A company that provides textiles and workwear for the hotel and catering sector has said that its profits have recovered after it was hit by the hospitality sector freeze during the pandemic.
Cheshire-headquartered Johnson Service Group reported its adjusted operating profits hit £12.8m in the first half of the year, jumping back up from a £9.5m loss last year.
The firm announced on Thursday that it would be reinstating its dividend policy with an interim dividend of 0.8p per share.
READ MORE: Click here to sign up to the BusinessLive North West newsletter
Looking ahead, the company said its resilient business model will help to cushion the impact of soaring price inflation. Furthermore, a large proportion of its energy costs are fixed at prices significantly below current rates, which should protect against volatile wholesale gas prices, the group said.
Chief executive Peter Egan said: "During the six-month period we have achieved a significant improvement in the group's financial performance and are focusing on capital investment across the estate to improve energy and production efficiencies and underpin capacity, alongside implementing mitigating actions to seek to address current and future inflationary pressures.
"Our organic growth is underpinned by increased sales activity and a strengthening pipeline of new business enquiries, whilst our strong balance sheet and cash generation means that we remain well placed to pursue earnings accretive acquisitions.
"Reflecting our strong performance and resumption of more normal levels of cash generation, we have today announced the recommencement of our progressive dividend policy and our intention to launch a share buyback programme of up to £27.5m.
"Trading momentum since June 2022 has remained encouraging, with volumes in HORECA for the six weeks to the middle of August increasing to 92% of normal.
"Nevertheless, and despite implementing material price increases across our customer base, we do expect some margin pressure in the short term, particularly in respect of energy costs.
"However, based on our assumption that volumes follow the normal seasonal pattern over the coming months and are not impacted by a reduction in discretionary spending, or a further material deterioration in the energy markets, as a result of ongoing economic factors, we expect the full year outturn to be in line with current market expectations."
READ NEXT:
