Johnson Service Group (JSG) raised £85 million after revenues were affected by the pandemic

Johnson Service Group (JSG), the Industrial Textiles Services giant, has raised GBP85 million through a share placing, aiming to improve its liquidity and strengthening its balance sheet. The company generated pre-tax profits of £48m in 2019 but the lockdown has had a huge impact on its operations.

The company will issue 73,915,188 new ordinary shares at a price of 115 pence each, with the move to be conducted through an accelerated bookbuilding process. The placing price reflects a discount of 20% to the company’s closing price of 143.00p on May 28th. Shares in Johnson Services Group were 9.3% lower at 129.71p on May 29th in London.

JSG’s hospitality division is forecasted to reach 75% of typical activity by the end of this year and it is expected not to return to previous levels until spring 2022. The company forecasts that its workwear division will improve to around 90% of typical activity this year and predicts it will take the whole of 2021 before revenues normalise.

Revenues during May 2020 are expected to be slightly ahead of April 2020, as a small number of customers reopen. The Board and senior management team have all accepted a temporary salary reduction of 20%, initially for a three-month period from 1 April. Certain other employees have also agreed to a temporary salary reduction of 10%, for the same period.