Pre-Close Trading Statement

RNS Number : 9707Y

Johnson Service Group PLC

06 January 2011

 



                                                                        6th January 2011

Johnson Service Group PLC

Pre-Close Trading Statement

Although trading conditions have remained challenging the Board continues to expect to achieve an overall result which is in line with its expectations for the full year.

Facilities Management

SGP has now successfully completed on seven of the eight acquisitions of the PFI contracts from Jarvis PLC (in administration). The eighth contract, with estimated annual revenue of £0.6 million, is now unlikely to be acquired and will cease to be operated under licence in the near future. The acquired contracts have performed in line with management's expectations.

Overall, SGP, including the acquisitions, has performed in line with our expectations in the second half.

Drycleaning

As anticipated, like for like sales benefitted from a gradual improving trend during the year and for the 13 week period from September to late November, and before the impact of the severe winter weather had shown like for like growth of approaching 1%. This positive performance reflects the growth in our newly introduced services offered from our stores and also the concentration on our better performing stores.

As referred to in the interim statement, drycleaning was significantly impacted by the severe winter weather in the first 6 weeks of the year reducing profitability in the first half by some £0.6 million. The severe weather in many areas during November and December had a more significant effect in the second half reducing Divisional profits by over £1.0 million.

It is very unusual to have suffered such extreme weather conditions at both the start and end of the year which will reduce the profitability of the Drycleaning Division for the year as a whole to below the Board's expectations. However we remain encouraged by the underlying performance of the business in the second half. In addition the full impact of the benefits arising from the closure of loss making stores and the reduced central overheads should be seen in 2011.

Textile Rental

The Textile Rental division has continued to perform very well in difficult markets and is expected to show further improved adjusted operating profit performance despite market pressures on revenue.

Both Johnsons Apparelmaster and Stalbridge have performed ahead of the Board's expectations for the year and will have a one off benefit of approximately £0.7 million of operating profit from additional trading days associated with financial year 2010 being a 53 week trading period. 

Net Debt

Net debt at the end of December is anticipated to have reduced to approximately £60.0 million (June 2010: £64.6 million). We anticipate further reductions in debt during 2011. In addition, we have recently submitted to the Inland Revenue the relevant tax return containing the computation of the tax payable in respect of the disposal of the Corporatewear division in 2008 which, along with other adjustments in respect of prior years, is expected to result in a tax repayment of some £7.0 million in the first quarter of 2011. The computation of the amount due in respect of the Corporatewear disposal remains subject to final agreement from the Inland Revenue.

We anticipate announcing the results for the year ended 31 December 2010 on 8 March 2011.

Enquiries:

Johnson Service Group PLC
John Talbot, Executive Chairman	Yvonne Monaghan, Finance Director
Tel:  [phone]	Tel:   [phone]

Threadneedle Communications

Graham Herring/John Coles

Tel: [phone]

Investec Investment Banking
Michael Lacey-Solymar	Martin Smith
Tel:  [phone]	Tel:  [phone]

 

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