MIDAS SHARE TIPS UPDATE Still a smart bet...uniform provider Johnson is up by 438% since we tipped it in 2010
Service provider: The group delivers linen to top establishments such as The Delaunay in Covent Garden, pictured above
It is always a pleasant surprise when a company reports that its results will be above market expectations. But it is especially reassuring now, when many firms say they are worried about economic prospects following the Brexit vote in June.
Last week, Johnson Service Group delivered strong interims, expressed confidence about its prospects and said full-year results should also beat expectations.
The shares have barely changed at 102¼p, but they have risen sharply since early summer, when Brexit fears sent them down to a low of 82½p.
Midas recommended Johnson in 2010, when the shares were 19p and the firm was just starting to transform itself into what it is today - the UK's top provider of uniforms for work, its largest dry-cleaner and a market leader in the provision of linen to restaurants and hotels.
The group delivers linen to top establishments such as The Delaunay in Covent Garden and Heston Blumenthal's the Fat Duck in Bray, Berkshire, and its workwear is worn by employees at companies ranging from Jaguar Land Rover to biscuit maker McVitie's.
In the first six months of this year, profits soared by 40 per cent to £14.1million and the dividend rose 23 per cent to 0.8p. Brokers expect full-year profits to rise 31 per cent to £33.2million and a dividend of 2.4p is pencilled in, against 2.1p last year.
Johnson has had a busy year, making three acquisitions to strengthen its presence in the fast-growing linen rental market. Chief executive Chris Sander said they have made better than expected progress so far. And analysts say the shares could hit 125p over the next 12 months.
Midas verdict: Johnson is a well-managed, growing firm and the latest results are impressive. Shareholders who invested back in 2010 might be tempted to sell now, but they should stick with the stock. New investors may also want to take a close look.
Traded on: AIM Ticker: JSG C ontact: 01928 704600 or jsg.com