Refinancing and Trading Update

RNS Number : 0899V

Johnson Service Group PLC

06 January 2012

 



6 January 2012

Refinancing of Bank Facilities and Pre Close Trading Update

Refinancing of Bank Facilities

Johnson Service Group PLC ("the Group") is pleased to announce that it has entered into an agreement to amend and restate its bank facilities, which were due to expire in April 2013, under a new £78.5 million Term and Revolving Facilities Agreement ("New Facilities") which runs to 31 May 2015. The New Facilities are expected to be drawn by mid-January 2012 and provide increased headroom for strategic bolt-on acquisitions.

The Banks in the New Facilities are Lloyds Banking Group, The Royal Bank of Scotland and Santander.

The New Facilities, which are secured, comprise an amortising Term Loan of £53.5 million and a Revolving Loan of £25 million, which includes an Overdraft Facility of £5 million. The Term Loan amortises from December 2012. Amendment fees of 1.25% are payable in cash at the start of the New Facilities, which will be amortised over the estimated life of the New Facilities. The margin payable on drawings under the New Facilities ranges from 250 to 300bps over LIBOR, with the initial margin set at 250bps. Financial covenants that the Board believes are appropriate for the New Facilities have been agreed and will be tested quarterly. These comprise cash flow, interest and gearing covenants.

The Group has continued to reduce its debt over the last year with net debt falling from £59.5 million in December 2010 to an anticipated level of below £50.0 million at the end of December 2011.

Trading Update

The Group is expected to announce results which are marginally below market expectations with the Drycleaning division accounting for the majority of the shortfall. Drycleaning continues to introduce new services and initiatives to its locations to stimulate revenue but the tough trading conditions on the High Street have limited their impact. The FM division is expected to improve slightly on its first half performance. Textile Rental continues to perform well with strong levels of customer retention and new wins.

John Talbot, Executive Chairman, said: "We expect to deliver a solid trading performance given the difficult market backdrop. We are delighted with the new banking facilities, which demonstrate continued support from the three banks and provide increased headroom to make strategic acquisitions for the long term benefit of the business."

Enquiries:

Johnson Service Group PLC	Tel:  [phone]
John Talbot, Executive Chairman
Yvonne Monaghan, Finance Director
Investec Investment Banking  (NOMAD)	Tel: [phone]
David Flin James Grace Cara Griffiths
Threadneedle Communications	Tel: [phone]
Graham Herring John Coles

 

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