Johnson Service Group plc (LON:JSG) said its full-year results will come in slightly ahead of market expectations while announcing it has completed the acquisition of Fresh Linen Holdings Limited.
The workwear and linen supplier said Fresh Linen - which supplies 900,000 weekly linen items to hotels and gym clubs in the south-east of England - was bought for £12.5mln in cash on a debt-free basis.
Fresh Linen posted revenue of £16.7mln and £1.1mln in pre-tax profit for the year ended 30 June, with £4.3mln in net assets including a £1.7mln freehold site.
Johnson Service also said its new £10mln linen plant in Leeds will open in spring to provide extra processing capacity ahead of the usually busy summer months.
In a note to clients after the update, analysts at Peel Hunt increased their full-year profit before tax forecast for Johnson Service to £47.1mln from £46.6mln to reflect the stronger than expected underlying trading, pushing earnings per share up to 10.3p from 10.2p.
“The acquisition increases the scale of the hospitality business and extends Johnson’s geographical reach (in an area where Johnson is underrepresented) as well as diversifying the customer profile within the hotel linen portfolio,” the number-crunchers said.
In early trade on Friday, Johnson Service shares rose 2% to 202.3p.