Trading Statement

Johnson Service Group PLC 30 January 2008 30th January 2008 Johnson Service Group PLC January Trading Statement Johnson Service Group PLC, the textile related services and facilities management Group, announces the following January trading update. Overall, the Group at operating level is trading satisfactorily against a backdrop of market uncertainty. Rental Johnsons Apparelmaster, the market-leading workwear laundering and rental business, is continuing to perform well. Stalbridge Linen Services, which supplies linen to the premium hotel, catering and corporate hospitality markets, commenced a strategic realignment of its business at the beginning of 2007. Whilst the full restructuring programme has yet to be completed, the business has successfully reduced its levels of loss in the second half of 2007 compared to the first six months of 2007. This business will work more closely with Johnsons Apparelmaster as we continue to reduce losses and improve operational performance. Corporatewear The main activity of the Corporatewear division is the management and supply of corporate uniforms to major companies; this business continues to trade successfully. The Corporatewear division has also historically included an operation which supplies workwear garments to the rental business of Johnsons Apparelmaster and to third party customers. One of the major external contracts was lost towards the end of 2007 and the balance of this workwear operation is currently being reorganised. The impact of this change has already been factored into the Board's existing expectations. Drycleaning Our retail drycleaning division, which is Britain's largest drycleaning business, includes Johnson Cleaners and Jeeves of Belgravia. The current decline in retail spending and the smoking ban are having some impact on the trading volumes. Management are seeking to address the impact of these factors by tight cost control, promotional activity geared up to drive volume through an emphasis on value and by developing a broader product offering. The drive on repositioning the store portfolio to convenient locations continues and five new supermarket locations will open in the coming quarter. Johnson Service Group owns the exclusive UK rights to GreenEarth(R), the silicone-based cleaning process, which has significant process and environmental advantages over the traditional drycleaning methods. The roll out of this new technology is continuing. Facilities Management Johnson Facilities Management (JFM) completed 2007 with a strong second half trading performance with additional fee income from the previously anticipated loss of a major contract that is now being undertaken in-house by the customer. During 2007 JFM concentrated on reorganising and integrating the two main business streams which provide property management services to the financial, retail and leisure sectors and the commercial office and public sector market. For 2008, the Service charge and Agency businesses have been considerably strengthened with leading industry expertise brought into JFM, and early indications are of a growth year in this business activity. As regards the Retail helpdesk, there are ongoing discussions with a number of blue chip prospective customers, and, at this stage of the year, the pipeline is looking strong. JFM is pursuing a number of new business opportunities, and has already taken on and mobilised two small contracts this year. Group On 28th December 2007, we announced that we had successfully agreed with our banking group a waiver of our year end covenant test. The Company is required to negotiate with the Banks a longer term banking solution before 30th April 2008. Net debt at 31st December was approximately £170 million. John Talbot was appointed interim Chief Executive Officer on 28th December 2007. He has over 25 years turnaround and restructuring experience. The Board is confident that this experience will prove invaluable in the development and implementation of the recovery plan. Simon Sherrard, Chairman of Johnson Service Group, commented: '2007 has been a very difficult year for the Group. However, all our operating businesses are strongly positioned in the markets they operate in. They continued to trade satisfactorily in difficult conditions. Our immediate priority is to secure financial stability for the group in order that the operating companies can maximise their full potential. In John Talbot, we have someone with the experience and knowledge to lead us through the challenges of the next few months. The Group will be announcing its preliminary results for the full year to 31st December 2007 at the end of April.' Enquiries: Johnson Service Group John Talbot Telephone: 020 7796 4133 on 30th January 2008 only Hudson Sandler Michael Sandler, Sandrine Gallien, Fran Read Telephone: 020 7796 4133 For more information on the Johnson Service Group PLC: www.johnsonplc.com This information is provided by RNS The company news service from the London Stock Exchange
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