Johnson Service shares fall despite first-half profit growth

(Sharecast News) - Shares in Johnson Service Group fell sharply on Tuesday despite the textile rental and laundry services provider reporting higher first-half profits, as investors focused on a softer outlook for its hospitality-focused HORECA division.

Group revenue for the six months to 30 June edged up 0.2% to £258.0m, while adjusted operating profit increased 3.8% to £29.8m.

The larger HORECA division, which provides linen and laundry services to customers across the hotel, restaurant and catering sectors, generated £184.0m of first-half revenue, down 0.8% year-on-year, or 2.0% organically.

Meanwhile, Workwear revenue rose 2.6% to £74.0m.

Looking ahead, Johnson Service said the seasonal uplift in HORECA trading over the summer had been more modest than originally anticipated, with the softer trading environment expected to continue through the remainder of 2026.

Nevertheless, the group maintained its expectation for a full-year adjusted operating margin of at least 14%, supported by operational efficiencies, disciplined cost management and lower energy costs.

Chief executive Peter Egan said: "Although the seasonal uplift in HORECA was more modest than originally anticipated, we expect to deliver another year of progress and remain on track to achieve our targeted adjusted operating margin of at least 14.0% for the full year."

The stock was down 5.9% at 135.2p by 1427 BST.

See the latest RNS on Investegate.