Shares fell sharply on Friday after weak hospitality demand hit the textile rental group’s first-half revenue, despite unchanged full-year margin guidance.
Johnson Service Group PLC (LSE:JSG) shares plunged after the textile rental and workwear group’s half-year trading update revealed a decline in its hotel, restaurant and catering business, its largest revenue segment, even as management stuck to its full-year profit margin target.
Shares are trading at 145.4p as of Friday morning, down 12.5% on the session, having opened at 170.2p, just below the 52-week high of 172.1p set two trading days earlier. The stock fell as low as 144.8p intraday, moving well off the top of its 52-week range and closer to the 52-week low of 120.9p, according to EODHD data.
WELCOME BONUS - Free Share Bundle When You Invest £50!
Get up to £500 cashback for investing with IG.
What the update showed
In a trading update released before Friday’s market open, Johnson Service Group said group revenue for the six months to 30 June 2026 is expected to be broadly flat at £258.0 million, against £257.5 million a year earlier. Group organic revenue softened by around 0.7%. Workwear organic revenue grew 2.6%, helped by price increases, while HORECA organic products revenue fell approximately 2.0%, which the company linked to “challenges within hospitality across the UK and Republic of Ireland.” That marks a reversal for the division, which delivered 1% organic growth across the whole of 2025.
Net debt, including lease liabilities, rose to approximately £190.0 million at the end of June, from £159.2 million at December 2025, reflecting dividend payments, capital expenditure and a £55.0 million share buyback programme, of which £17.3 million had been returned to shareholders as of 9 July 2026. The company said leverage remained towards the lower end of its 1.0x to 1.5x target range, and reiterated its guidance for an adjusted operating margin of at least 14.0% in 2026.
Johnson Service Group has been here before. A year earlier, its equivalent half-year trading update on 10 July 2025 was also followed by a sharp share price fall, suggesting this is a recurring pattern around the group’s summer update rather than an isolated shock.
According to the most recent analyst rating on the stock is a Hold with a 150p price target, well below Friday’s opening level. The average analyst price target stood at 189.67p, reflecting more optimistic estimates set before this update.
Johnson Service Group’s full interim results are due on 8 September 2026, when markets will get a fuller picture of second-half trading and whether hoped-for seasonal improvement in hospitality volumes has materialised. Until then, the stock’s sharp reversal from its recent 52-week high leaves open the question of whether Friday’s move reflects a temporary setback or a more lasting drag from soft UK hospitality demand.