Johnson Service Group rents and launders linen for hotels and restaurants, and workwear for UK companies. Its profits were squeezed by energy and labour costs after the pandemic, and it is now rebuilding its margin while buying back shares. Revenue passed £500m in 2024, but the margin of 12.1% is still short of the board's target of at least 14.0% in 2026.
Clean sheets for hotels, uniforms for corporates
Johnson runs textile rental and laundry across the UK and the Republic of Ireland. It has two divisions. HORECA (hotels, restaurants and catering) made £371m of revenue in 2024. Workwear made £142m.
In HORECA, Johnsons Hotel Linen serves large hotel groups and independents. A separate arm serves restaurants, catering and corporate events. Johnsons Luxury Linen serves four- and five-star hotels, mostly in London and the South East. Johnsons Ireland serves hospitality and healthcare. Workwear rents uniforms, protective wear and laundry services to UK corporates in all sectors.
Labour is the biggest cost, at 44.6% of 2024 revenue. Energy took 8.8%, against 6.2% in 2019. The company says it has been listed on AIM since 10 June 2008. 4 Mar 2025 4 Jun 2025
Hotels reopen, costs jump
In 2023 revenue rose 20.6% to £465m, helped by more hotel volume and price rises. Organic growth, which excludes acquisitions, was 16.3%. HORECA revenue rose 28% in the year and Workwear 5%.
Energy and labour costs stayed far above 2019 levels, so the adjusted operating margin was only 10.9%. The company bought Regency, a luxury linen business, in February 2023 and Celtic Linen in August 2023, spending about £33m on M&A. It also returned £29.8m to shareholders in 2023, and its bank debt rose from £13.7m to £62m. 16 Jan 2024 5 Mar 2024 28 Nov 2023
Crawley, Empire and the 14% margin target
In 2024 the company invested heavily. It built a new £16m laundry in Crawley and opened a depot to reach London hotels. It also bought Empire Linen for £20.6m on 2 September 2024. Empire serves luxury London hotels and makes £14m of revenue a year.
Management set out a path back to 'previous levels' of margin. By September 2024 the board's target was an adjusted operating margin of at least 14.0% in 2026. In May 2024 it said its energy pricing policy could add £3m, £7m and £9m to profit in 2024, 2025 and 2026. Crawley cost about £3.7m in 2024 and was due to break even during 2026.
The shares rose from 130p in April 2024 to 167p in May, after the first-quarter update. They drifted back to 136p by December. By then the margin was 12.1%, and the 2024 dividend had risen to 4.0p. 1 May 2024 3 Sep 2024 11 Sep 2024 4 Mar 2025
Slower growth, more buybacks, a new listing
Growth cooled as price rises faded. Organic revenue rose 2.2% in the first quarter of 2025 and 1.4% in the first half. Employer national insurance was set to add about £6m a year from April 2025. Workwear customer retention was 93%, and management expected it to return to 95%.
Capital returns grew. A buyback of up to £30m ran until August 2025. A £25m programme followed to early 2026, and another began in May 2026. Total cash returned since September 2022 reached £90.3m by January 2026. Bank debt rose to about £99m by June 2025.
On 1 August 2025 the shares moved from AIM to the Main Market of the London Stock Exchange. 1 May 2025 4 Jun 2025 10 Jul 2025 1 Aug 2025 29 Aug 2025 2 Sep 2025 8 Jan 2026 7 May 2026
“We expect gearing to remain below 1x EBITDA throughout 2025” 1 May 2025
Prices have to chase costs
The group's recovery depends on passing higher costs on to customers. Management called 2024 price talks 'challenging'. Energy cost fell as a share of revenue, but labour cost rose. Margin gains came from lower energy costs and higher volumes, and the 2026 target still has a gap to close.
The company fixes energy prices months ahead. That gives certainty, but costs do not fall at once when market prices do. Acquisitions and a new site add cost before they add profit, as Crawley showed. 4 Mar 2025 1 May 2024
“Price increase and renewal discussions have been challenging during 2024 as we have sought to offset the cost pressures faced by the business.” 4 Mar 2025
Steady CEO, a new finance chief
Peter Egan is chief executive. His stated strategy is organic growth, investment in sites and earnings-enhancing acquisitions that extend geographic coverage. Management has met its guidance of profit in line with market expectations in each period covered. It also raised the dividend and bought back shares while debt rose.
Chief financial officer Yvonne Monaghan, after 40 years with the company, stepped down on 1 October 2025. Ryan Govender replaced her. In March 2026 Egan exercised share options and sold 229,113 shares at 131p.
The board is also changing. Lysanne Gray joins as a non-executive director on 1 June 2026 and will chair the audit committee. Chris Girling retires on 31 December 2026. Large holders include FIL (14.1%), Tweedy Browne (about 12%), PrimeStone (about 10%) and Artemis (9.8%). 4 Mar 2025 24 Mar 2025 1 Oct 2025 23 Mar 2026 3 Mar 2026
Two more years of growth, shares near 136p
The company reported higher revenue and profit and a wider operating margin for 2025 on 3 March 2026. It also reported revenue and profit growth for the first half of 2026 on 8 September 2026. The company announcements supplied here give no figures for either period, so the 2025 margin against the 14.0% target is not stated.
The shares ended October 2026 at 136p. They had been about 165p in June. 3 Mar 2026 8 Sep 2026
The 2026 margin test
The board has said that an adjusted operating margin of at least 14.0% will be reached in 2026. It repeated this in July 2025. The 2026 full-year results are the next test.
Other items the company has flagged: gearing below 1x EBITDA through 2025, a move to buy out the defined benefit pension scheme in the medium term, and further investment in sites and acquisitions that meet its margin and return targets. The company has not said whether buybacks will continue after the programme launched in May 2026. 4 Mar 2025 10 Jul 2025 3 Sep 2024 1 May 2025
Written by AI from Johnson Service Group's own announcements since Oct 2023 · every paragraph links to its sources