
Group's risk governance frameworks and processes, and through direct feedback
from management, including changing operating conditions, market and consumer
trends.
23 PRINCIPAL RISKS AND UNCERTAINTIES (continued)
Principal Risks and Uncertainties
The principal risks and uncertainties affecting the Group are summarised
below:
§ Economic and Political Conditions § Information Technology Failures and Cyber Security
§ Cost Inflation § Pandemic or Other National Crisis
§ Failure of Strategy § Health & Safety
§ Recruitment, Retention and Motivation of Employees § Compliance and Fraud
§ Loss of a Processing Facility § Customer Sales and Retention
§ Competition and Disruption § Climate Change and Energy Costs
Full details of the above risks, together with details on how the Board takes
action to mitigate each risk, will be provided in our 2025 Annual Report.
These risks and uncertainties do not comprise all of the risks that the Group
may face and are not necessarily listed in any order of priority. Additional
risks and uncertainties not presently known to the Board, or deemed to be less
material, may also have an adverse effect on the Group.
In accordance with the provisions of the UK Corporate Governance Code, the
Board has taken into consideration the principal risks and uncertainties in
the context of determining whether to adopt the going concern basis of
preparation and when assessing the future prospects of the Group.
24 STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT
OF THE FINANCIAL STATEMENTS
The Directors are responsible for preparing the Strategic Report, Directors'
Report, the Directors' Remuneration Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have to prepare the Group
financial statements in accordance with UK-adopted international accounting
standards and have elected to prepare the Parent Company financial statements
in accordance with United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards and applicable law) including FRS 101
'Reduced Disclosure Framework'. Under company law the Directors must not
approve the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and the Parent Company
and of the profit or loss of the Group for that period.
In preparing the financial statements, the Directors are required to:
§ select suitable accounting policies and then apply them consistently;
§ make judgments and accounting estimates that are reasonable and prudent;
§ for the Group financial statements state whether applicable UK-adopted
international accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements; and
§ for the Parent Company financial statements state whether applicable UK
accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group and the Parent Company's transactions
and disclose with reasonable accuracy at any time the financial position of
the Group and the Parent Company and enable them to ensure that the financial
statements and Director's remuneration report comply with the Companies Act
2006. They are also responsible for safeguarding the assets of the Group and
the Parent Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Group's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
The Directors are responsible for preparing the Annual Report in accordance
with applicable law and regulations. Having taken advice from the Audit
Committee, the Directors consider that the Annual Report and the financial
statements, taken as a whole, provides the information necessary to assess the
Group and the Parent Company's performance, business model and strategy and is
fair, balanced and understandable.
To the best of our knowledge:
§ the Group financial statements, prepared in accordance with UK-adopted
international accounting standards, and the Parent Company financial
statements, prepared in accordance with UK accounting standards give a true
and fair view of the assets, liabilities, financial position and profit or
loss of the Parent Company and the undertakings included in the consolidation,
taken as a whole; and
§ the Strategic Report and Directors' Report include a fair review of the
development and performance of the business and the position of the Parent
Company and the undertakings included in the consolidation, taken as a whole,
together with a description of the principal risks and uncertainties that they
face.
The Directors confirm that:
§ so far as each Director is aware, there is no relevant audit information
of which the Group and the Parent Company's auditor is unaware; and
§ the Directors have taken all the steps that they ought to have taken as a
Director in order to make themselves aware of any relevant audit information
and to establish that the Group and the Parent Company's auditor is aware of
that information.
25 PRELIMINARY ANNOUNCEMENT
A copy of this Preliminary Announcement is available on request to all
Shareholders by post from the Company Secretary, Johnson Service Group PLC,
Johnson House, Abbots Park, Monks Way, Preston Brook, Cheshire, WA7 3GH. The
announcement can also be accessed at www.jsg.com.
The 2025 Annual Report will be made available on the Group's website
(www.jsg.com) on or before 23 March 2026.
26 APPROVAL
The Preliminary Announcement was approved by the Board of Directors on 2 March
2026.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
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. END PREJTMBTMTMMTAF
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