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Johnson Service jumps as business gets back to normal

Last updated: 00:32 05 May 2022 AEST, First published: 17:40 04 May 2022 AEST

johnson service

Johnson Service Group plc (LSE:JSG) is in demand after an upbeat annual meeting statement.

The textile services provider said it planned to reinstate its interim dividend in September as sales volumes continued to return to more normal levels.

It said workwear saw like-for-like revenue growth of more than 3% in the first quarter compared to the same time last year.

Its linen business, which is a supplier to hotels and caterers, saw volumes improve to reach 91% of normal in April.

It said: "Our customers are expecting a strong summer season and we have plans in place to ensure that our processing capacity can meet this increasing demand.  In addition, there is an encouraging pipeline of new business opportunities comprising both new openings from existing customers as well as new customers."

Like everyone, the company faces pricing pressures.

But it has fixed 87% of its anticipated gas requirement for the remainder of this year at prices significantly below the current day ahead rate.

It has also managed to pass on price increases to help offset some of the cost inflation it faces.

Its shares have climbed 7.49% to 112p on the news.

2.22pm: Luceco loses out as customers deal with excess stocks

Shares in Luceco PLC (LSE:LUCE) have blown a fuse after warning on profits.

The firm, a manufacturer and distributor of wiring accessories, EV chargers, LED lighting, and portable power products, said last year customers had ordered more stock than it now appears they needed.

So it expects a revenue shortfall this year of £15mln and a £10mln dent in operating profits.

In the first quarter of the year revenues fell 3%, with a slowdownn DIY activity hitting the higher margin wiring accessories business.

It expects profits to recover in 2023 due to the temporary nature of the current supply chain rebalancing.

Chief executive John Hornby said: "One of the challenges presented by COVID-19 was to maintain appropriate inventory levels amid unprecedented supply chain disruption. It is now clear that some of our customers have emerged from this period with surplus stock. We can directly control our own inventory levels, which I believe we did well and led to market share gains, but inevitably we have less visibility of, or influence over, stocking choices made elsewhere in our supply chain.

"The normalisation of customer inventory levels will hold back profits in 2022, which is disappointing, but I do not believe it diminishes either the progress we have made over recent years or our long-term potential. We emerge from the pandemic a better business with stronger positions in our existing markets and with significant growth potential in new markets such as EV charging. I remain excited by our long-term potential."

Its shares however have lost 28.21% on the news to 140p.

12.30pm: Physiomics moves higher after expanding technical team

Investors in Physiomics PLC (AIM:PYC) have given a positive welcome to a new senior appointment.

Shares in the oncology consultancy are up 5.26% to 5p after it announced that Dr Cristian Gradinaru had joined its technical team as a senior modeller.

Dr Gradinaru has held senior scientific roles at companies including Circassia Pharmaceuticals and F-star Biotechnology where he led pre-clinical and clinical projects.

Chief executive Dr Jim Millen said: "He will provide additional expertise and capacity to support our expanding client base and we look forward to working with him".

11.21am: eEnergy says profits will be below expectations

eEnergy PLC (AIM:EAAS) has lost its spark after saying its full year results would be below market expectations.

The energy services company blamed a slower than expected recovery in Ireland due to longer COVID-19 lockdowns, as well as customers entering into larger multi-service contracts resulting in longer conversion times from signing to installation.

For the year it is now forecasting £23mln of revenue and around £3mln of adjusted earnings.

Further out, it said it planned to increase operational investment in 2023, in particular in its electric vehicle charging point business eCharge and onsite solar generation.

So it expects lower margins in 2023 than the market currently expects.

Meanwhile Ric Williams has said he will step down as chief financial officer in July to pursue other opportunities.

The company's shares are down 23.91% at 8,75p.

9.54am: Joules under pressure after latest warning

Joules Group PLC (AIM:JOUL) has lost more than a third of its value after another profit warning and the departure of its chief executive.

The retailer, which warned in February that trading was below forecasts, has now said profits would be below expectations despite a 10% rise in first quarter revenues, due to consumer confidence being dented by the rising cost of living.

In particular it cut prices to attract customers, saw subdued demand for home and garden products, and suffered weaker than anticipated third party sales.

It said the current challenges were likely to continue during the first half of the year, so it was cautious about its near term outlook.

It aims to improve profitability and cash generation through cost restraint and clearance of aged stock.

Meanwhile chief executive Nick Jones plans to step down in the first half after three years at the business.

He said: "Joules is a fantastic brand with great people, loyal customers, and a differentiated product offering. Underpinned by the strategic actions we are taking to optimise the business, Joules will emerge stronger and better positioned to achieve long-term, profitable growth."

But its shares have slumped 35.36% to 35.55p.

AJ Bell investment director Russ Mould said: “Joules’ shares dived sharply once again this morning as it warned on profit and Jones’ position had probably been rendered untenable. Not that his successor will be blessed with a strong set of cards to play.

“Household budgets are constrained and while luxury brands serving the very wealthy usually ride out downturns well and cheaper outlets can attract shoppers who are trading down, more premium high street brands look vulnerable.”

9.15am: CAP-XX (AIM:CPX) in graphene joint venture with Australia's Ionic

CAP-XX (AIM:CPX) is climbing after it signed a joint venture for what it called a "transformational new graphene material".

The deal is with Australia's Ionic Industries, which is developing new forms of graphene for a variety of markets, and involves the commercialisation of reduced graphene oxide (rGO) for supercapacitors and other energy storage devices.

CAP-XX (AIM:CPX) will manufacture and sell supercapacitors and energy storage devices using rGO, on behalf of the joint venture, under the CAP-XX (AIM:CPX) brand.

Its customers are expected to receive samples around mid-2024.

CAP-XX (AIM:CPX) chief executive Anthony Kongats said: "[The joint venture] gives CAP-XX (AIM:CPX) the opportunity to commercialise a new class of supercapacitors with significantly higher energy densities using Ionic's proprietary reduced graphene oxide. 

"Our immediate goal is to translate the rGO technology into a system that can meet all the stringent performance and specification requirements of commercial supercapacitors."

The company is up 13.98% at 5.3p.

8.40am: Botswana Diamonds shines after positive news from South Africa

Shares in Botswana Diamonds PLC (AIM:BOD) are sparkling after postive news from its Thorny River property in South Africa.

It said it had discovered the largest anomaly to date on Thorny River consistent with a kimberlite pipe of 25m in diameter.

Chairman John Teeling said: "The discovery of our largest anomaly to date is an important development for Thorny River as this could add significant additional kimberlite tonnage to the developing mine plan".

A detailed drilling programme is planned for the South African dry season this year which is July to August.

Botswana is up 17.35% to 1.35p.

Also heading higher is Oilex Ltd.

Its shares have added 8.97% to 0.21p after a positive update from its Cambay field and a fundraising.

It said that after a lengthy shut-in of production at Cambay, gas production and sales have been stabilised from one well, C-73. It plans to co-mingle production from the C-77H horizontal and fracced well while ramping up to higher sustainable production rates.

Meanwhile it is raising £2.5mln with a placing at 0.2p a share with existing, institutional and other shareholders.

Oilex's Chief Executive Officer, Roland Wessel, said: "We are very pleased with the support of existing and new institutional shareholders in the placing.  The placing price of GBP 0.20 pence represents no discount to the current price and shows confidence that these shareholders see significant value going forward.

"We are now fully funded for the July re-frac of C-77H and we also look forward to increasing daily production rates."

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