Disposal of Alex Reid Limited

RNS Number : 8613S

Johnson Service Group PLC

06 December 2012

 

6 December 2012

Disposal of Alex Reid Limited

Johnson Service Group PLC (the "Company") is pleased to announce that it has completed the sale of the entire share capital of Alex Reid Limited ("Alex Reid") to Christeyns UK Limited ("Christeyns") (the "Disposal"), for a cash consideration of £2.1 million on a debt free basis (the "Consideration"), which was paid on completion of the Disposal.  The proceeds of the Disposal will be used to reduce the Company's debt. The Consideration is subject to adjustments to reflect the actual net assets of Alex Reid at completion.

Alex Reid is a drycleaning and laundry consumables supplies and machinery business, which formed part of the Company's Drycleaning business. The total revenue of Alex Reid for the year ended 31 December 2011 was £12.0 million of which £3.6 million related to inter-Company contracts and adjusted operating profit was £0.2 million. As at 30 June 2012, Alex Reid had net assets (excluding debt and inter-Company debt) of £ 2.3 million.

Johnson Cleaners UK Limited ("Johnson Cleaners"), the Company's retail drycleaning business, has signed a three year supply agreement with Christeyns on terms similar to those in operation between Alex Reid and Johnson Cleaners prior to the disposal.

Christeyns is a major detergent supplier to the UK laundry market and an existing supplier to the Company's Textile Rental business.  We are confident in the ability of Christeyns to maintain a high standard of service to Johnson Cleaners going forward.

Commenting on the disposal John Talbot, Executive Chairman of Johnson Service Group said: "In July we announced the conclusion of a strategic review of our Drycleaning business.  As part of that review it was decided that Alex Reid was not a core business for the Group going forward. We are pleased that we have secured a multi-year agreement to continue to use the services of Alex Reid under its new ownership."

Enquiries:

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

 

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