IFRS Re-Statement

Johnson Service Group PLC
07 July 2005

                           JOHNSON SERVICE GROUP PLC

                                                                     7 JULY 2005





IMPACT ON 2004 COMPARATIVE FINANCIAL INFORMATION FROM THE ADOPTION OF
INTERNATIONAL FINANCIAL REPORTING STANDARDS



Overview of impact

The introduction of IFRS has little impact on the Group's results, excluding the
effect of goodwill amortisation, and there is no impact on the Group's cash flow
or underlying business processes.



The impact of IFRS adoption on the consolidated Income Statement and Balance
Sheet of Johnson Service Group PLC is summarised below.



For further information, please contact:


Johnson Service Group PLC                              Hudson Sandler

Stuart Graham, CEO                                     Michael Sandler
Jim Wilkinson, CFO                                     Sandrine Gallien
Telephone: [phone]                               Telephone: [phone]
Website: johnsonplc.com



Income statement
For the 52 weeks to 25th December 2004                                 52 weeks to                         52 weeks to
                                                                     25th Dec 2004              IFRS     25th Dec 2004
                                                         Note            (UK GAAP)       Adjustments            (IFRS)
                                                                                £m                £m                £m

OPERATING PROFIT BEFORE RESTRUCTURING COSTS &             3,4                29.6               0.3               29.9
GOODWILL AMORTISATION (see below)
Restructuring costs                                                          (2.0)                               (2.0)
Amortisation of goodwill                                   5                 (7.0)              7.0               0.0
Amortisation of intangible assets                          5                 (0.2)             (0.4)             (0.6)

OPERATING PROFIT                                                             20.4               6.9              27.3

Net interest                                              4,6                (4.7)             (0.8)             (5.5)

PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION                                15.7               6.1              21.8

Tax on profit on ordinary activities                   1,3,4,5,6             (6.2)              0.6              (5.6)

PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION                                  9.5               6.7              16.2

ADJUSTED PROFIT ON ORDINARY ACTIVITIES BEFORE                                24.9              (0.5)             24.4
TAXATION

ADJUSTED BASIC EARNINGS PER SHARE                                            31.4p                               31.5p
ADJUSTED EARNINGS PER SHARE (Fully diluted)                                  30.9p                               30.9p



Note:  adjusted profit before tax and adjusted EPS exclude restructuring costs,
goodwill amortisation (UK GAAP) and intangible amortisation (IFRS).


Income statement
For the 26 weeks to 26th June 2004                                   26 weeks to                            26 weeks to
                                                                  26th June 2004                IFRS     26th June 2004
                                                                       (UK GAAP)         Adjustments             (IFRS)
                                                        Note                  £m                  £m                 £m

OPERATING PROFIT BEFORE GOODWILL AMORTISATION (see       3,4               14.0                 0.3               14.3
below)
Amortisation of goodwill                                  5                (3.1)                3.1                0.0
Amortisation of intangible assets                         5                (0.1)                                  (0.1)

OPERATING PROFIT                                                           10.8                 3.4               14.2

Net interest                                             4,6               (1.9)               (0.4)              (2.3)

PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION                               8.9                 3.0               11.9

Tax on profit on ordinary activities                  1,3,4,5,6            (3.6)               (0.1)              (3.7)

PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION                                5.3                 2.9                8.2

ADJUSTED PROFIT ON ORDINARY ACTIVITIES BEFORE                              12.1                (0.1)              12.0
TAXATION

ADJUSTED BASIC EARNINGS PER SHARE                                          14.8p                                  14.5p
ADJUSTED EARNINGS PER SHARE (Fully diluted)                                14.6p                                  14.3p



Note:  adjusted profit before tax and adjusted EPS exclude goodwill amortisation
(UK GAAP) and intangible amortisation (IFRS).






Summary of adjustments to operating profit


                                                                                  26th June 2004          25th Dec 2004
                                                                                              £m                     £m

Share based payments                                                                       (0.1)                  (0.2)
Employee benefits                                                                           0.5.                   0.7.
Other                                                                                      (0.1)                  (0.2)

                                                                                            0.3.                   0.3



Balance Sheet
                                                                                  26th June 2004         25th Dec 2004
                                                                                  £m          £m        £m          £m
   Note
           Net Assets as previously reported under UK GAAP                                108.4                 105.5

    2      Dividends                                                            2.4                   8.2

    3      Share Options                                                        0.3                   0.4

    4      Pensions & Healthcare Benefits                                     (25.5)                (25.5)

    5      Goodwill Amortisation                                                3.1                   7.0

    5      Recognition of Intangibles                                              -                 (0.4)

    6      Other                                                               (4.1)                 (3.4)
                                                                                          (23.8)                (13.7)

           Revised Net Assets as restated under IFRS                                       84.6                  91.8





Background

Johnson Service Group PLC (the Group) has historically prepared its financial
statements under UK Generally Accepted Accounting Practice (UK GAAP).  From 2005
onwards the Group will be required to prepare its consolidated financial
statements in accordance with International Accounting Standards (IAS) and
International Financial Reporting Standards (IFRS)* as adopted by the European
Union (EU).  This change applies to all financial reporting for accounting
periods beginning on or after 1 January 2005 and the Group's first published
IFRS results will be its interim results for the six months to 25 June 2005.
The Group's first Annual Report under IFRS will be for the year ended 31
December 2005.  The date for transition to IFRS is 28 December 2003, this being
the start of the earliest period of comparative information.



To explain how the Group's reported performance and financial position are
affected by this change, information previously published under UK GAAP is
restated, in summary format, under IFRS within this document.



As noted below, the unaudited financial information has been prepared on the
basis of IFRS's expected to be adopted by the EU at 31 December 2005.  These are
subject to ongoing review and endorsement by the EU or possible amendment by
interpretative guidance from the IASB and are therefore still subject to change.
  We will update our restated information for any such changes when they are
made and therefore the full financial effect of reporting under IFRS, as it will
be applied and reported upon in the Group's first IFRS financial statements, may
be subject to change.



Transitional arrangements

The rules for first time adoption of IFRS are set out in IFRS 1 'First-time
Adoption of International Financial Reporting Standards'.  In summary, the key
principle of IFRS is a full retrospective application of all IFRS's in force at
the closing balance sheet date for the first IFRS financial statements.  There
are, however, a number of optional and mandatory exemptions that reduce the
burden of retrospective application, in order to assist companies in the
transition to reporting under IFRS.  Where the Group has taken advantage of
these exemptions they are noted below.



Basis of preparation

The financial information has been prepared in accordance with IFRS.  The basis
of preparation assumes that all existing standards issued by the International
Accounting Standards Board (IASB) will be fully endorsed by the EU.



* References to IFRS throughout this document refer to the application of
International Accounting Standards and International Financial Reporting
Standards




Subject to EU endorsement of outstanding standards, and no further changes from
the IASB, this information is expected to form the basis for comparatives when
reporting financial results for 2005, and for subsequent reporting periods.





Principal accounting policy changes and adjustments



1.     IFRS transitional arrangements

The Group has complied with IFRS 1 'First Time Adoption of IFRS'.  The following
optional exemptions from full retrospective application of IFRS accounting
policies have been adopted:



•     Business combinations - The Group has elected not to apply IFRS 3 
      retrospectively to business combinations that took place before the date
      of transition.  As a result, in the opening balance sheet, the net book 
      value of goodwill arising from past business combinations remains as 
      stated under UK GAAP at 27 December 2003.  The provisions of IFRS 3 have 
      been applied prospectively from 28 December 2003.



•     Valuation of properties - The Group has previously not adopted a policy 
      of revaluation but, as permitted by the transitional provisions of FRS15, 
      the carrying amounts of freehold and long leasehold properties reflected 
      previous valuations.  As allowed by IFRS 1, the Group has now elected
      to treat the revalued amount of properties at 28 December 2003 as deemed 
      cost as at that date and will not revalue for accounts purposes in future.



The revised 2004 financial statements have been prepared under the historical
cost convention, as detailed in the policies disclosed below.



2.    IAS 10 Events after the balance sheet date

In accordance with IAS 10, dividends proposed after the balance sheet date do
not meet the definition of a liability as at the year end and are therefore not
accrued.  Consequently, proposed dividends previously reported under UK GAAP
have been reversed under IFRS.



3.    IFRS 2 Share based payments

In accordance with the transitional rules of IFRS 1, IFRS 2 has been applied to
share based payments granted after 7 November 2002 that have not vested by the
date of transition.



The fair value of employee share options (under the Unapproved Share Option
Scheme and the SAYE scheme) have been calculated using a suitable valuation
model in accordance with the rules set out in IFRS 2 'Share Based Payments'.
The costs of the share options have been charged to the Income Statement over
the period in which the options vest, and are adjusted to reflect the expected
and actual levels of vesting.  Under UK GAAP the charge for share based payments
only applied to grants made at a discount to their market value and was based on
intrinsic value.



4.    IAS 19 Employee benefits

The Group has applied the requirements of IAS 19 to defined benefit pension
schemes, post-retirement healthcare and life insurance benefits.  The standard
requires the actuarial assets and liabilities of these schemes to be shown on
the balance sheet and the movement thereon to be reflected in the income
statement and/or statement of recognised income and expense.  As a result,
obligations are measured at discounted present value and plan assets are
recorded at fair value.



The operating and financing costs are recognised separately in the Income
Statement; service costs are spread over the service lives of employees (in open
schemes) and financing costs are recognised in periods as they arise.




The transitional adjustment of £25.5m to net assets at December 2004 also
includes the reversal of the SSAP 24 asset, net of deferred taxation.  The IAS
19 liability is broadly similar to the FRS 17 liability disclosed in the 2004
annual report, the difference being due to the variation in the method of
valuing scheme assets as prescribed by IAS 19.



The Group has elected to disclose current and past service costs as a charge
against operating profit whilst the net return on pension assets and interest
expense on pension liabilities is charged to interest.  Whilst total pension
costs under SSAP 24 and IAS 19 are broadly similar, the difference in the
relative split between operating costs and finance costs results in an
improvement of £0.7 million to the 2004 operating profit.



5.    IAS 38 Goodwill

Under IFRS, goodwill arising on acquisition is capitalised and subject to an
annual impairment review.  Under UK GAAP, goodwill was amortised over its
estimated useful life.  In the year to 25 December 2004, goodwill amortisation
of £7.0 million was expensed to the profit and loss account in accordance with
UK GAAP.  Under IFRS, this charge has been reversed from the Group's income
statement and added back to the net book value of goodwill.



For acquisitions made during 2004, £13.9 million of previously identified
goodwill has been reclassified as separately identifiable intangible assets.
The identification of these intangible assets on business combinations has
resulted in the recognition of a £4.2 million deferred tax liability, together
with a corresponding further increase to goodwill.  The useful economic life of
the intangible assets identified ranges between 5 and 10 years and,
consequently, amortisation of £0.4 million has been charged to profit before tax
under IFRS.



6.    Other adjustments

The 2004 income statement and balance sheet have been further affected by other
minor changes to accounting treatment as a result of IFRS adoption.  The net
effect of these adjustments to profit after tax and net assets is an increase of
£0.4 million (reduction of adjusted PBT and adjusted operating profit of £0.2
million) and a decrease of £3.4 million, respectively.



These changes have arisen as a result of the reclassification of certain
property leases from operating to finance, the revision of residual values on
freehold properties, deferred taxation treatment and changes to deferred revenue
and employee benefit balances.



7.    IAS 14 Segment reporting

The disclosure requirements of IAS14 are more extensive than in SSAP25.  IAS14
provides that one basis of segmentation is primary and the other is secondary.
Extensive disclosure is required for primary segments, with less information
required to be disclosed for secondary segments.  IAS 14 is based on
management's approach to organising the business.



Historically, the Group has reported under three segments (Textile & Hospitality
Services, Drycleaning and Facilities Management & Supplies).  It is expected
that four segments will be reported under IFRS (Corporatewear, Textiles,
Drycleaning and Facilities Management & Supplies).



Disclaimer

The unaudited financial information contained within this statement has been
prepared on the basis of IFRS's expected to be adopted by the EU at 31 December
2005.  These are subject to ongoing review and endorsement by the EU or possible
amendment by interpretative guidance from the IASB and are therefore still
subject to change.  We will update our restated information for any such changes
when they are made and therefore the full financial effect of reporting under
IFRS, as it will be applied and reported upon in the Group's first IFRS
financial statements, may be subject to change.


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