JSG Johnson Service Group Plc

3 September 2024

AIM:  JSG

Johnson Service Group PLC

('JSG' or 'the Group')

Interim Results for the Six Months ended 30 June 2024

"Continuing strong organic growth and £20.6m acquisition of Empire Linen Services Limited.

Confidence for the full year and for longer-term growth."

FINANCIAL HIGHLIGHTS

-    Bank Facility of £120.0 million extended to August 2027.

-    Strong balance sheet and cash generation; capital available for further organic and inorganic investment.

OPERATIONAL HIGHLIGHTS

-    Organic revenue up 5.7% compared to H1 2023.

-    Increasing new sales activity and strengthening pipeline in both HORECA and Workwear.

-    Energy costs reducing as a % of revenue; costs largely fixed for remainder of 2024.

-    Margin improvement on track for target of 14% in 2026.

-    New Crawley site expected to commence processing in Q4 2024.

-    Enfield depot in operation to improve access to hotel customers in London and the South East.

-    £20.6 million acquisition of Empire Linen Services Limited ('Empire') on 2 September 2024 expands our service offering to luxury hotels in London and the South East.

-    Full year outturn, before the benefit from Empire, expected to be in line with current market expectations. 

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 earnings per share calculated based upon adjusted profit after taxation.

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

"The Group is reporting a strong financial and operational performance for the period, having delivered a significant uplift in year-on-year profitability.  This result is testament to the resilience of our business model, the strength of our relationships with our customers and suppliers and the hard work of our employees.

We remain focused on organic growth initiatives, optimising operational efficiencies through a combination of targeted capital investment and continuous improvement of our working practices whilst also continuing to expand our geographical coverage through the successful execution of earnings enhancing acquisitions, as demonstrated by the acquisition of Empire, announced today, which represents a further step in our strategy to expand the range and scale of services we offer.

Whilst continuing to closely manage variable costs, our team has ensured that customer retention has remained strong.  We have had some significant independent and group sales wins during the second quarter of 2024 which will positively impact the remainder of the year and into 2025.

We expect to exit 2024 with strong progression towards previous levels of adjusted operating margin and adjusted operating profit for the year, before the benefit from Empire, in line with current market expectations."

SELL-SIDE ANALYSTS' MEETING

A presentation for sell-side analysts will be held today at 09:30, details of which will be distributed by Camarco.  A copy of the presentation and recording of the meeting will be available on the Group's website (www.jsg.com) following the meeting.

ENQUIRIES

Financial And Operational 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 ongoing 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 EPS 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 18.

PERFORMANCE

Organic revenue growth was 5.7% compared to the first half of 2023.  Within Hotel, Restaurant and Catering ('HORECA'), and despite the unseasonably poor weather in the second quarter, volumes have continued to increase, largely reflecting additional rooms being serviced, and are now following more predictable patterns which allows for improving operational efficiencies.  Workwear remained stable during the first half of the year, trading in line with our expectations, and, encouragingly, some positive momentum on sales to both new and existing customers has started to materialise.

Cost pressures remain, particularly in relation to energy and, to a lesser extent, labour.  Energy continued to be a significantly higher cost than has been experienced historically although we have proactively fixed prices for the coming months to obtain and manage some degree of certainty over cost of supply.

Adjusted operating profit margin increased by 150 basis points to 10.3% (June 2023: 8.8%), reflecting a 90 basis points reduction in energy costs to 9.4% of revenue (June 2023: 10.3%) and a 40 basis points reduction in labour costs to 44.7% of revenue (June 2023: 45.1%).   As we continue to improve the recovery of these costs, through increasing volumes, efficiencies and price increases, the Board remains of the opinion that the overall Group adjusted operating margin will reach at least 14.0% by 2026.

The additional costs incurred in respect of Crawley amounted to some £1.0 million in the first half and are expected to be some £3.5 million for the full year.

Overall, we are encouraged with the Group's performance as we plan to further expand capacity in each of our businesses.

ACQUISITION OF EMPIRE

On 2 September 2024, we acquired the entire issued share capital of Empire Linen Services Limited ('Empire') for a consideration of £20.6 million on a debt free, cash free basis and subject to normalised working capital.  Empire provides linen services to luxury hotels in London and the South East.  Revenue and profit before tax for the year ended 30 June 2023, as shown in the unaudited statutory accounts, were £10.9 million and £0.9 million, respectively.  The revenue and profit before tax as shown in the management accounts for the year ended 30 June 2024 were £13.9 million and £2.8 million, respectively.  The business employs some 170 employees and operates from a 26,000 square foot leasehold site in Tottenham.

The transaction is expected to be immediately earnings enhancing and, in addition to collaboratively sharing best practice across the enlarged Group, will complement, and allow us to implement operational synergies with, the Regency business acquired in 2023.

FINANCIAL REVIEW

Financial Results

Revenue in the period increased by 13.5% to £244.1 million (June 2023: £215.0 million).  Adjusted EBITDA was £69.2 million (June 2023: £57.7 million) giving an improved margin of 28.3% (June 2023: 26.8%).  Adjusted operating profit increased by 32.6% to £25.2 million (June 2023: £19.0 million).

Total finance costs were £3.7 million (June 2023: £2.6 million) reflecting higher interest rates and borrowing over the period.

Adjusted profit before taxation increased by 31.1% to £21.5 million (June 2023: £16.4 million).  Statutory profit before taxation, after amortisation of intangible assets (excluding software amortisation) of £2.8 million (June 2023: £2.6 million) and, in 2023, an exceptional charge of £0.3 million, was £18.7 million (June 2023: £13.5 million).

The tax rate on the adjusted profit before taxation, excluding exceptional items, amortisation of intangible assets (excluding software amortisation) was 24.7% (June 2023: 25.1%).  The rate is below the headline UK corporation tax rate for the full year of 25%, due to the effect of expenses not deductible for taxation and short-term timing differences combined with the impact of the lower rate of 12.5% applied to profits generated in the Republic of Ireland ('ROI').

Adjusted diluted earnings per share was 3.9 pence (June 2023: 2.9 pence).

Dividend Reflecting Confidence in the Future

An interim dividend of 1.3 pence per share (June 2023: 0.9 pence per share) will be paid on 1 November 2024 to those Shareholders on the register of members on 4 October 2024.  The ex-dividend date is 3 October 2024.  The increased dividend is in line with our progressive dividend policy to reduce dividend cover from our historical level of cover of 3 times in 2022 to 2.5 times in financial year 2024.

Cash Flow and Net Debt

Free cash flow (calculated as net cash generated from operating activities, less net spend on textile rental items, less the capital element of leases) in the first half of the year was £24.5 million compared to £17.6 million in the first half of 2023.  This improvement is largely reflective of the continuing improvement in trading performance.

Total net debt (excluding IFRS 16 liabilities) at 30 June 2024 was £74.1 million (December 2023: £61.7 million).  The increase is largely attributed to significant capital investment in the business.  After including the impact of IFRS 16, net debt at June 2024 was £117.7 million (December 2023: £104.9 million).

Bank Facility

In May 2024, the Group extended the tenure of its existing £120.0 million revolving credit facility by 12 months such that it now expires in August 2027. 

In addition to the above, the terms of the facility provide for an option to increase the facility by up to a further £15.0 million, subject to bank consent.

The current margin on the facility is 1.45% over SONIA or the relevant EURIBOR rate, as applicable.  Covenants remain unchanged and comprise a leverage covenant (total debt to EBITDA) of less than three times and interest cover of not less than four times.  At 30 June 2024, the leverage ratio was 0.8 times.  On a pro-forma basis, to include the approximate impact of Empire had it been acquired on that date, the leverage ratio would have been 0.9 times.

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 benefit obligations for the same 12-month period, increased to 14.8% (June 2023: 13.5%; December 2023: 13.9%).

Capital Structure

Our Capital Allocation policy remains unchanged.  The Group's objective is to employ a disciplined approach to investment, returns and capital efficiency to deliver sustainable compounding growth whilst also maintaining a strong balance sheet.  We continue to see exciting opportunities to deploy capital organically and have a strong M&A pipeline.  In the period since September 2022, we have completed share buyback programmes returning £35.5 million to Shareholders, invested in the opening of a new site in Crawley and undertaken significant capital investment in many of our other sites.  The acquisition of Regency in February 2023, Celtic Linen in August 2023 and now Empire in September 2024 has further utilised over £53.0 million of available capital.  Even after taking into consideration these investments and the payment of dividends, the Group will have significant headroom under its committed facilities and target leverage of 1-1.5 times by the end of 2024 to continue to pursue investment opportunities, both organic and inorganic, as they arise.

Defined Benefit Pension Scheme ('the Scheme')

The recorded net surplus after tax for the Scheme, calculated in accordance with IAS 19, was £2.6 million at June 2024, compared to £nil at December 2023.  The improvement in the position is due, in part, to a higher discount rate assumed on liabilities offset, to a lesser extent, by higher assumed inflation.  The Scheme continues to have a significant portion of assets invested so as to hedge against movements in liabilities, thereby reducing overall volatility.

The triennial valuation of the Scheme, as at 30 September 2022, showed a small surplus on the Technical Provisions basis.  We have agreed with the Trustee to cease deficit contributions to the Scheme at least until the results of the next triennial valuation, as we work towards a buy out of the Scheme in the medium term.

OPERATIONAL REVIEW

Our Businesses

The Group provides textile rental and related services to the Hotel, Restaurant and Catering ('HORECA') and Workwear sectors throughout the UK and Republic of Ireland.

Within our 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 'Regency' and, following its acquisition on 2 September 2024, 'Empire' provide bespoke linen to four- and five-star luxury hotels.  Also, within HORECA, 'Celtic Linen' in the Republic of Ireland and 'Johnsons Belfast' in Northern Ireland serve 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 corporates across all industry sectors.

Energy

Energy costs (comprising gas, electricity and diesel) have been less volatile over the period and, although energy unit prices have gradually fallen, still remain at higher levels than historically.  Costs for the first half of 2024 represented 9.4% of revenue and, encouragingly, were lower than the equivalent period in 2023 but remain higher than in 2019 (June 2023: 10.3%; June 2019: 6.5%).  We anticipate a further reduction in this percentage in the second half such that the full year cost will be approximately 9.0% of revenue.

Our policy in the UK has always been to fix gas and electricity 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 currently have, on average, some 90% of our anticipated electricity usage and some 87% of our anticipated gas usage fixed for the remainder of 2024.  Looking ahead, approximately 62% of our anticipated electricity requirement is fixed for 2025 with around 30% for 2026.  Similarly, we have fixed pricing in place for some 61% of our anticipated gas requirement in 2025 and some 25% for 2026.  We will continue to follow our current policy as we go forward.

Whilst ongoing geopolitical events have resulted in current forward market rates being adverse to those set out in our AGM Statement, released on 1 May 2024, the weighted average price of our current fixed arrangements when combined with the current forward market rates for the remaining proportion of our anticipated energy usage remain broadly in line with those previously disclosed.

Labour

In the six months to 30 June 2024, labour as a percentage of revenue reduced to 44.7%, compared to 45.1% in the six months to 30 June 2023, although this was still higher than the 43.2% in the six months to 30 June 2019.  Notwithstanding the increase in the National Living Wage in January 2024 in ROI and in April 2024 in the UK, we are confident that labour, as a percentage of revenue, will remain stable for 2024.

HORECA Division

Total revenue for the HORECA division increased significantly to £172.9 million from £143.9 million in 2023.   Despite the unseasonably poor weather in the second quarter, organic growth was 8.5% reflecting both improved price per piece and increasing volume.  Adjusted EBITDA was £48.1 million (June 2023: £36.3 million) giving an improved margin of 27.8% (June 2023: 25.2%).  Adjusted operating profit was £18.4 million (June 2023: £10.9 million).

The Hotel, Restaurant and Catering Linen business has continued to invest to become more sustainable, improve processes and quality, and to continue a refurbishment programme in some of our employee welfare spaces to improve the employee experience at work.

A new continuous batch washer and driers in our Southall operation have resulted in increased productivity, and replacement ironers in Glasgow and Grantham are being installed to further enhance the capacity and efficiency of operations in those locations.

Our water recycling systems in Hayle and Shaftesbury continue to deliver reductions in water consumption and effluent production, with reduced net energy usage through heat recovery processes.

Our new location in Crawley, which is due to begin processing in the final quarter of 2024, will be one of the most sustainable and energy efficient laundries of scale in the UK and will allow for accelerated growth.  We have undertaken an initial marketing campaign which has shown encouraging results in terms of new sales, with further campaigns planned.

Volumes in a number of holiday destinations, particularly in the South West, were slightly lower than expected in the first half but have seen some seasonal improvement during July and August.  Our sales pipeline remains strong and we have had some significant independent and group sales wins during the second quarter of 2024 which will positively impact the remainder of the year and into 2025.

All of our sites will benefit from us agreeing to transfer and perform contracts previously operated by a chefs' wear provider with effect from 1 July 2024, adding annual revenue of some £4.5 million to the business.

Regency continues to make good ground in new business wins, having secured some 200 new rooms in the first half, including securing some key 5-star clients, both in areas they already serve as well as bringing the Regency brand into new geographical regions.  We have introduced five upgraded, newly liveried, commercial vehicles into the fleet to further promote the brand.  The £1.4 million capital investment into Regency's site has been completed to budget and the associated efficiency gains and increased capacity provides an exciting growth opportunity.

Trading performance and volumes within Hotel Linen for the first six months of 2024 were in line with our expectations.  May volumes were particularly strong, partly due to the bank holidays, with the last week resulting in the highest volume ever delivered by our business.

Our service is reliable and professional with deliveries on time and in full, with good quality linen provided to all customers.  Our customer service teams continue to make regular contact with customers via proactive telephone calls and pre-arranged visits, collating customer feedback via integrated systems.  Our consistent service delivery and partnership approach are key strengths of our offering and contribute to us achieving successful business retention, organic growth and new business wins.

A significant number of capital investment programmes were undertaken during the first quarter to prepare for the year ahead.  Major works included £3.5 million at our Bourne site to create additional capacity, new hoists, sorting conveyors and bulk detergent tanks installed in Cardiff and various works undertaken in Edinburgh to improve our wash systems.  In addition, investments in various new standalone washing machines, dryers and other machinery to improve our carbon footprint are underway, as is the ongoing improvement of employee welfare facilities across the estate.

Chester and Reading successfully trialled a 'driving behaviour monitoring system' with encouraging results which will be rolled out across the business during the remainder of 2024.  New vehicles, all fitted with camera systems including in cab monitoring, achieved target delivery dates and four new double deck units have joined the fleet to support the successful opening of our new depot in Enfield.

Employee retention and stability within our workforce are much improved, with competency-based pay being well received, initially in production and service and now throughout our engineering departments.  Employee engagement initiatives are a regular part of our business operations reflecting our appreciation for their hard work and support.  Investment in training continues across all disciplines within our business and will be complemented by the installation of a new learning and development software platform enabling personnel to monitor their progress, receive reminders for training and assess further development opportunities.

Support from all departments contributes to the continued success of our business.  Various projects to continue delivering innovation, both to our Hotel Linen operations and service delivery, are planned to underpin our objectives of being easy to do business with and the linen services provider of choice.

Trading in Ireland for the first half of the year has been in line with our expectations.  The new business from hotel customers installed in Q4 2023 and the addition of 696 rooms in 2024 has more than offset the impact of recent bad weather on hotel bookings.  Healthcare volumes remain stable, with a strong focus on consistent supply and accommodating the changing patterns of day procedures.

Customer retention remains strong and although the market is extremely competitive, our focus is on continued customer service and attention to detail.

Capital investment in the first half of the year has been in washing capacity, particularly with the installation of four new washer extractors, as table linen demand increases and we focus on a tailored service to our five-star customers.  Our Belfast site has seen the delivery of four new vehicles, updating our fleet and allowing further development.  We have also installed a new ironer in Belfast, focusing on the quality and processing efficiency of our duvet covers.

Our integration of the three sites in Belfast, Naas and Wexford is ongoing.  We are currently reviewing all associated systems to establish consistency and implement benchmarking, sharing best practice ideas with the rest of the Group.

Workwear Division

Revenue for the Workwear division was £71.2 million (June 2023: £71.1 million).  Adjusted EBITDA was £24.5 million (June 2023: £24.4 million) giving a margin of 34.4% (June 2023: 34.3%).  Adjusted operating profit was £10.2 million (June 2023: £11.1 million), the year-on-year reduction largely reflective of some £1.0 million of additional rental stock depreciation incurred in respect of new customer installations and existing customer renewals.

Our strategic shift in the call centre, focusing on targeted outbound calls, has significantly improved our conversion ratio.  This enhancement has increased the efficiency of our sales teams, keeping the sales pipeline robust and ensuring high activity across all industry sectors.  The marketing and sales team continue to focus on the new-to-rental market ensuring a steady flow of new customers experiencing our services.  New-to-rental customers represented 25% of our total new sales sold in the period.  The development of our new website, which is due to be launched in the second half of the year, is on track and will further enhance the introduction of our services to new-to-rental customers.

Our continuing commitment to enhancing customer service is evident in the latest customer survey result of 86.2%, up from 82.9% achieved in early 2023.  This positive shift can be attributed to the dedicated effort by our service teams in addition to investment in customer service training programs.  Customer retention for the 12 months to June 2024 was 92.4% and is trending positively for the full year, testament to our local and national service teams who continue to build strong relationships with our customers.  In conjunction with our survey partners, a new web portal for our management and service teams has been developed.  The portal, which went live in June, allows us to react quickly and positively with customers.

A significant £4.0 million capital investment project has started in our Manchester site.  The new system is expected to be fully operational later this month and will fully automate the production process, adding an extra 40% of capacity to the site.  New washer extractors and folders have been installed in several sites across the country, notably in Letchworth, providing an additional 10% capacity in the South East to support future growth.

Working in collaboration with our suppliers, several initiatives have been implemented to improve our wash processes, reducing the use of energy, water, and detergents.  Additionally, we are committed to enhancing energy efficiency by installing upgraded burners and optimising power correction factor units, which improve the effective use of both gas and electricity.  This commitment not only reduces energy waste but also contributes to a more sustainable future by minimising our carbon footprint.

Our ongoing fleet replacement programme will see almost 40 commercial vehicles replaced this year, maintaining service reliability to our customers whilst at the same time reducing carbon emissions.  As part of this programme, we have introduced our first small electric vehicle into our commercial fleet, specifically for customer installations and small deliveries.  A second electric vehicle will soon follow.

EMPLOYEES

Our employees are key to the continuing success of our business.  The Board would like to thank them for their support, hard work and significant contribution to the progress of the business over the last six months.  The teamwork, dedication and determination demonstrated in order to deliver a professional and on time service to our customers is a credit to each and every one of them.  The Board also welcomes the employees of Empire into the Johnsons family.

Employee engagement and training are a key focus in the development of our team and in further improving service levels.  The focus on training and development has allowed a number of our employees to progress to more senior roles within the business.

CHANGE OF REMUNERATION COMMITTEE CHAIR

As separately announced today, the Board has resolved to appoint Kirsty Homer as Chair of the Remuneration Committee and designated Non-Executive Director for Workforce Engagement in succession to Nick Gregg, with effect from 1 November 2024.  Nick will remain in his role as an independent Non-Executive Director until 31 December 2024 whereupon he will retire from the Board, having served nine years as an independent Non-Executive Director.

SUSTAINABILITY

We are committed to developing our responsible business agenda and continue to make excellent progress with embedding our sustainability programme across the Group and establishing the standards to which others aspire.

Key highlights of the programme so far this year include:

§ We have recently published our third Sustainability Report, which can be found on our website at www.jsg.com.

§ We have further developed our non-financial data capture, recording and reporting processes, implemented a new internal assurance process and are finalising plans to obtain third-party limited assurance from an independent auditor over certain of our non-financial data.

§ Enhanced employee engagement activity remains ongoing, supporting our communities through our "Local Communities Initiative" and an employee volunteering programme in partnership with Neighbourly, which we are renewing for a second year, Group wide.

§ In alignment with our approach towards a circular economy, we have successfully transitioned to a single waste management provider for the majority of our UK operations.  Within Workwear, we have also fully transitioned to a single provider for end-of-life textile management whilst within HORECA we are exploring new technologies and partnerships to help develop innovative solutions for textile recycling.

§ Our Workwear division has successfully sourced and trialled a washable and reusable bag that meets our standards for durability and functionality which, from June 2024, is being rolled out to eliminate single use plastic bags for our industrial use garments.

§ We continue to increase the percentage of sustainable content in our product offerings by working with suppliers on recycled materials and biopolymers.  We are currently developing a Sustainable Content roadmap to outline how we intend to achieve this goal.

§ We have seen improvements in our external Sustainability ratings, including our submission to CDP Climate Change, where we achieved a "B-" rating.  In Water Security, we maintained a "C" rating.  Our Sustainalytics ESG Risk rating is "Low," and we received a score of 16.7, representing significant improvement.

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.  As previously stated, a 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.  Furthermore, the Board currently anticipates that a London-based investor event, to update the market on the future growth and financial plans for the Group, will now be held in the first half of 2025.  Further details will be announced in due course.

OUTLOOK

The Board is pleased with the further progress made by the Group in the first half of the year and with the results reported today.

During the first six months, we have completed the £16.0 million investment in a new site in Crawley to accelerate growth and give greater access to London and the South East for our HORECA business, have opened a depot in Enfield for our Hotel Linen operation and continued to improve efficiency and capacity at several other locations through ongoing investment.  We continue to believe that investing in our estate will give us an advantage in the market in delivering unrivalled service to our customers in the most efficient way.

Our investment in a leading linen business in the Republic of Ireland in 2023, which itself is a growing market, represents a significant step in our strategy to expand the range and scale of services we offer and with our Northern Ireland business, can now service the whole of the island of Ireland.  As announced today, we have also acquired Empire which, combined with Regency acquired in 2023, gives us further opportunity to expand our servicing of luxury hotels in London and the South East.

We expect to exit 2024 with strong progression towards previous levels of adjusted operating margin and adjusted operating profit for the year, before the benefit from Empire, in line with current market expectations.  The Board remains confident that, as energy costs stabilise to lower levels and as operational efficiencies are further improved, divisional margins will continue to return towards those achieved in 2019, with an overall Group adjusted operating margin of at least 14.0% being achieved in 2026.

RESPONSIBILITY STATEMENT

The condensed consolidated interim financial statements comply with the Disclosure Guidance and Transparency Rules ('DTR') of the United Kingdom's Financial Conduct Authority in respect of the requirement to produce a half-yearly financial report.  The condensed consolidated interim financial statements are the responsibility of, and have been approved by, the Directors.

The Directors confirm that to the best of their knowledge:

§ the condensed consolidated interim financial statements have been prepared in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the United Kingdom;

§ this interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months of the financial year and a description of the principal risks and uncertainties for the remaining six months of the year); and

§ this interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).

The Directors of Johnson Service Group PLC are listed in the Johnson Service Group PLC Annual Report for 2023 and remain unchanged.  Details of the Directors are available on the Johnson Service Group PLC website: www.jsg.com

By order of the Board

Peter Egan                                            Yvonne Monaghan

Chief Executive Officer                          Chief Financial Officer

3 September 2024                                  3 September 2024

Forward Looking Statements

Certain statements in these condensed consolidated interim 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 interim 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.