LONDON (ShareCast) - (Sharecast News) - Sales collapsed at Johnson Service Group last month, after Covid-19 and subsequent lockdown measures caused clients across its markets to temporarily close.
The Aim-listed textiles services provider said trading in the first two months of the year had been in line with expectations.

However, since then it had seen a "significant" amount of disruption across markets because of the pandemic. Its hospitality division - which serves the hotel, restaurant and catering markets - saw sales collapse 97%. In the first two months of the year, organic growth had been running at around 9%.

At its workwear segment, which provides clothing as well as laundry services to key industries, trading was 12% lower in April.

Johnson said it had furloughed "a significant proportion" of its employees, primarily in the hospitality unit, while the management team had taken a temporary 20% salary reduction.

It had also ceased processing at the "vast majority" of its 18 hospitality sites and was in talks with its three main banks to reset covenants into 2021, "to reflect the significant changes we are currently experiencing in trading".

Looking ahead, Johnson said: "As a result of the significant uncertainty surrounding the impact of Covid-19, the board is unable to provide financial guidance until the expected duration of the current stay at home measures, as well as the details of how and over what timeframe they will be relaxed thereafter, becomes clearer.

"The board remains confident in the prospects and viability of the group."

As at 1345 BST, shares in Johnson were down 2% at 116.8p.

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