Shares of Johnson Service Group (LON:JSG) jumped over 12% on Tuesday after the company reported full-year financial results that met expectations and announced a £30 million share buyback program. The positive performance was further bolstered by the firm's consideration of a move to the London Stock Exchange’s Main Market (LON:LSEG), signaling its ambitions for broader investor engagement.
The company reported revenue of £513 million, in line with prior forecasts, and delivered an adjusted EBITA of £62.3 million, slightly beating RBC Capital Markets’ estimate of £61.5 million. Adjusted earnings per share came in at 10.1p, outperforming the consensus estimate of 9.9p. Additionally, the dividend per share was raised by 43% to 4.0p, maintaining the company’s commitment to a 2.5x cover.
Margin improvements were notable, with the adjusted EBITA margin rising by 120 basis points to 12.1%. This improvement was driven partly by a reduction in energy costs, which fell from 10% of revenues to 8.8%. However, labour costs increased to 44.6% of revenues due to broader inflationary pressures.
Free cash flow saw a significant boost, rising to £74.6 million from £55.2 million, while net debt remained steady at £68.6 million, in line with guidance.
Looking ahead, Johnson Service Group remains cautiously optimistic despite potential headwinds from higher taxes. The company projects further margin expansion, targeting levels exceeding 14.0% by 2026—above RBC’s estimate of 13.5%. With 73% of its energy costs secured for 2025, the firm is well-positioned to navigate ongoing market volatility.
The consideration to transition to the London Stock Exchange’s Main Market is part of a broader strategy to enhance investor engagement and unlock additional value.
Investors seeking more detailed insights into Johnson Service Group’s financial performance can review key valuation metrics using Financial Modeling Prep’s:
Johnson Service Group’s strong financial results, combined with its strategic initiatives and enhanced shareholder returns, have positioned the company for continued growth. As it explores a move to the LSEG Main Market, the firm is set to further engage investors and capitalize on its solid performance amid a challenging economic landscape.
