Johnson Service Group PLC
11 August 2003
11th August 2003
Johnson Service Group PLC
Disposal of Connacht Court Group Limited
Johnson Service Group PLC ('Johnson') announces that it has disposed of the
whole of the share capital of Connacht Court Group Limited ('CCG') Ltd to
National Linen Limited for a net consideration of £14.7 million in cash on
completion, less an adjustment of up to £1.2 million in relation to pension
liabilities. The proceeds from this disposal will be used to reduce borrowings.
CCG, which operated Johnson's textile rental business in The Republic of
Ireland, was acquired in 1998 for a consideration of £24.9 million. Since
acquisition and, as noted in the CEO's review of operations in the Annual Report
for 2002, this business has produced consistently worsening returns and reported
an adjusted operating profit of nil in 2002.
Turnover and loss before tax of CCG in 2002 were £17.9 million and £0.9 million
respectively and net assets at December 2002 were £10.5 million.
In spite of management action reducing the cost base and improving the sales
performance management concluded that future prospects for the business were not
sufficient to warrant the continued investment and that this was the right time
to make a disposal.
Johnson's results for the first half of 2003, to be announced in mid September,
will include an exceptional charge in respect of the write down of goodwill on
CCG of some £10.5 million.
Notes to Editors:
Johnson is the UK's market leader in workwear textile rental and the nation's
leading retail drycleaner. Other activities include washroom services and the
manufacture and sourcing of garments.
Johnsons Cleaners, the drycleaning business, has approximately 500 units
throughout Britain with a relatively small presence in Greater London and the
South East of England.
The acquisition by Johnson of Jeeves of Belgravia ' London's Finest Dry Cleaners
' was announced on 12 May 2003.
Enquiries Johnson Service Group PLC
Stuart Graham CEO Tel. 0151 933 6161
Hudson Sandler
Wendy Baker Tel: 020 7796 4133
This information is provided by RNS
The company news service from the London Stock Exchange
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