REG - Johnson Service Grp. - AGM Statement & Launch of Share Buyback Programme

Johnson ServiceAnnouncement

Today 07:00

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RNS Number : 3208D  Johnson Service Group PLC  07 May 2026

7 May 2026

TIDM: JSG

Johnson Service Group PLC

("JSG" or "the Group")

 

AGM Statement

Launch of £55.0 million Share Buyback Programme

 

Ahead of its Annual General Meeting to be held later today, JSG, a
leading textile services provider in the UK and Republic of Ireland, provides
the following update:

 

Current Trading

Group revenue in the first three months of the year increased by 1.4% to
£123.0 million (2025: £121.4 million), with organic revenue growth
contributing 0.7%.

 

Within Workwear, organic revenue growth of 3.9% in the first quarter reflects
encouraging sales momentum, to both new and existing customers, and the
implementation of price increases.

 

HORECA organic revenue softened slightly to (0.6%) in the first quarter.  As
previously highlighted, price increases and contract renewals remain
challenging and, alongside the ongoing regional and sector variations
experienced in 2025, we continue to see some market churn, particularly within
the independent hotel and restaurant sector.

 

Cost Management

We have continued to proactively manage ongoing cost inflation pressures,
particularly in relation to labour, through a combination of resource
management to maximise productivity, price increases and capital investment,
focused on delivery of improved operational efficiencies and lower energy
usage.

 

In relation to energy, we continued to forward fix prices on a rolling basis
in-line with our policy.  This provides a high degree of certainty over
energy costs for the coming months and means that they do not immediately
reflect increases, or reductions, in spot prices.

 

For 2026, we have fixed approximately 85% of our anticipated electricity
usage, 90% of our anticipated gas usage and hedged some 70% of our anticipated
diesel requirement.  Looking ahead to 2027, we have fixed approximately 60%
and 70% of our anticipated electricity and gas usage, respectively, and will
lock-in further prices as opportunities allow.

 

Financing

We have completed the refinance of our committed revolving credit facility,
increasing it from £135.0 million to £175.0 million with, subject to lender
consent, a further £50.0 million accordion option.  The new facility matures
in April 2030, with an option to extend for a further year with lender
consent.  Bank covenants remain unchanged, comprising leverage (net debt to
adjusted EBITDA) of less than three times and interest cover of at least four
times.  The margin on the refinanced facility remains linked to our leverage
covenant and has reduced to a range of 1.30% to 2.30% over the relevant SONIA
or EURIBOR rate, as applicable.  The current margin is 1.30%.

 

 

Capital Structure and Share Buyback

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 takes into account: maintaining a strong balance sheet;
investing in our estate to increase efficiency; appropriate accretive
acquisitions; upholding a progressive dividend policy; and, to the extent that
there remains surplus cash, distributing it to Shareholders.

 

Accordingly, the Board is pleased to confirm that, in addition to the £90.3
million returned to Shareholders through share buybacks since 2022, it intends
to launch a further £55.0 million share buyback programme.  Further details
of the programme will be announced separately today.

 

The Board will continue to actively review its options on capital allocation,
evaluating the balance between investing in our acquisition strategy, organic
growth ambitions and returns to Shareholders.

 

Balance Sheet

Net debt, including IFRS 16 liabilities, was £161.9 million at the end of
March 2026 (December 2025: £159.2 million) and is expected to increase to
some £195.0 million at June 2026, reflective of the timing of dividend
payments, the share buyback programme that will be announced separately today,
working capital movements and capital expenditure, with leverage towards the
lower end of our target range.

 

Leverage at the year-end is expected to be similar to June 2026, reflective of
the Group's increased cash generation in the second half of the year, which is
typically higher than in the first half as a result of summer trading, being
offset by the impact of the share buyback programme.

 

Outlook

We have a well invested business with a strong balance sheet and a highly cash
generative model, allowing us to capitalise on further earnings enhancing
opportunities as they arise.

 

We have yet to see any material impact of the ongoing geopolitical uncertainty
in the Middle East, the intensity or duration of which we are unable to
predict.  Given what we know currently, we expect any cost consequences in
2026 to be manageable.

 

Whilst HORECA has experienced a slower start to the year in a challenging
market environment, we expect normal seasonality to support improved volumes
over the summer months.

 

The Board continues to expect to deliver another year of progress and margin
improvement and, therefore, we remain on track towards achieving our targeted
adjusted operating margin of at least 14.0% in 2026.

 

 

 Enquiries:
 Johnson Service Group PLC

 Peter Egan, CEO

 Ryan Govender, CFO

 Tel:  01928 704 600

 Investec Investment Banking  Camarco (Financial PR)

 David Flin                   Ginny Pulbrook

 Virginia Bull                Letaba Rimell

 Tom Brookhouse

 Tel:  020 7597 5970          Tel:  020 3757 4992 / 4981

 

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