Preliminary Results for the Year Ended 31 Dec 2025

Johnson Service Group PLC

03 March 2026

 

3 March 2026

TIDM: JSG

Johnson Service Group PLC

('JSG' or 'the Group')

Preliminary Results for the Year Ended 31 December 2025

Resilient sales performance and strong profit growth in FY25

The Board expects another year of growth and margin improvement in FY26

FINANCIAL HIGHLIGHTS

	2025	2024	Increase
Adjusted results
Revenue	£535.4m	£513.4m	4.3%
Adjusted operating profit1	£72.5m	£62.3m	16.4%
Adjusted operating profit margin1	13.5%	12.1%	140bp
Adjusted EBITDA margin1	31.2%	29.7%	150bp
Adjusted profit before taxation2	£64.5m	£54.8m	17.7%
Adjusted diluted earnings per share3	12.1p	10.1p	19.8%
Statutory results
Operating profit	£58.8m	£54.7m	7.5%
Profit before taxation	£50.8m	£47.2m	7.6%
Diluted earnings per share	9.2p	8.4p	9.5%
Dividend	4.8p	4.0p	20.0%

Notes

1    'Adjusted EBITDA' refers to operating profit before amortisation of intangible assets (excluding software amortisation) and exceptional items (defined as 'adjusted operating profit') plus the depreciation charge for property, plant and equipment, textile rental items and right of use assets, plus software amortisation.

2    'Adjusted profit before taxation' refers to adjusted operating profit less total finance costs.

3    'Adjusted diluted earnings per share' refers to diluted earnings per share calculated on adjusted profit after taxation.

§ On an organic basis, revenue for the Group increased by 1.4% on 2024 levels (Hotel, Restaurant and Catering ('HORECA'): +1.0%; Workwear +2.4%).

§ Strong growth of 16.4% in adjusted operating profit to £72.5 million (2024: £62.3 million) resulting in an improved margin of 13.5% (2024: 12.1%), both in line with market expectations.

§ Revenue within HORECA increased to £389.8 million (2024: £371.2 million) whilst adjusted operating profit increased to £59.8 million (2024: £49.4 million), giving a margin of 15.3% (2024: 13.3%).

§ Workwear revenue increased to £145.6 million (2024: £142.2 million), with adjusted operating profit increasing to £21.0 million (2024: £20.3 million), giving a margin of 14.4% (2024: 14.3%).

§ 20.0% increase in full year dividend, reflecting the Board's confidence in the future.

§ The £55.0 million of share buyback programmes announced in 2025 were completed in January 2026, bringing the total amount returned to Shareholders through share buybacks since 2022 to £90.3 million.

§ Net debt increased to £159.2 million (December 2024: £115.6 million), reflecting capital investment across our estate of £35.9 million, the impact of the share buyback programmes undertaken during the year and dividend payments of £17.4 million, offset by the improved trading performance.

§ Leverage, calculated as adjusted EBITDA compared to total net debt, was 0.95 times.

OPERATIONAL HIGHLIGHTS

§ Reflective of the current uncertain economic outlook, overall HORECA volumes for the year were satisfactory and in line with our expectations, albeit with some regional and sector variations.

§ Workwear volumes remain stable, benefitting from a combination of new installations and customer retention improving to 94% (2024: 93%).

§ Energy costs continuing to reduce as a percentage of revenue.

§ Price increases, together with productivity improvements as a result of our ongoing targeted investment in the business, helped to offset cost inflation.

§ Fourth Sustainability Report published in June 2025.

§ Gas and plastic reduction targets set for 2026.

OUTLOOK

§ We are continuing to focus on expanding the Group through targeted investment in our existing sites and identifying further earnings enhancing opportunities to deploy capital.

§ We have a strong balance sheet and a highly cash generative model, so are well placed to capitalise on appropriate opportunities as they arise.

§ The Board will continue to actively review its options on further share buybacks throughout 2026.

§ Notwithstanding the current economic uncertainty, particularly the impact of significantly increased labour and premises costs on some of our end customers, the Board expects to deliver another year of growth.

§ We remain on track towards achieving our targeted adjusted operating margin of at least 14.0% in 2026.

Peter Egan, Chief Executive Officer of Johnson Service Group, commented:

"Our strong earnings growth and improved margin, in line with market expectations, reflects our investment to further improve operational efficiencies, continued focus on tight cost control and service excellence.

Our successful admission to the Main Market on 1 August 2025 marks a significant milestone in our growth journey.  The move reflects our confidence in the Group's future, our commitment to delivering long-term value for all stakeholders and positions us well for the next phase of growth. With robust cash generation, we continue to have a disciplined approach to capital allocation and focus on delivering value to shareholders, evaluating the balance between investing in our acquisition strategy, organic growth ambitions and returns to Shareholders.

Entering 2026, the regional and sector variations in HORECA volumes experienced in 2025 continued.  Notwithstanding this, and recognising normal seasonality driving stronger trading over the summer months, we expect to deliver another year of growth across the Group and we remain on track towards achieving our target of an improved adjusted operating margin for 2026 of at least 14.0%.  I would like to extend my thanks to all of our employees, whose hard work and significant contribution has helped to deliver this robust performance and outlook."

SELL-SIDE ANALYSTS' MEETING

A presentation for sell-side analysts will be held today at 09:30 at Investec Bank plc, 30 Gresham Street, London, EC2V 7QP, details of which will be distributed by Camarco.  A copy of the presentation, together with a recording of the meeting, will be available on the Group's website (www.jsg.com) following the meeting.

ENQUIRIES

Johnson Service Group PLC
Peter Egan, CEO
Ryan Govender, CFO
Tel: [phone] (on the day)
Tel: [phone] (thereafter)
Investec Bank plc	Camarco (Financial PR)
David Flin	Ginny Pulbrook
Virginia Bull	Letaba Rimell
Tom Brookhouse
Tel: [phone]	Tel: [phone]

CHIEF EXECUTIVE'S OPERATING REVIEW

BASIS OF PREPARATION

Throughout this statement, and consistent with prior years, a number of alternative performance measures ('APMs') are used to describe the Group's performance.  APMs are not recognised under UK-adopted international accounting standards.  Whilst the Board uses APMs to manage and assess the performance of the Group, and believes they are representative of underlying trading, facilitate meaningful year on year comparisons and hence provide useful information to stakeholders, it is cognisant that they do have limitations and should not be regarded as a complete picture of the Group's financial performance.  APMs, which include adjusted operating profit, adjusted profit before taxation, adjusted EBITDA, adjusted earnings per share, adjusted diluted earnings per share and net debt excluding IFRS 16 lease liabilities, are defined within note 1 (Basis of Preparation) and are reconciled to statutory reporting measures in notes 2, 5, 8 and 17.

FINANCIAL OVERVIEW

Financial Results

Total revenue for the year increased by £22.0 million, or 4.3%, to £535.4 million (2024: £513.4 million).  Whilst price increase and renewal discussions continued to be challenging during 2025, we remain focused on delivering excellent service which is commensurate with our pricing levels.  On an organic basis, revenue in HORECA increased by 1.0% over 2024 and Workwear increased by 2.4%.

We have continued to proactively manage ongoing input cost inflation pressures, particularly in relation to labour following the significant increases to UK National Insurance, the UK National Living Wage and, within the Republic of Ireland, the National Minimum Wage, through a combination of price increases and capital investment, which delivers increased operational efficiencies and lowers energy and water usage.  Energy, as a percentage of revenue, has continued to reduce but remains a higher cost than has been experienced historically.  Our stated policy of proactively forward fixing energy prices for the coming months to obtain and manage some degree of certainty over the cost of supply is being maintained, giving us visibility of a further reduction, as a percentage of revenue, in 2026.  Labour costs, as a percentage of revenue, are expected to remain relatively stable into 2026.

Adjusted operating profit increased by 16.4% to £72.5 million (2024: £62.3 million) whilst adjusted operating profit margin improved by 140 basis points to 13.5% (2024: 12.1%), reflecting strong operational control and the benefit of efficiencies through our targeted investment in the business.

Adjusted EBITDA increased by 9.3% to £166.8 million (2024: £152.6 million) giving an increased margin of 31.2% (2024: 29.7%).  Adjusted profit before taxation increased by 17.7% to £64.5 million (2024: £54.8 million).

The exceptional charge of £6.0 million (2024: £0.4 million) represents £1.7 million of costs in relation to our move to the Main Market, £3.4 million of reorganisation costs, including £1.4 million relating to the closure of our Lancaster Workwear site, £0.5 million in relation to business acquisition activity and £0.4 million of costs incurred in respect of the fire at the Bristol Workwear site.

CHIEF EXECUTIVE'S OPERATING REVIEW (continued)

Statutory operating profit increased to £58.8 million (2024: £54.7 million) whilst statutory profit before taxation, after amortisation of intangible assets (excluding software amortisation) of £7.7 million (2024: £7.2 million) and the exceptional items referred to above, increased to £50.8 million (2024: £47.2 million).

Adjusted diluted earnings per share increased by 19.8% to 12.1 pence (2024: 10.1 pence).

Dividends

An interim dividend of 1.6 pence (2024: 1.3 pence) per share was declared at the time of announcing our interim results.  We are pleased to recommend a final dividend of 3.2 pence per share, taking the full year dividend to 4.8 pence (2024: 4.0 pence) per share.  This year-on-year increase of 20.0% reflects the Board's confidence in the future performance of the Group.  Dividend cover remains at 2.5 times.

Share Buyback Programme

In the period since September 2022, we have returned £90.3 million to Shareholders through share buyback programmes.  In line with our capital allocation policy, the Board will continue to actively review its options on further share buybacks throughout 2026, taking into account the cash generation profile of the Group and the level of headroom available under its committed bank facilities.  Further details are set out within the Financial Review.

OPERATIONAL REVIEW

Our Businesses

The Group provides textile rental and related services throughout the UK and Republic of Ireland.

Within our Hotel, Restaurant and Catering ('HORECA') division, 'Johnsons Hotel Linen', our high-volume linen business, primarily serves group and independent large hotel customers, 'Johnsons Hotel, Restaurant and Catering Linen' provides premium linen services to restaurant, hospitality and corporate event customers whilst 'Johnsons Luxury Linen' provides bespoke linen predominantly to four and five-star luxury hotels.  Also, within HORECA, 'Johnsons Ireland' serves both hospitality and healthcare customers.  Our Workwear division comprises solely of 'Johnsons Workwear', which predominantly provides workwear rental, protective wear and laundry services to UK businesses across a wide range of sectors including food manufacturing and industrial.

The impact of significantly increased labour and premises costs is being felt by some of our end customers, particularly within the hospitality market, making price increases and renewals more challenging.  Whilst the market remains competitive, we remain focused on consistently delivering excellent service that aligns with our pricing levels and investing in our estate to drive continued operational efficiencies.

Energy Cost Management

Energy costs (comprising gas, electricity and fuel) have remained elevated throughout the year and continue to be so.  Costs for 2025 represented 7.4% of revenue, a reduction from 8.8% of revenue in 2024 but significantly higher than in 2019 where the cost was 6.2% of revenue.

For many years, our policy in the UK has been to fix energy prices on a rolling basis, building a position so that the upcoming months are largely fixed.  This provides certainty but also means that costs do not immediately reflect falls, or increases, in spot prices.  We have continued this policy of proactively fixing energy prices and, as at the end of February 2026, we had fixed some 90% of our anticipated electricity usage and some 95% of our anticipated gas usage for the first half of 2026 and approximately 75% and 85%, respectively, for the second half of 2026.  In addition, we have hedged approximately 70% of our anticipated diesel requirement across 2026.

Looking further ahead, we currently have, based on our anticipated usage, approximately 55% electricity and approximately 70% gas at fixed prices for 2027, with reducing amounts into 2028 and 2029, and will continue to lock in prices as opportunities allow.

Labour

Labour remains the biggest cost of our operations.  In the year to 31 December 2025 labour, as a percentage of revenue, increased 140 basis points to 46.0%, significantly higher than the 44.6% in the year to 31 December 2024 and the 43.0% in the year to 31 December 2019.

The higher percentage above is reflective of increases in National Minimum Wage and Pay Related Social Insurance in January 2025 in the Republic of Ireland and increases in the National Living Wage and National Insurance in the UK in April 2025.  The annualised impact of the increase in employer National Insurance contributions in the UK alone is some £6.0 million, which we have mitigated and managed through price increases, operational efficiencies and other measures.  Labour costs, as a percentage of revenue, are expected to remain relatively stable into 2026.

HORECA Division

Revenue within HORECA increased to £389.8 million (2024: £371.2 million) whilst adjusted operating profit increased to £59.8 million (2024: £49.4 million), giving a margin of 15.3% (2024: 13.3%).  This significant increase in profitability reflects, in part, production efficiencies resulting from more predictable volumes and the benefits of capital investment together with lower energy costs.  Adjusted EBITDA for the year increased to £122.9 million (2024: £110.5 million) with an improved margin of 31.5% (2024: 29.8%). 

Johnsons Hotel Linen

Volumes within Johnsons Hotel Linen were in line with our expectations, with new business coming from a combination of successful sales team activity and new build hotels or extensions with existing customers.  We remain easy to do business with and continue to provide solutions to customers' challenges, with excellent on time and in full service levels.  Installations of new business continued to be well organised and efficient, often with very short lead times, and our externally facilitated customer satisfaction survey resulted in a high score of 88%, similar to the prior year.  We received excellent feedback relating to our service team's partnership approach and they continue to build excellent customer relationships.  Testament to our reputation for delivering excellent service levels, in 2025 Johnsons Hotel Linen agreed a five-year contract renewal with one of its largest customers.

As in previous years, capital investment focused on driving operational efficiency and increasing capacity whilst reducing our carbon emissions.  At Edinburgh and Pwllheli, we replaced sorting systems and automatic dryers whilst our Reading, Chester and Cardiff sites benefitted from the installation of new boilers and the replacement of older ironers for newer models.  A number of stand-alone washing machines were also upgraded across the estate and we have continued to invest in our vehicle fleet, resulting in excellent reliability and a reduction in emissions.

As part of continually improving our sustainability credentials, plastic wrapping of clean, delivered product has been removed from our Birmingham, Chester, Clacton and Pwllheli sites.  Instead, linen is now delivered in reusable, washable bags which can also be used for linen storage at customers' premises.  Roll out across the estate will continue in 2026.

Johnsons Hotel, Restaurant and Catering Linen

Against a difficult hospitality market backdrop, the effect of significantly increased business costs has particularly impacted some of the customers served by Johnsons Hotel, Restaurant and Catering Linen, with price increases and renewals becoming more challenging.  In addition, whilst new sales activity has remained broadly consistent with prior periods, market churn, particularly within the independent hotel and restaurant sector, has increased in recent months, resulting in a decline in volumes in some regions.

Whilst the market remains competitive, we are focused on continuing to deliver an excellent level of service to our customers, as reflected in our annual customer survey results where an improved overall score of 89% was achieved, with several sites achieving a world class score of over 90%.

The significant cost increases being experienced across UK businesses are encouraging some of our smaller, independent competitors to review their business strategy and, as a result, we added customer contracts with an annualised revenue of some £4.9 million to the division during 2025.  We anticipate that further, similar, opportunities will continue to arise.

Many of our existing customers located in London and the Southeast region have now been successfully transferred into our new Crawley site, which began processing in March 2025.  This, in addition to new business wins, resulted in peak processing volumes during the year building to some 50% of capacity, in line with our expectations.  The Crawley laundry process is designed to consume significantly less energy than a traditional laundry, provides significant water recycling opportunities, utilises renewable energy sources and undertakes deliveries using vehicles powered by HVO, which provides for a significant reduction in vehicle emissions.

Investment in the wider estate has also continued, with replacement boilers, water recycling systems, ironers and garment finishing equipment having been installed across several of our sites.  All new investments have a pre-requisite to reduce carbon emissions against our 2030 targets and improve production efficiency.

Johnsons Luxury Linen

Johnsons Luxury Linen experienced strong volumes in 2025, aided by both high retention levels and a number of high-profile customer wins.  The sales pipeline is encouraging and supports our growth ambitions in securing additional five-star luxury hotel customers.

The site in Tottenham, acquired in September 2024, has been successfully integrated into the Group, with local management now working collaboratively with colleagues in both Corsham and across the wider Group, sharing knowledge, experience and best practice methodologies.

Both sites have benefitted from strategic investment in plant and equipment.  In particular, the £1.3 million investment in plant and machinery at our Corsham site at the end of 2024, which increased processing capacity there by almost 20%, is now being utilised as the site achieved record volumes and efficiencies in 2025.  Plans for increasing processing capacity are being developed to further expand this part of our business.

Johnsons Ireland

The rollout of our Johnsons Ireland rebranding is now complete, with Johnsons Celtic Linen in the south and Johnsons Belfast in the north supplying customers across the entire island of Ireland.  Our vehicles and sites have been rebranded and we have launched our new website.

In hospitality, volumes were as expected albeit with some regional variations.  Healthcare volumes have continued to rise, with an increase in day procedures performed by hospitals.  Overall, our end markets remain competitive with any customer attrition often due to the customer seeking pricing levels which are not commensurate with the level of service we provide.  We continue to concentrate on our proven track record of providing a high quality and reliable service to our customers, easy and available access to our team and consistent communication.

Similar to the UK, increasing labour costs in the Republic of Ireland remain a challenge following the 6.3% increase in minimum wage and the increase in Pay-Related Social Insurance ('PRSI'), both of which were effective on 1 January 2025.  As part of the overall mitigation plan, we are working to continue improving efficiencies and processes, helped by the capital investment programme across the estate.

The capital investment of £6.3 million in Wexford and Naas, which started in 2024, has been completed. This investment includes the installation of a state-of-the-art sortation system, a high-speed ironer line, a continuous batch washer system, additional drying capacity and a new automated chemical dosing system.  These new pieces of equipment help to optimise washing throughput and energy efficiency and have increased capacity in Wexford by some 20% and in Naas by some 40%.  In addition to installing new processing equipment, we have also upgraded employee welfare facilities and offices.

Workwear Division

Revenue for the Workwear division increased by 2.4% to £145.6 million (2024: £142.2 million).  Adjusted EBITDA was £52.1 million (2024: £49.4 million) with an increased margin of 35.8% (2024: 34.7%).  Adjusted operating profit was £21.0 million (2024: £20.3 million), resulting in an improved margin of 14.4% (2024: 14.3%), reflecting the implementation of price increases throughout the year to offset input cost inflation.

Our sales team had a successful year in acquiring new business.  They have confidence in our ability to deliver excellent service and focus on this when participating in new commercial opportunities and tenders.  Similarly, the service team secured significant contract renewals with multiple key customers, often identifying opportunities for expansion within those accounts.

Customer retention is now 94% (2024: 93%) and trending towards historic levels, validating the strength of our customer relationships, the consistent delivery of our service and our responsiveness to evolving customer needs.  The renewal rate also reflects the effectiveness of our proactive engagement strategy, built around personalised account management and ongoing customer interaction.

The externally facilitated satisfaction survey for existing customers saw us achieve a result of 84%, whilst the new customer satisfaction survey achieved a robust score of almost 86%.  These results reflect our commitment to delivering high quality service, building trusted relationships and continually improving the customer experience.

Capital expenditure in the year included investment in forty new commercial vehicles, laundry processing equipment and boiler systems at several sites, all of which help deliver operational resilience and assist in reducing our carbon footprint.

The relocation of operations from Lancaster to Manchester, and the subsequent closure of the Lancaster site, was successfully completed during the year with no disruption to service delivery.  The cost of the project was £1.4 million and has been charged to exceptional costs.

At the end of June 2025, our small industrial workwear processing unit in Bristol suffered a fire which rendered that part of the site inoperable.  Work continues to be processed at our sites in Exeter and Treforest and, importantly, there has been no disruption to customer service.  Business interruption insurance is in place and we expect to finalise the claim with insurers in 2026 however, a £0.4 million charge has been recognised within exceptional items during 2025.

SUSTAINABILITY

The Board has overall responsibility for environmental and social matters and we recognise our duty to stakeholders to operate the business in an ethical and responsible manner.  We remain committed to further developing our environmental and social responsibility agenda, recognising that it plays a major part in leading and influencing our people and operations.

In June 2025, we published our fourth Sustainability Report which set out the progress we have made and the targets we have set ourselves. We have continued to build on the foundations of our sustainability strategy with communication and involvement of employees at all levels being a key focus.

Further details of our achievements during 2025 and our targets for 2026, ongoing initiatives and actions for the future will be set out within the Group's 2025 Annual Report.

EMPLOYEES

We place great importance on the contribution that each of our employees make to the success of the Group. Our employees are key in our ability to deliver customer service levels which exceed our customers' expectations. The Board would like to thank them for their support and hard work during 2025.

Ensuring employees achieve their full potential remains a key focus of the Group. Providing a range of training, education, apprenticeship and development programmes for employees allows them to take advantage of career progression opportunities within the Group and helps to build a workforce for the future.

Employee engagement activity remains ongoing, supporting our people and providing safe, clean and enjoyable environments to work in. The scores from our employee engagement surveys were outstanding, reflecting the commitment and enthusiasm of our employees across all of our operating locations.

BOARD CHANGES

As previously announced, Ryan Govender was appointed to the Board as Chief Financial Officer ('CFO') in succession to Yvonne Monaghan, with effect from 1 October 2025.  Yvonne retired from the Board on the same date, having served seventeen years as CFO.  The Board would like to thank Yvonne for her significant input and unwavering support during her time with the Group.

As separately announced today, Lysanne Gray will join the Board as an Independent Non-Executive Director with effect from 1 June 2026 and will succeed Chris Girling as Audit Committee Chair following the announcement of the Group's interim results for the six-month period ended 30 June 2026.  In addition, Nicola Keach, who has served as an Independent Non-Executive Director of the Company since June 2022, will succeed Chris Girling as Senior Independent Director with effect from 1 June 2026.  Chris will continue to serve as an Independent Non-Executive Director until he steps down and retires from the Board on 31 December 2026.

FORTHCOMING INVESTOR ACTIVITIES

We are committed to clearly communicating our strategy and activities to our stakeholders, in order that they receive a balanced and complete view of our performance.  An audio recording of the sell-side analysts' meeting, which will be held today at 09:30, will be made available on the Group's website (www.jsg.com) following the conclusion of the meeting.

OUTLOOK

Our successful admission to the Main Market in August 2025 marks a significant milestone in our growth journey.  The move reflects our confidence in the Group's future, our commitment to delivering long-term value for all stakeholders and positions us well for the next phase of growth.

We have entered 2026 as a strongly invested business with a resilient business model and a proven ability to navigate periods of economic uncertainty.  Whilst the challenges created by the significantly increased cost of labour in both the UK and the Republic of Ireland remain difficult to predict, in part due to the impact on customer behaviour, we remain focused on delivering excellent service which is commensurate with our pricing levels.  Our scale and depth of expertise give us the capability not only to mitigate potential challenges through continued operational efficiencies and disciplined cost management, but also to move decisively when appropriate opportunities arise.

We have continued to fix a proportion of our future energy costs and improve the efficiency of our sites to help offset cost inflation and stabilise our cost base and we are continuing to engage with our customers regarding the pricing of our services as we advance through 2026.  New sales across the business are a focus, particularly in the regions where we have added capacity.

We have a strong balance sheet and a highly cash generative model, so are well placed to capitalise on appropriate opportunities as they arise.  We are continuing to focus on expanding the Group through targeted investment in our existing sites and identifying further earnings enhancing opportunities to deploy capital.  In line with our capital allocation policy, the Board will continue to actively review its options on further share buybacks throughout 2026.

Entering 2026, the regional and sector variations in HORECA volumes experienced in 2025 continued.  Notwithstanding this, and recognising normal seasonality driving stronger trading over the summer months, the Board expects to deliver another year of growth across the Group and we remain on track towards achieving our targeted adjusted operating margin of at least 14.0% in 2026.

Peter Egan

Chief Executive Officer

2 March 2026

FINANCIAL REVIEW

FINANCIAL RESULTS

Total revenue for the year to 31 December 2025 increased 4.3% to £535.4 million (2024: £513.4 million).

Adjusted EBITDA was £166.8 million (2024: £152.6 million) giving an improved margin of 31.2% (2024: 29.7%) and, in-line with our expectations, improving from the 29.3% margin achieved in the first half of 2025.

Segmental revenue, adjusted operating profit and adjusted operating profit margin are as follows:

	2025				2024
	Revenue	Adjusted Operating Profit	Margin		Revenue	Adjusted Operating Profit	Margin
	£m	£m	%		£m	£m	%
HORECA	389.8	59.8	15.3		371.2	49.4	13.3
Workwear	145.6	21.0	14.4		142.2	20.3	14.3
Central Costs	-	(8.3)	-		-	(7.4)	-
Group	535.4	72.5	13.5		513.4	62.3	12.1

Statutory operating profit was £58.8 million (2024: £54.7 million) whilst adjusted operating profit, which increased by 16.4%, was in line with market consensus at £72.5 million (2024: £62.3 million).

The total finance cost increased to £8.0 million (2024: £7.5 million) and included £5.6 million (2024: £5.2 million) of bank interest, £2.6 million (2024: £2.3 million) of interest in respect of IFRS 16 lease liabilities and a credit of £0.2 million (2024: £nil) in respect of notional interest on pension liabilities.

The exceptional charge of £6.0 million (2024: £0.4 million) represents £0.5 million in relation to business acquisition activity, £3.4 million of reorganisation costs, including £1.4 million relating to the closure of our Lancaster Workwear site, £1.7 million of costs in relation to the Company's ordinary shares being admitted to the Equity Shares (Commercial Companies) Category of the Official List of the Financial Conduct Authority and to trading on the Main Market of the London Stock Exchange and £0.4 million of costs incurred relating to the fire at the Bristol Workwear site.

Adjusted profit before taxation was £64.5 million (2024: £54.8 million) whilst statutory profit before taxation, after amortisation of intangible assets (excluding software amortisation) of £7.7 million (2024: £7.2 million) and the exceptional charge outlined above, was £50.8 million (2024: £47.2 million).

Adjusted diluted earnings per share increased by 19.8% to 12.1 pence (2024: 10.1 pence).

FINANCIAL REVIEW (continued)

FINANCING

Bank debt at the end of the year was £112.4 million (December 2024: £68.6 million) reflecting capital investment across our estate of £35.9 million, the impact of a £54.7 million cash outflow during the year in respect of share buybacks and the payment of £17.4 million of dividends, offset by the improved trading performance.  Including IFRS 16 liabilities, net debt at December 2025 was £159.2 million (December 2024: £115.6 million).

The Group remains well funded, with access to a committed revolving credit facility of £135.0 million which matures in August 2027.  Whilst the existing facility provides sufficient liquidity for current commitments, we have commenced discussions with our existing lenders to refinance the facility, having regard to the future deployment of capital and our target leverage of 1.0 to 1.5 times, and to extend its tenure.

Bank covenants comprise leverage and interest cover tests.  Leverage is calculated as adjusted EBITDA compared to total net debt, including IFRS 16 liabilities.  The agreed covenant is for the ratio to be not more than three times and the ratio at 31 December 2025 was 0.95 times.  Interest cover compares adjusted operating profit to total interest cost, with a minimum covenant ratio of four times.  Our current scenario planning provides significant headroom against the covenants.

Interest payable on bank borrowings is based upon SONIA or, in the case of Euro denominated borrowings, EURIBOR, plus a margin, linked to our leverage covenant, which ranges from 1.45% to 2.45%.  The current margin is 1.45%.

RETURN ON CAPITAL EMPLOYED ('ROCE')

ROCE, calculated as rolling 12-month adjusted operating profit divided by the average of opening and closing Shareholders' equity, net debt and post-employment benefits for the same 12-month period, increased to 17.1% (2024: 15.5%).

INVESTMENT APPRAISAL

Prior to undertaking any major investment, be it a significant capital project or an acquisition opportunity, the Board, as part of its evaluation of the investment opportunity with reference to the factors set out in Section 172(1) of the Companies Act 2006, diligently assesses the associated strategic opportunities available to the Group together with the cost, return, risk and reward of each project before deciding whether or not to proceed.  Relevant financial considerations include discounted cash payback, ROCE, projected profitability and impact on margin.

Following the acquisition of Empire Linen Services Limited ('Empire') in 2024, and with the benefit of a full year's trading throughout 2025, the Board considered the extent to which the original hurdle rates, as agreed at the time of approving the acquisition, have been met.  It was determined that Empire continues to trade at least in line with the Board's original expectations and that it has remained a successful acquisition for the Group.

TAXATION

The tax rate on adjusted profit before taxation was 24.2% (2024: 23.2%).  The rate is below the headline corporation tax rate in the UK of 25.0% due to the combined effect of expenses not deductible for taxation, prior year over provisions and the impact of the lower tax rate of 12.5% in the Republic of Ireland.

Corporation tax paid in the year amounted to £6.6 million (2024: £2.7 million) and it is anticipated that whilst tax payable in 2026 will be higher, it will remain lower than the 2026 tax charge due to the availability of capital allowances and brought forward tax losses.

DIVIDEND

The Board declared an interim dividend of 1.6 pence (2024: 1.3 pence) per share in September 2025.  The proposed final dividend of 3.2 pence (2024: 2.7 pence) per share brings the total dividend for 2025 to 4.8 pence (2024: 4.0 pence) per share, an increase of 20.0%.

The final dividend, if approved by Shareholders, will be paid on 15 May 2026 to those Shareholders on the register at close of business on 17 April 2026.  The ex-dividend date is 16 April 2026.  Dividend cover, based on adjusted EPS, was 2.5 times (2024: 2.5 times).

CASH FLOW

Free cash flow in the year (calculated as net cash generated from operating activities, less net spend on textile rental items, less the capital element of leases) was £69.1 million compared to £74.6 million in 2024.  The reduction compared to 2024 reflects, in the main, an £8.4 million working capital outflow, increased tax payments and increased investment in textile rental items offset by the improved trading performance.

INVESTMENT IN TEXTILE RENTAL ITEMS

Spend on textile rental items amounted to £65.8 million (2024: £63.2 million).  The increase reflects the growth of the Group, both organically and through acquisition.  We have long term relationships with our garment and linen suppliers and we continue to work collaboratively to ensure continuity of supply of quality products at the best price.

CAPITAL INVESTMENT AND ACQUISITIONS

We have continued to invest in our estate in order to expand capacity, increase water, energy and operational efficiencies and improve employee welfare facilities, spending £35.8 million in the year on property, plant and equipment. The cost increases being experienced across UK businesses continue to encourage some of our smaller, independent competitors to review their business strategy and, as a result, we added contracts with an annualised revenue of some £4.9 million to our HORECA division during 2025, at a cost of £3.6 million.  We anticipate that further opportunities will continue to arise.

DEFINED BENEFIT PENSION SCHEME ('SCHEME')

On an IAS 19 basis, the Scheme surplus as at 31 December 2025 was £4.9 million (2024: £3.8 million).  Scheme assets reduced by £2.4 million to £130.3 million, after paying out benefits of £10.0 million during the year, whilst Scheme liabilities reduced by £3.5 million to £125.4 million.  The improved position reflects higher than expected asset returns, allowances for the results of a decrease in long-term inflation expectations and for the reduction in the Scheme's PIE factors over the year offset by actual short-term inflation being higher than previously assumed and lower mortality rates.

As a result of the surplus at 31 December 2025, the estimated net notional interest credit in 2026 will be £0.3 million (2025: £0.2 million).

The Scheme continues to have a significant portion of assets invested to hedge against movements in liabilities, thereby reducing overall volatility, with the hedged target having increased to 85% in July 2025.  The Scheme's asset allocation remains under constant review to ensure it aligns with the medium-term objective of a buy-out of Scheme liabilities.

The triennial actuarial valuation of the Scheme, as at 30 September 2025, is currently underway and should be completed later this year.  In view of the Scheme surplus shown at the previous valuation date, we have agreed with the Trustee to cease deficit recovery contributions to the Scheme at least until the results of this valuation are finalised.

CAPITAL STRUCTURE

The Group's medium to long-term intention is to maintain a capital structure such that we target leverage of 1.0x - 1.5x, other than for short-term specific exceptions.  Under this framework, our capital allocation policy remains unchanged and will continue to take into account the following criteria as part of an ongoing review of capital structure:

§ maintaining a strong balance sheet;

§ continuing capital investment to increase processing capacity and efficiency;

§ appropriate accretive acquisitions;

§ operating a progressive dividend policy; and

§ distributing any surplus cash to Shareholders.

In August 2025, the Group completed a share buyback programme totalling £30.0 million, originally announced in March 2025 and extended in June 2025.  The Group then announced a further £25.0 million share buyback programme in September 2025, which subsequently completed in January 2026.  This brings the total amount returned to Shareholders through buybacks since 2022 to £90.3 million.  In that same period we have established a presence in the Republic of Ireland, through the £27.1 million acquisition of Harkglade Limited, established our Johnsons Luxury Linen business, through the £5.8 million acquisition of Regency Laundry Limited and the £20.6 million acquisition of Empire Linen Services Limited, invested in the opening of a new site in Crawley and undertaken significant capital investment across many of our other sites.

Even after taking into consideration these investments and the return of funds to Shareholders, including the payment of dividends, the Group remains well funded, is highly cash generative and has significant headroom with respect to its leverage target of 1.0 to 1.5 times.  Accordingly, the Board will continue to pursue investment opportunities, both organic and inorganic, and actively review its options on further share buybacks throughout 2026.

GOING CONCERN

After considering the monthly cash flow projections, the stress tests and the facilities available to the Group and Company, the Directors concluded that there was a reasonable expectation that the Group and Company have adequate resources for their operational needs, will remain in compliance with the financial covenants set out in the bank facility agreement and will continue in operation for at least the period to 30 June 2027.  Accordingly, and having reassessed the principal risks and uncertainties, the Directors considered that it was appropriate to adopt the going concern basis in preparing the Group and Company financial statements.

KEY PERFORMANCE INDICATORS ('KPIs')

The main KPIs used as part of the assessment of performance of the Group, and of each segment, are growth in revenue, adjusted EBITDA, adjusted operating profit and adjusted operating profit margin.  Adjusted diluted earnings per share and ROCE are also used as part of the assessment of performance of the Group.  Non-financial KPIs, as referred to within the Chief Executive's Operating Review, include our employee and customer survey results and customer retention statistics.

SUMMARY

The focus of the Group continues to be to expand our Textile Services business through targeted capital investment, to allow organic volume growth, and through acquisition.

Ryan Govender

Chief Financial Officer

2 March 2026

CONSOLIDATED INCOME STATEMENT		Year ended 31 December 2025	Year ended 31 December 2024
	Note	£m	£m
Revenue	2	535.4	513.4
Impairment loss on trade receivables		(1.2)	(1.2)
All other costs		(475.4)	(457.5)
Operating profit	2	58.8	54.7
Operating profit before amortisation of intangible assets (excluding software amortisation) and exceptional items	2	72.5	62.3
Amortisation of intangible assets (excluding software amortisation)		(7.7)	(7.2)
Exceptional items	3	(6.0)	(0.4)
Operating profit	2	58.8	54.7
Finance cost	4	(8.0)	(7.5)
Profit before taxation		50.8	47.2
Taxation charge	6	(13.8)	(11.7)
Profit for the year from continuing operations		37.0	35.5
Profit for the year from discontinued operations		0.1	0.1
Profit for the year attributable to equity holders		37.1	35.6
EARNINGS PER SHARE	8
Basic earnings per share
- From continuing operations		9.3p	8.5p
- From discontinued operations		-	-
From total operations		9.3p	8.5p
Diluted earnings per share
- From continuing operations		9.2p	8.4p
- From discontinued operations		-	-
From total operations		9.2p	8.4p

See note 8 for details of adjusted basic earnings per share and adjusted diluted earnings per share.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME						Year ended  31 December  2025			Year ended 31 December 2024
					Note		£m	£m
Profit for the year							37.1	35.6
Items that will not be subsequently reclassified to profit or loss
Remeasurement and experience gains on post-employment benefits					16		0.9	3.8
Taxation in respect of remeasurement and experience gains							(0.2)	(0.9)
Items that may be subsequently reclassified to profit or loss
Cash flow hedges (net of taxation) - fair value losses							(0.3)	(0.1)
- transfers to administrative expenses							0.3	0.5
Net (loss) / gain on hedge of a net investment							(1.4)	1.1
Exchange differences on translation of foreign operations							1.7	(1.2)
Total other comprehensive income for the year							1.0	3.2
Total comprehensive income for the year							38.1	38.8

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

	Share  Capital		Share Premium	Merger Reserve	Capital Redemption Reserve	Hedge Reserve	Retained  Earnings	Total  Equity
	£m		£m	£m	£m	£m	£m	£m
Balance at 31 December 2023		41.4	16.8	1.6	3.7	(0.6)	216.2	279.1
Profit for the year		-	-	-	-	-	35.6	35.6
Other comprehensive income		-	-	-	-	0.4	2.8	3.2
Total comprehensive income for the year		-	-	-	-	0.4	38.4	38.8
Share options (value of employee services)		-	-	-	-	-	1.5	1.5
Deferred tax on share options		-	-	-	-	-	0.2	0.2
Issue of share capital		0.1	0.5	-	-	-	-	0.6
Dividend paid		-	-	-	-	-	(13.3)	(13.3)
Transactions with Shareholders recognised directly in Shareholders' equity		0.1	0.5	-	-	-	(11.6)	(11.0)
Balance at 31 December 2024		41.5	17.3	1.6	3.7	(0.2)	243.0	306.9
Profit for the year		-	-	-	-	-	37.1	37.1
Other comprehensive income		-	-	-	-	-	1.0	1.0
Total comprehensive income for the year		-	-	-	-	-	38.1	38.1
Share options (value of employee services)		-	-	-	-	-	2.4	2.4
Purchase of own shares by EST		-	-	-	-	-	(0.1)	(0.1)
Share buybacks		(3.8)	-	-	3.8	-	(54.7)	(54.7)
Deferred tax on share options		-	-	-	-	-	(0.5)	(0.5)
Current tax on share options		-	-	-	-	-	0.1	0.1
Issue of share capital		0.1	0.2	-	-	-	-	0.3
Dividend paid		-	-	-	-	-	(17.4)	(17.4)
Transactions with Shareholders recognised directly in Shareholders' equity		(3.7)	0.2	-	3.8	-	(70.2)	(69.9)
Balance at 31 December 2025		37.8	17.5	1.6	7.5	(0.2)	210.9	275.1

The Group has an Employee Share Trust (EST) to administer share plans and to acquire shares, using funds contributed by the Group, to meet commitments to employee share schemes.  At 31 December 2025, the EST held 2,947 shares (2024: 9,024). 

CONSOLIDATED BALANCE SHEET

		As at 31 December 2025	As at 31 December 2024
	Note	£m	£m
Assets
Non-current assets
Goodwill	9	154.0	153.6
Intangible assets	10	24.9	29.0
Property, plant and equipment	11	168.9	160.0
Right of use assets	12	42.3	43.0
Textile rental items	13	80.0	73.4
Trade and other receivables		0.8	0.5
Post-employment benefits	16	4.9	3.8
		475.8	463.3
Current assets
Inventories		2.9	2.3
Trade and other receivables		87.1	82.4
Current income tax assets		0.4	-
Reimbursement assets		2.1	2.6
Cash and cash equivalents		11.0	11.5
Assets classified as held for sale		0.2	0.2
		103.7	99.0
Liabilities
Current liabilities
Trade and other payables		93.1	94.3
Borrowings	14	9.0	8.9
Current income tax liabilities		-	0.7
Lease liabilities	15	7.4	6.2
Derivative financial liabilities		0.3	0.3
Provisions		2.2	3.2
		112.0	113.6
Non-current liabilities
Post-employment benefit obligations	16	0.3	0.3
Deferred income tax liabilities		37.8	28.9
Trade and other payables		0.1	0.2
Borrowings	14	114.4	71.2
Lease liabilities	15	39.4	40.8
Provisions		0.4	0.4
		192.4	141.8
Net assets		275.1	306.9
Equity
Capital and reserves attributable to the company's shareholders
Share capital	19	37.8	41.5
Share premium		17.5	17.3
Merger reserve		1.6	1.6
Capital redemption reserve		7.5	3.7
Hedge reserve		(0.2)	(0.2)
Retained earnings		210.9	243.0
Total equity		275.1	306.9

The notes on pages 21 to 37 form an integral part of these condensed consolidated financial statements.  The condensed consolidated financial statements on pages 17 to 37 were approved by the Board of Directors on 2 March 2026 and signed on its behalf by:

Ryan Govender

Chief Financial Officer

CONSOLIDATED STATEMENT OF CASH FLOWS	Note	Year ended 31 December 2025 £m	Year ended 31 December 2024 £m
Cash flows from operating activities
Profit for the year		37.1	35.6
Adjustments for:
Taxation charge	6	13.8	11.7
Total finance cost	4	8.0	7.5
Depreciation		94.0	89.6
Amortisation	10	8.0	7.9
Increase in inventories		(0.6)	(0.4)
Increase in trade and other receivables		(1.4)	(2.5)
(Decrease) / increase in trade and other payables		(6.4)	2.0
Share-based payments		2.4	1.5
Decrease in provisions		(0.5)	(0.9)
Cash generated from operations		154.4	152.0
Interest paid		(7.9)	(7.5)
Taxation paid		(6.6)	(2.7)
Net cash generated from operating activities		139.9	141.8
Cash flows from investing activities
Acquisition of businesses (net of cash acquired)	20	(0.2)	(19.6)
Purchase of other intangible assets		(3.4)	(6.0)
Purchase of property, plant and equipment		(35.8)	(44.5)
Purchase of software		(0.1)	(0.1)
Proceeds from sale of property, plant and equipment		0.2	0.3
Purchase of textile rental items		(65.8)	(63.2)
Proceeds received in respect of special charges	13	2.1	2.3
Interest received		-	0.1
Net cash used in investing activities		(103.0)	(130.7)
Cash flows from financing activities
Proceeds from borrowings		96.8	56.7
Repayment of borrowings		(55.3)	(47.2)
Capital element of leases		(7.1)	(6.3)
Share buyback	19	(54.7)	-
Proceeds from issue of share capital		0.3	0.6
Purchase of own shares by EST		(0.1)	-
Dividends paid to company shareholders	7	(17.4)	(13.3)
Net cash used in financing activities		(37.5)	(9.5)
Net (decrease) / increase in cash and cash equivalents		(0.6)	1.6
Cash and cash equivalents at beginning of the year		2.2	0.9
Effect of exchange rate fluctuations on cash held		0.3	(0.3)
Cash and cash equivalents at end of the year	17	1.9	2.2

Cash and cash equivalents comprise:

Cash		11.0	11.5
Overdraft		(9.1)	(9.3)
Cash and cash equivalents at end of the year		1.9	2.2

NOTES TO THE PRELIMINARY ANNOUNCEMENT

 

1              BASIS OF PREPARATION

 

Basis of Preparation

Johnson Service Group PLC (the 'Company') and its subsidiaries (together 'the Group') provide textile rental and related services across the United Kingdom ('UK') and Republic of Ireland ('ROI').

The Company is incorporated and domiciled in the UK, its registered number is 523335 and the address of its registered office is Johnson House, Abbots Park, Monks Way, Preston Brook, Cheshire, WA7 3GH.  The Company is a public limited company and has its listing on the London Stock Exchange.

The financial information contained within this Preliminary Announcement has been prepared on a going concern basis and in accordance with UK-adopted international accounting standards, using accounting policies consistent with those set out in the 2024 Annual Report.

The financial information set out within this Preliminary Announcement does not constitute the Group's statutory accounts for the years ended 31 December 2025 or 31 December 2024 within the meaning of Section 434 of the Companies Act 2006 but is derived from those accounts.

Statutory accounts for 2024 have been delivered to the Registrar of Companies and those for 2025 will be delivered as soon as practicable, but not later than 30 April 2026.  The auditor has reported on those accounts; the reports were unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.

Going Concern

Background and Summary

After careful assessment, the Directors have adopted the going concern basis in preparing these financial statements.  The process and key judgments in coming to this conclusion are set out below.

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chief Executive's Operating Review.  The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Financial Review. 

Going Concern Assessment

Cash Flows, Covenants and Stress Testing

For the purposes of the going concern assessment, the Directors have prepared monthly cash flow projections for the period to 30 June 2027 (the assessment period).  The Directors consider this to be a reasonable period for the going concern assessment as it enables them to consider the potential impact of macroeconomic and geopolitical factors over an extended period.  The cash flow projections show that the Group has headroom against its committed facilities and can meet its financial covenant obligations.

The Group has also performed a reverse stress test against the base monthly cash flow projections referred to above in order to determine the performance level that would result in a reduction in headroom against its committed facilities to nil or a breach of its covenants.  Headroom on the Group's committed facilities would reduce to nil in the event that adjusted operating profit reduced to approximately 75% of 2025 levels.  The Directors do not consider this scenario to be plausible.

As a further stress test, the Group considered the impact of increasing interest rates.  The Directors do not consider the magnitude of the increase in interest rates that would be required in order for a covenant to be breached to be plausible.

The Group has also considered the impact of a more modest increase in interest rates alongside the reduction in adjusted operating profit to cause a breach in the interest cover covenant.  Again, the Directors do not consider such a scenario to be plausible.

Each of the stress tests assume no mitigating actions are taken.  Mitigating actions available to the Group, should they be required, include reductions in discretionary expenditure, particularly that of a capital nature, and ceasing dividend payments.

Liquidity

The Group has access to a committed Revolving Credit Facility of £135.0 million (the 'Facility') which matures in August 2027.  Whilst the existing facility provides sufficient liquidity for current commitments, we have commenced discussions with our existing lenders to refinance the facility, having regard to the future deployment of capital and our target leverage of 1.0 to 1.5 times, and to extend its tenure.

Going Concern Statement

After considering the monthly cash flow projections, the stress tests and the facilities available to the Group and Company, the Directors have a reasonable expectation that the Group and Company have adequate resources for their operational needs, will remain in compliance with the financial covenants set out in the bank facility agreement and will continue in operation for at least the period to 30 June 2027.  Accordingly, and having reassessed the principal risks and uncertainties, the Directors considered it appropriate to adopt the going concern basis in preparing the Group and Company financial statements. 

1              BASIS OF PREPARATION (continued)

Forward Looking Statements

Certain statements in these condensed consolidated financial statements constitute forward-looking statements.  Any statement in this document that is not a statement of historical fact including, without limitation, those regarding the Group's future expectations, operations, financial performance, financial condition and business is a forward-looking statement.  Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially.  These risks and uncertainties include, among other factors, changing economic, financial, business or other market conditions.  These and other factors could adversely affect the outcome and financial effects of the plans and events described in these condensed consolidated financial statements.  As a result, you are cautioned not to place reliance on such forward-looking statements.  Nothing in this document should be construed as a profit forecast.

Alternative Performance Measures (APMs)

Throughout this Preliminary Announcement, and consistent with prior years, we refer to a number of APMs.  APMs are used by the Group to provide further clarity and transparency of the Group's financial performance.  The APMs are used internally by management to monitor business performance, budgeting and forecasting and for determining Directors' remuneration and that of other management throughout the business.  The APMs, which are not recognised under UK-adopted international accounting standards, are:

·      'adjusted operating profit', which refers to operating profit before amortisation of intangible assets (excluding software amortisation) and exceptional items;

·      'adjusted profit before and after taxation', which refers to adjusted operating profit less total finance cost;

·      'adjusted EBITDA', which refers to adjusted operating profit plus the depreciation charge for property, plant and equipment, textile rental items and right of use assets, plus software amortisation;

·      'adjusted earnings per share' and 'adjusted diluted earnings per share', which refer to earnings per share calculated based on adjusted profit after taxation; and

·      'net debt excluding IFRS 16 lease liabilities'.

The Board considers that the above APMs, all of which exclude the effects of non-recurring items or non-operating events, provide useful information for stakeholders on the underlying trends and performance of the Group and facilitate meaningful year on year comparisons.

Limitations of APMs

The Board is cognisant that APMs do have limitations and should not be regarded as a complete picture of the Group's financial performance.  Limitations of APMs may include, inter alia:

·      similarly named measures may not be comparable across companies;

·      profit-related APMs may exclude significant, sometimes recurring, business transactions (e.g. restructuring charges and acquisition-related costs) that impact financial performance and cash flows; and

·      adjusted operating profit, adjusted profit before and after taxation, adjusted EBITDA, adjusted earnings per share and adjusted diluted earnings per share all exclude the amortisation of intangibles acquired in business combinations, but do not similarly exclude the related revenue and costs.

Reconciliation of APMs to Statutory Performance Measures

Reconciliations between the above APMs and statutory performance measures are reconciled within this Preliminary Announcement as follows:

·      Adjusted operating profit  - note 2

·      Adjusted profit before and after taxation - note 5

·      Adjusted EBITDA - note 5

·      Adjusted earnings per share and adjusted diluted earnings per share - note 8

·      Net debt excluding IFRS 16 lease liabilities - note 17

·     

2              SEGMENT ANALYSIS

Segment information is presented based on the Group's management and internal reporting structure as at 31 December 2025.

The chief operating decision-maker (CODM) has been identified as the Executive Directors.  The CODM reviews the Group's internal reporting in order to assess performance and allocate resources.  The CODM determines the operating segments based on those reports and on the internal reporting structure. 

For reporting purposes, the CODM considered the aggregation criteria set out within IFRS 8, 'Operating Segments', which allows for two or more operating segments to be combined as a single reporting segment if:

1)     aggregation provides financial statement users with information that allows them to evaluate the business and the environment in which it operates; and

2)     they have similar economic characteristics (for example, where similar long-term average gross margins would be expected) and are similar in each of the following respects:

§ the nature of the products and services;

§ the nature of the production processes;

§ the type or class of customer for their products and services;

§ the methods used to distribute their products or provide their services; and

§ the nature of the regulatory environment (i.e. banking, insurance or public utilities), if applicable.

The CODM deems it appropriate to present two reporting segments (in addition to 'Discontinued Operations' and 'All Other Segments'), being:

1)     Hotel, Restaurant and Catering ('HORECA'): comprising of our Johnsons Hotel Linen, Johnsons Hotel, Restaurant and Catering Linen, Johnsons Luxury Linen and Johnsons Ireland businesses each of which are a separate operating segment; and

2)     Workwear: comprising of our Johnsons Workwear business only.

The CODM's rationale for aggregating the Johnsons Hotel Linen, Johnsons Hotel, Restaurant and Catering Linen, Johnsons Luxury Linen and Johnsons Ireland operating segments into a single reporting segment is set out below:

·      the gross margins of each operating segment are within a similar range, with the long-term average margin expected to further align;

·      the nature of the customers, products and production processes of each operating segment are very similar;

·      the nature of the regulatory environment is the same due to the similar nature of products, processes and customers involved; and

·      distribution is via exactly the same method across each operating segment.

The CODM assesses the performance of the reporting segments based on a measure of operating profit, both including and excluding the effects of non-recurring items from the reporting segments, such as restructuring costs and impairments when the impairment is the result of an isolated, non-recurring or non-operating event.  Interest income and expenditure are not included in the result for each reporting segment that is reviewed by the CODM.  Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis, for example rental income received by Johnson Group Properties PLC (the property holding company of the Group) is credited back, where appropriate, to the paying company for the purpose of segmental reporting.  There have been no changes in measurement methods used compared to the prior year.

Other information provided to the CODM is measured in a manner consistent with that in the financial statements.  Segment assets exclude deferred income tax assets, post-employment benefits, derivative financial assets, current income tax assets and cash and cash equivalents, all of which are managed on a central basis.  Segment liabilities include lease liabilities but exclude current income tax liabilities, bank borrowings, derivative financial liabilities, post-employment benefits and deferred income tax liabilities, all of which are managed on a central basis.  These balances are part of the reconciliation to total assets and liabilities.

Exceptional items have been included within the appropriate reporting segment as shown on pages 24 to 25.

2          SEGMENT ANALYSIS (continued)

Year ended 31 December 2025		HORECA	Workwear	All Other Segments	Total
		£m	£m	£m	£m
Revenue
Rendering of services		389.5	141.9	-	531.4
Sale of goods		0.3	3.7	-	4.0
Total revenue		389.8	145.6	-	535.4
Cost of Sales		(227.9)	(87.9)	-	(315.8)
Distribution costs		(64.3)	(20.9)	-	(85.2)
Administrative costs		(37.8)	(15.8)	(8.3)	(61.9)
Operating profit / (loss) before amortisation of intangible assets (excluding software amortisation) and exceptional items		59.8	21.0	(8.3)	72.5
Amortisation of intangible assets (excluding software amortisation)		(7.7)	-	-	(7.7)
Exceptional items		(2.1)	(1.8)	(2.1)	(6.0)
Operating profit / (loss)		50.0	19.2	(10.4)	58.8
Total finance cost					(8.0)
Profit before taxation					50.8
Taxation charge					(13.8)
Profit for the year from continuing operations					37.0
Profit for the year from discontinued operations					0.1
Profit for the year attributable to equity holders					37.1

All of the above revenues are generated in the United Kingdom, with the exception of £37.5 million generated within the Republic of Ireland.

						HORECA	Workwear	All Other Segments	Total
						£m	£m	£m	£m
Balance sheet information
Segment assets						397.2	164.2	1.8	563.2
Unallocated assets:                 Post-employment benefits									4.9
Current income tax assets									0.4
Cash and cash equivalents									11.0
Total assets									579.5
Segment liabilities						(99.4)	(39.8)	(3.4)	(142.6)
Unallocated liabilities:          Bank borrowings									(123.4)
Derivative financial liabilities									(0.3)
Post-employment benefit obligations									(0.3)
Deferred income tax liabilities									(37.8)
Total liabilities									(304.4)
Other information
Non-current asset additions
- Property, plant and equipment						28.3	5.3	-	33.6
- Right of use assets (including reassessment / modification)						3.7	2.9	0.4	7.0
- Textile rental items						42.6	27.2	-	69.8
- Customer contracts						3.4	-	-	3.4
Depreciation and amortisation expense
- Property, plant and equipment						19.3	5.8	-	25.1
- Right of use assets						4.8	2.8	0.1	7.7
- Textile rental items						38.9	22.3	-	61.2
- Capitalised software						0.1	0.2	-	0.3
- Customer contracts						7.7	-	-	7.7

With the exception of non-current assets of £18.0 million which were located in the Republic of Ireland, all non-current assets of the Group reside in the Group's country of domicile, the United Kingdom.

2          SEGMENT ANALYSIS (continued)

Year ended 31 December 2024		HORECA	Workwear	All Other Segments	Total
		£m	£m	£m	£m
Revenue
Rendering of services		371.0	139.0	-	510.0
Sale of goods		0.2	3.2	-	3.4
Total revenue		371.2	142.2	-	513.4
Cost of Sales		(222.6)	(85.2)	-	(307.8)
Distribution costs		(61.5)	(20.2)	-	(81.7)
Administrative costs		(37.7)	(16.5)	(7.4)	(61.6)
Operating profit / (loss) before amortisation of intangible assets (excluding software amortisation) and exceptional items		49.4	20.3	(7.4)	62.3
Amortisation of intangible assets (excluding software amortisation)		(6.8)	(0.4)	-	(7.2)
Exceptional items		(0.4)	-	-	(0.4)
Operating profit / (loss)		42.2	19.9	(7.4)	54.7
Total finance cost					(7.5)
Profit before taxation					47.2
Taxation charge					(11.7)
Profit for the year from continuing operations					35.5
Profit for the year from discontinued operations					0.1
Profit for the year attributable to equity holders					35.6

All of the above revenues are generated in the United Kingdom, with the exception of £34.1 million generated within the Republic of Ireland.

						HORECA	Workwear	All Other Segments	Total
						£m	£m	£m	£m
Balance sheet information
Segment assets						390.7	154.4	1.9	547.0
Unallocated assets:                              Post-employment benefit assets									3.8
Cash and cash equivalents									11.5
Total assets									562.3
Segment liabilities						(102.2)	(39.2)	(3.7)	(145.1)
Unallocated liabilities:          Bank borrowings									(80.1)
Derivative financial liabilities									(0.3)
Post-employment benefit obligations									(0.3)
Current income tax liabilities									(0.7)
Deferred income tax liabilities									(28.9)
Total liabilities									(255.4)
Other information
Non-current asset additions
- Property, plant and equipment						37.9	10.1	-	48.0
- Right of use assets (including reassessment / modifications)						4.7	2.5	0.1	7.3
- Textile rental items						38.9	24.0	-	62.9
- Capitalised software						0.1	-	-	0.1
- Customer contracts						6.0	-	-	6.0
Depreciation and amortisation expense
- Property, plant and equipment						16.8	5.7	-	22.5
- Right of use assets						4.5	2.4	0.1	7.0
- Textile rental items						39.5	20.6	-	60.1
- Capitalised software						0.3	0.4	-	0.7
- Customer contracts						6.8	0.4	-	7.2

With the exception of non-current assets of £11.6 million which were located in the Republic of Ireland, all non-current assets of the Group reside in the Group's country of domicile, the United Kingdom.

3              EXCEPTIONAL ITEMS

	2025	2024
	£m	£m
Costs in relation to business acquisition activity	(0.5)	(1.4)
Reorganisation costs	(3.4)	-
Costs in relation to the Main Market listing	(1.7)	-
Insurance claims	(0.4)	-
Property related credits	-	1.0
Total exceptional items	(6.0)	(0.4)

Of the £6.0 million of exceptional items, £2.7 million would be included in cost of sales and £3.3 million would be included within administrative expenses.

Current year exceptional items

Costs in relation to business acquisition activity

The cost increases being experienced across UK businesses are encouraging some of our smaller, independent competitors to review their business strategy which, as a result, allowed us to add contracts with an annualised revenue of some £4.9 million to our HORECA division during the year.   Professional and transitional services fees of £0.3 million were incurred in relation to those contract acquisitions.  A further £0.2 million was incurred in respect of other business acquisition related activities.

Reorganisation costs

The project to relocate our Workwear operations from Lancaster to Manchester, and the subsequent closure of the Lancaster site, resulted in the recognition of £1.4 million of reorganisation costs during the year.  Reorganisation costs of £0.9 million were also incurred during the period in relation to the contract acquisitions mentioned above.  A further £1.1 million of reorganisation costs have also been incurred across the Group during the year.

Costs in relation to the Main Market listing

Costs of £1.7 million were incurred during the year in relation to the Company's ordinary shares being admitted to the Equity Shares (Commercial Companies) Category of the Official List of the Financial Conduct Authority and to trading on the Main Market of the London Stock Exchange, which occurred on 1 August 2025. 

Insurance claims

At the end of June 2025, our small industrial workwear processing unit in Bristol suffered a fire which rendered that part of the site inoperable.  To date, costs of £0.4 million have been recognised within exceptional items.  In accordance with UK-adopted international accounting standards, related insurance proceeds will be recognised when it is deemed virtually certain that they will be received.

Prior year exceptional items

Costs in relation to business acquisition activity

Professional fees of £0.4 million were incurred relating to the acquisition of Empire Linen Services Limited.    A further £1.0 million was incurred in respect of other business acquisition related activities.

Property related credits

Income of £0.6 million was recognised in respect of a non-returnable deposit received relating to the potential sale of a freehold site in Exeter, which was destroyed by fire in 2020.  In addition, a £0.4 million provision relating to the same site was released as it was no longer required.

4          FINANCE COST

		2025		2024
		£m		£m
Interest payable on bank loans and overdrafts			5.2	4.8
Amortisation of bank facility fees			0.4	0.4
Finance costs on lease liabilities relating to IFRS 16 (note 15)			2.6	2.3
Notional interest on post-employment benefits (note 16)			(0.2)	-
Total finance cost			8.0	7.5

5              ALTERNATIVE PERFORMANCE MEASURES (APMs)

            Throughout this Preliminary Announcement, we refer to a number of APMs.  A reconciliation of certain of the APMs, to the relevant statutory performance measure, is shown below.  Other reconciliations can be found in notes 2, 8 and 17.

Adjusted profit before and after taxation		2025			2024
		£m			£m
Profit before taxation		50.8			47.2
Amortisation of intangible assets (excluding software amortisation)		7.7			7.2
Exceptional items		6.0			0.4
Adjusted profit before taxation		64.5			54.8
Taxation thereon		(15.6)			(12.7)
Adjusted profit after taxation		48.9			42.1
Adjusted EBITDA			2025	2024
			£m	£m
Operating profit before amortisation of intangible assets (excluding software amortisation) and exceptional items			72.5	62.3
Software amortisation			0.3	0.7
Property, plant and equipment depreciation			25.1	22.5
Right of use asset depreciation			7.7	7.0
Textile rental items depreciation			61.2	60.1
Adjusted EBITDA			166.8	152.6

6           TAXATION

	2025	2024
	£m	£m
Current tax
UK corporation tax charge for the year	5.9	2.5
Adjustment in relation to previous years	(0.3)	(0.3)
Current tax charge for the year	5.6	2.2
Deferred tax
Origination and reversal of temporary differences	7.9	10.1
Adjustment in relation to previous years	0.3	(0.6)
Deferred tax charge for the year	8.2	9.5
Total charge for taxation included in the Consolidated Income Statement	13.8	11.7

The tax charge for the year is higher (2024: lower) than the effective rate of Corporation Tax in the UK of 25.0% (2024: 25.0%).  A reconciliation is provided below:

	2025	2024
	£m	£m
Profit before taxation	50.8	47.2
Profit before taxation multiplied by the effective rate of Corporation Tax in the UK	12.7	11.8
Factors affecting taxation charge for the year:
Non-taxable income	-	(0.3)
Tax effect of expenses not deductible for tax purposes	1.4	1.2
Difference in current and deferred taxation rates	-	0.1
Tax rate differential on non-UK profits	(0.3)	(0.2)
Adjustments in relation to previous years	-	(0.9)
Total charge for taxation included in the Consolidated Income Statement	13.8	11.7

6           TAXATION (continued)

Taxation in relation to the amortisation of intangible assets (excluding software amortisation) has decreased the charge for taxation on continuing operations by £0.9 million (2024: £1.1 million). Taxation in relation to exceptional items has decreased the charge for taxation on continuing operations by £0.9 million (2024: increase by £0.1 million).

Deferred income tax balances at the balance sheet date have been measured at a deferred income tax rate of 25.0% (2024: 25.0%).  Deferred tax balances in relation to balances held in the Republic of Ireland have been recognised at 12.5%, in line with the prevailing rate of tax in 2025 (2024: 12.5%).

During the year, a deferred taxation charge of £0.2 million (2024: £1.0 million) has been recognised in Other Comprehensive Income in relation to post-employment benefits.

7              DIVIDENDS

		2025	2024
Dividend per share
Final dividend		3.20p	2.70p
Interim dividend		1.60p	1.30p

		2025	2024
Shareholders' funds committed		£m	£m
Final dividend		12.1	11.1
Interim dividend		6.3	5.4

The Directors propose the payment of a final dividend in respect of the year ended 31 December 2025 of 3.2 pence per share.  Based upon the number of shares in issue as at the latest practicable date prior to the publication of this document, this is expected to utilise Shareholders' funds of £12.1 million and will be paid, subject to Shareholder approval, on 15 May 2026 to Shareholders on the register of members on 17 April 2026.  In accordance with IAS 10 there is no payable recognised at 31 December 2025 in respect of this proposed dividend. The trustee of the EST has waived the entitlement to receive dividends on the Ordinary shares held by the trust. 

8              EARNINGS PER SHARE

	2025	2024
	£m	£m
Profit for the financial year from continuing operations attributable to Shareholders	37.0	35.5
Amortisation of intangible assets from continuing operations (net of taxation)	6.8	6.1
Exceptional costs from continuing operations (net of taxation)	5.1	0.5
Adjusted profit from continuing operations attributable to Shareholders	48.9	42.1
Profit from discontinued operations attributable to Shareholders	0.1	0.1
Total adjusted profit from all operations attributable to Shareholders	49.0	42.2
	No. of shares	No. of shares
Weighted average number of Ordinary shares	401,128,215	414,500,856
Potentially dilutive Ordinary shares	1,747,031	3,656,131
Diluted number of Ordinary shares	402,875,246	418,156,987
Basic earnings per share
From continuing operations	9.3p	8.5p
From discontinuing operations	-	-
From total operations	9.3p	8.5p
Adjustments for amortisation of intangible assets (continuing)	1.7p	1.5p
Adjustment for exceptional items (continuing)	1.2p	0.2p
Adjusted basic earnings per share (continuing)	12.2p	10.2p
Adjusted basic earnings per share (discontinued)	-	-
Adjusted basic earnings per share from total operations	12.2p	10.2p
Diluted earnings per share
From continuing operations	9.2p	8.4p
From discontinuing operations	-	-
From total operations	9.2p	8.4p
Adjustments for amortisation of intangible assets (continuing)	1.7p	1.5p
Adjustment for exceptional items (continuing)	1.2p	0.2p
Adjusted diluted earnings per share (continuing)	12.1p	10.1p
Adjusted diluted earnings per share (discontinued)	-	-
Adjusted diluted earnings per share from total operations	12.1p	10.1p

Basic earnings per share is calculated using the weighted average number of Ordinary shares in issue during the year, excluding those held by the Employee Share Trust, based on the profit for the year attributable to Shareholders.  Adjusted earnings per share figures are given to exclude the effects of amortisation of intangible assets (excluding software amortisation) and exceptional items, all net of taxation, and are considered to show the underlying performance of the Group.

For diluted earnings per share, the weighted average number of Ordinary shares in issue is adjusted to assume conversion of all potentially dilutive Ordinary shares.  The Company has potentially dilutive Ordinary shares arising from share options granted to employees. Options are dilutive under the SAYE scheme, where the exercise price together with the future IFRS 2 charge of the option is less than the average market price of the Company's Ordinary shares during the year. Options under the LTIP schemes, as defined by IFRS 2, are contingently issuable shares and are therefore only included within the calculation of diluted EPS if the performance conditions, as set out in the Directors' Remuneration Report, are satisfied at the end of the reporting period, irrespective of whether this is the end of the vesting period or not.

Potentially dilutive Ordinary shares are dilutive at the point, from a continuing operations level, when their conversion to Ordinary shares would decrease earnings per share or increase loss per share.  Potentially dilutive Ordinary shares have been treated as dilutive in both years, as their inclusion in the diluted earnings per share calculation decreases the earnings per share from continuing operations. 

There were no events occurring after the balance sheet date and up until the date of this report that would have changed significantly the number of Ordinary shares or potentially dilutive Ordinary shares outstanding at the balance sheet date if those transactions had occurred before the end of the reporting period.

9              GOODWILL

		2025	2024
		£m	£m
Cost
Brought forward		155.0	145.8
Impact of foreign exchange translation		0.4	(0.3)
Business combinations		-	9.5
Carried forward		155.4	155.0
Accumulated impairment losses
Brought forward		1.4	1.4
Losses in the year		-	-
Carried forward		1.4	1.4
Carrying amount
Opening		153.6	144.4
Closing		154.0	153.6

During the prior year, the Group acquired 100% of the share capital of Empire Linen Services Limited ('Empire'). On acquisition, goodwill of £9.5 million was recognised.

In accordance with UK-adopted international accounting standards, goodwill is not amortised but is instead tested annually for impairment, or more frequently if there are indicators that an impairment has arisen, and carried at cost less accumulated impairment losses.  Having completed the 2025 review, no impairment has been recognised in relation to any of the Group's cash generating units.

10            INTANGIBLE ASSETS

  Capitalised software

	2025	2024
	£m	£m
Opening net book value	0.6	1.2
Additions	-	0.1
Amortisation	(0.3)	(0.7)
Closing net book value	0.3	0.6

Other intangible assets

	2025	2024
	£m	£m
Opening net book value	28.4	17.9
Additions	3.4	6.0
Foreign exchange differences	0.5	(0.5)
Business combinations	-	12.2
Amortisation	(7.7)	(7.2)
Closing net book value	24.6	28.4

Other intangible assets comprise of customer contracts and relationships and brands.  During the prior year, the Group recognised £12.2 million in relation to the acquisition of Empire. 

11            PROPERTY, PLANT AND EQUIPMENT

	2025  £m	2024  £m
Opening net book value	160.0	134.5
Additions	33.6	48.0
Foreign exchange differences	0.6	(0.5)
Business combinations	-	0.9
Transfers from right of use assets	-	0.1
Depreciation	(25.1)	(22.5)
Disposals	(0.2)	(0.3)
Transfers to assets classified as held for sale	-	(0.2)
Closing net book value	168.9	160.0

CAPITAL COMMITMENTS

Orders placed for future capital expenditure contracted but not provided for in the financial statements are shown below:

	2025	2024
	£m	£m
Property, plant and equipment	10.3	15.2

12            RIGHT OF USE ASSETS

	2025 £m	2024 £m
Opening net book value	43.0	40.0
Additions	6.2	1.6
Business combinations	-	2.8
Transfers to property, plant and equipment	-	(0.1)
Reassessment / modification of assets previously recognised	0.8	5.7
Depreciation	(7.7)	(7.0)
Closing net book value	42.3	43.0

The transfer of assets to property, plant and equipment represents the reclassification of the cost and associated depreciation of assets to property, plant and equipment where the lease was repaid in the year and the asset is now owned.

The reassessment / modification of assets relates to rental increases and extensions to lease terms that have been agreed during the year in relation to property and commercial vehicle leases that were in place at the start of the relevant year.

13            TEXTILE RENTAL ITEMS

	2025	2024
	£m	£m
Opening net book value	73.4	71.9
Additions	69.8	62.9
Foreign exchange differences	0.1	(0.1)
Business combinations	-	1.1
Depreciation	(61.2)	(60.1)
Special charges	(2.1)	(2.3)
Closing net book value	80.0	73.4

14            BORROWINGS

	2025						2024
	£m						£m
Current
Overdraft	9.1						9.3
Bank loans	(0.1)						(0.4)
	9.0						8.9
Non-current
Bank loans	114.4						71.2
	114.4						71.2
	123.4						80.1
The maturity of non-current bank loans is as follows:
- Between one and two years	114.4						-
- Between two and five years	-						71.3
- Unamortised issue costs of bank loans	-						(0.1)
	114.4						71.2
The currency of the outstanding bank loans is as follows:
- Sterling					83.0		44.0
- Euros					31.4		27.3
					114.4		71.3

At 31 December 2025, borrowings were secured and drawn down under a committed facility dated 8 August 2022. The facility comprises a £135.0 million revolving credit facility (including overdraft) which runs to August 2027.

Individual tranches are drawn down, in Sterling or Euros, for periods of up to six months and at SONIA or Euribor rates of interest respectively, prevailing at the time of drawdown, plus the credit adjustment spread and the applicable margin. Maturity of the bank loans is shown as non-current to reflect the term of the facility.  Although the tranches are drawn down for periods of up to six months, in reality the tranches are not repaid in full and therefore it would be misleading to present the bank loans as current.  The margin on the facility ranges between 1.45% and 2.45% and was 1.45% at 31 December 2025.  Margin is determined on the achievement of leverage ratios.

The secured bank loans are stated net of unamortised issue costs of £0.1 million (2024: £0.5 million) of which £0.1 million is included within current borrowings (2024: £0.4 million) and £nil is included within non-current borrowings (2024: £0.1 million). 

The Group has two net overdraft facilities, included as part of the overall £135.0 million borrowing facility, for £5.0 million and £3.0 million (2024: £5.0 million and £3.0 million) with two of its principal bankers.

15         LEASE LIABILITIES

	2025 £m	2024 £m
Opening liabilities	47.0	43.2
New leases recognised	6.1	1.6
Business combinations	-	2.8
Reassessment / modification of leases previously recognised	0.8	5.7
Lease payments	(9.7)	(8.6)
Finance costs	2.6	2.3
Closing liabilities	46.8	47.0

Of which are:
Current lease liabilities	7.4	6.2
Non-current lease liabilities	39.4	40.8
Closing liabilities	46.8	47.0

The reassessment / modification of leases relates to rental increases and extensions to lease terms that have been agreed during the year in relation to property and commercial vehicle leases that were in place at the start of the relevant year.

16            POST-EMPLOYMENT BENEFITS

The Group has applied the requirements of IAS 19, 'Employee Benefits' to its employee pension schemes and post-retirement healthcare benefits.

The Group operates a defined benefit pension scheme, the Johnson Group Defined Benefit Scheme ('JGDBS'). The JGDBS was closed to future accrual on 31 December 2014.  A full actuarial valuation of the JGDBS was carried out as at 30 September 2022 and has been updated to 31 December 2025 by an independent qualified actuary.  The updated actuarial valuation at 31 December 2025 showed that the scheme had a surplus of £4.9 million (2024: £3.8 million).  During the year, no employer or employee contributions were made (2024: £nil). 

The schedule of contributions put in place on 31 October 2023, which superseded all earlier versions, required no further deficit recovery payments. Accordingly, deficit recovery payments of £nil (2024: £nil) were made to the Scheme during the year. 

The gross post-employment benefits and associated deferred income tax liability thereon is shown below:

	2025 £m	2024 £m
Gross post-employment benefits	4.6	3.5
Deferred income tax liability thereon	(1.1)	(0.9)
Net asset	3.5	2.6

The reconciliation of the opening gross post-employment benefits to the closing gross post-employment benefits is shown below:

	2025 £m	2024  £m
Opening gross post-employment benefits	3.5	(0.3)
Notional interest	0.2	-
Remeasurement and experience gains	0.9	3.8
Closing gross post-employment benefits	4.6	3.5

Which are disclosed within:
Non-current assets	4.9	3.8
Non-current liabilities	(0.3)	(0.3)
	4.6	3.5

17            ANALYSIS OF NET DEBT

Net debt is calculated as total borrowings net of unamortised bank facility fees, less cash and cash equivalents.  Non-cash changes represent the effects of the recognition and subsequent amortisation of fees relating to the bank facility, changing maturity profiles, debt acquired as part of an acquisition and the recognition of lease liabilities entered into during the year.

				At 31 December 2024	Cash Flow	Non-cash Changes	Foreign Exchange Adjustments	At 31 December 2025
				£m	£m	£m	£m	£m
Debt due within one year				0.4	-	(0.3)	-	0.1
Debt due after more than one year				(71.2)	(41.5)	(0.1)	(1.6)	(114.4)
Lease liabilities (See note 15)				(47.0)	7.1	(6.9)	-	(46.8)
Total debt and lease financing				(117.8)	(34.4)	(7.3)	(1.6)	(161.1)
Cash and cash equivalents				2.2	(0.6)	-	0.3	1.9
Net debt				(115.6)	(35.0)	(7.3)	(1.3)	(159.2)

				At 31 December 2023	Cash Flow	Non-cash Changes	Foreign Exchange Adjustments	At 31 December 2024
				£m	£m	£m	£m	£m
Debt due within one year				0.4	0.3	(0.3)	-	0.4
Debt due after more than one year				(63.0)	(9.5)	(0.1)	1.4	(71.2)
Lease liabilities (See note 15)				(43.2)	6.3	(10.1)	-	(47.0)
Total debt and lease financing				(105.8)	(2.9)	(10.5)	1.4	(117.8)
Cash and cash equivalents				0.9	1.6	-	(0.3)	2.2
Net debt				(104.9)	(1.3)	(10.5)	1.1	(115.6)

17         ANALYSIS OF NET DEBT (continued)

The cash and cash equivalents figures are comprised of the following balance sheet amounts:

	2025	2024
	£m	£m
Cash (Current assets)	11.0	11.5
Overdraft (Borrowings, Current liabilities)	(9.1)	(9.3)
	1.9	2.2

Lease liabilities are comprised of the following balance sheet amounts:

	2025	2024
	£m	£m
Amounts due within one year (Lease liabilities, Current liabilities)	(7.4)	(6.2)
Amounts due after more than one year (Lease liabilities, Non-current liabilities)	(39.4)	(40.8)
	(46.8)	(47.0)

18         RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

	2025	2024
	£m	£m
(Decrease) / increase in cash in the year	(0.6)	1.6
Increase in debt and lease financing	(34.4)	(2.9)
Change in net debt resulting from cash flows	(35.0)	(1.3)
Debt acquired through business acquisitions	-	(2.8)
Lease liabilities recognised during the period	(6.9)	(7.3)
Non-cash movement in unamortised bank facility fees	(0.4)	(0.4)
Foreign exchange adjustments	(1.3)	1.1
Movement in net debt	(43.6)	(10.7)
Opening net debt	(115.6)	(104.9)
Closing net debt	(159.2)	(115.6)

19         SHARE CAPITAL

				2025		2024
Issued and Fully Paid			Shares	£m	Shares	£m
Ordinary shares of 10p each:
-  At start of year			414,954,767	41.5	414,415,123	41.4
-  New shares issued			1,636,260	0.1	539,644	0.1
-  Share buybacks			(38,293,361)	(3.8)	-	-
At end of year			378,297,666	37.8	414,954,767	41.5

In respect of the two share buyback programmes which were running during the prior year, 38,293,361 Ordinary shares with a total nominal value of £3,829,336 were bought back by the Company, and subsequently cancelled, for a total consideration, including transaction costs, of £54.7 million, which represented an average price of 142.0p per share.  The total shares repurchased across the two share buyback programmes to 31 December 2025 represented 9.2% of the Company's issued share capital outstanding immediately prior to the commencement of the share buyback programmes. There were no share buyback programmes running during the prior year. 

Payments in respect of the above transactions were (debited) / credited as follows:

				2025	2024
				£m	£m
Share capital				(3.7)	0.1
Capital redemption reserve				3.8	-
Retained earnings				(54.7)	-
				(54.6)	0.1

20            BUSINESS COMBINATIONS

There were no business combinations during the year.

In the prior year, the Group acquired 100% of the share capital of Empire Linen Services Limited ('Empire').  Full details are provided in the 2024 Annual Report and Accounts. There have been no subsequent adjustments made to the fair values for any of the prior year acquisitions.

Cash flows from business combinations

The cash flows in relation to business combinations are summarised below:

						2025	2024
						£m	£m
Net consideration payable						-	(21.2)
Deferred consideration						(0.2)	0.2
Cash acquired						-	1.4
Net cash used in investing activities						(0.2)	(19.6)

            21            CONTINGENT LIABILITIES

The Group operates from a number of sites across the UK and the Republic of Ireland.  Some of the sites have operated as laundry sites for many years and historic environmental liabilities may exist.  Such liabilities are not expected to give rise to any significant loss.

The Group has granted its Bankers and Trustee of the Pension Scheme (the 'Trustee') security over the assets of the Group.  The priority of security is as follows:

§ first ranking security for up to £28.0 million to the Trustee ranking pari passu with up to £155.0 million of bank liabilities; and

§ second ranking security for the balance of any remaining liabilities to the Trustee ranking pari passu with any remaining bank liabilities.

During the period of ownership of the Facilities Management division the Company had given guarantees over the performance of contracts entered into by the division.  As part of the disposal of the division the purchaser agreed to pursue the release or transfer of obligations under the Parent Company guarantees and this remains in process.  The Sale and Purchase Agreement contains an indemnity from the purchaser to cover any loss in the event a claim is made prior to release.  In the period until release the purchaser is to make a payment to the Company of £0.2 million per annum, reduced pro rata as guarantees are released.  Such contingent liabilities are not expected to give rise to any significant loss.

22            EVENTS AFTER THE REPORTING PERIOD

There were no events occurring after the balance sheet date which should be disclosed in accordance with IAS 10, 'Events after the reporting period'.

23            PRINCIPAL RISKS AND UNCERTAINTIES

Our Approach to Risk Management

The Board has overall accountability for ensuring that risk is effectively managed across the Group and, on behalf of the Board, the Audit Committee coordinates and reviews the effectiveness of the Group's risk management process.  Risks are reviewed by all of our businesses on an ongoing basis and are measured against a defined set of likelihood and impact criteria.  This is captured in consistent reporting formats enabling the Audit Committee to review and consolidate risk information and summarise the principal risks and uncertainties facing the Group.  Wherever possible, action is taken to mitigate, to an acceptable level, the potential impact of identified principal risks and uncertainties.

The Board formally reviews the most significant risks facing the Group twice a year, or more frequently should new matters arise.  Throughout 2025, the overall risk environment remained largely unchanged from that reported within the Group's 2024 Annual Report.

Risk Appetite

The Board interprets appetite for risk as the level of risk that the Group is willing to take in order to meet its strategic goals.  The Board communicates its approach to, and appetite for, risk to the business through the strategy planning process and the internal risk governance and control frameworks.  In determining its risk appetite, the Board recognises that a prudent and robust approach to risk assessment and mitigation must be carefully balanced with a degree of flexibility so that the entrepreneurial spirit which has greatly contributed to the success of the Group is not inhibited.  Both the Board and the Audit Committee remain satisfied that the Group's internal risk control framework continues to provide the necessary element of flexibility without compromising the integrity of risk management and internal control systems.

Emerging Risks

The Board has established processes for identifying emerging risks and horizon scanning for risks that may arise over the medium to long term.  Emerging and potential changes to the Group's risk profile are identified through the Group's risk governance frameworks and processes, and through direct feedback from management, including changing operating conditions, market and consumer trends.

23            PRINCIPAL RISKS AND UNCERTAINTIES (continued)

Principal Risks and Uncertainties

The principal risks and uncertainties affecting the Group are summarised below:

§ Economic and Political Conditions § Cost Inflation § Failure of Strategy § Recruitment, Retention and Motivation of Employees § Loss of a Processing Facility § Competition and Disruption

§ Information Technology Failures and Cyber Security § Pandemic or Other National Crisis § Health & Safety § Compliance and Fraud § Customer Sales and Retention § Climate Change and Energy Costs

Full details of the above risks, together with details on how the Board takes action to mitigate each risk, will be provided in our 2025 Annual Report.  These risks and uncertainties do not comprise all of the risks that the Group may face and are not necessarily listed in any order of priority.  Additional risks and uncertainties not presently known to the Board, or deemed to be less material, may also have an adverse effect on the Group.

In accordance with the provisions of the UK Corporate Governance Code, the Board has taken into consideration the principal risks and uncertainties in the context of determining whether to adopt the going concern basis of preparation and when assessing the future prospects of the Group.

24            STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

The Directors are responsible for preparing the Strategic Report, Directors' Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year.  Under that law the Directors have to prepare the Group financial statements in accordance with UK-adopted international accounting standards and have elected to prepare the Parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) including FRS 101 'Reduced Disclosure Framework'.  Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Parent Company and of the profit or loss of the Group for that period.

In preparing the financial statements, the Directors are required to:

§  select suitable accounting policies and then apply them consistently;

§  make judgments and accounting estimates that are reasonable and prudent;

§  for the Group financial statements state whether applicable UK-adopted international accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

§  for the Parent Company financial statements state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and the Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Parent Company and enable them to ensure that the financial statements and Director's remuneration report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Parent Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors are responsible for preparing the Annual Report in accordance with applicable law and regulations. Having taken advice from the Audit Committee, the Directors consider that the Annual Report and the financial statements, taken as a whole, provides the information necessary to assess the Group and the Parent Company's performance, business model and strategy and is fair, balanced and understandable.

To the best of our knowledge:

§  the Group financial statements, prepared in accordance with UK-adopted international accounting standards, and the Parent Company financial statements, prepared in accordance with UK accounting standards give a true and fair view of the assets, liabilities, financial position and profit or loss of the Parent Company and the undertakings included in the consolidation, taken as a whole; and

§  the Strategic Report and Directors' Report include a fair review of the development and performance of the business and the position of the Parent Company and the undertakings included in the consolidation, taken as a whole, together with a description of the principal risks and uncertainties that they face.

The Directors confirm that:

§  so far as each Director is aware, there is no relevant audit information of which the Group and the Parent Company's auditor is unaware; and

§  the Directors have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Group and the Parent Company's auditor is aware of that information.

25            PRELIMINARY ANNOUNCEMENT

A copy of this Preliminary Announcement is available on request to all Shareholders by post from the Company Secretary, Johnson Service Group PLC, Johnson House, Abbots Park, Monks Way, Preston Brook, Cheshire, WA7 3GH.  The announcement can also be accessed at www.jsg.com.

The 2025 Annual Report will be made available on the Group's website (www.jsg.com) on or before 23 March 2026.

26            APPROVAL

The Preliminary Announcement was approved by the Board of Directors on 2 March 2026.

 

END