Johnson Service Regulatory News (JSG)

15 Dec 2009 07:00



15 December 2009

Johnson Service Group PLC

Disposal of Certain Business Assets and Maintenance Contracts of

Workplace Engineering Limited

As previously reported, the three major divisions of the Group are performing satisfactorily in what continues to be a difficult market. As part of management's ongoing review and rationalisation of the business, the Group announces that it has, with effect from 30 November 2009, disposed of certain business assets and maintenance contracts of Workplace Engineering Limited to MSS Facilities Ltd, a wholly owned subsidiary of Managed Support Services PLC. Initial consideration on completion was £0.2 million in cash, with additional consideration of up to £0.1 million to be received on the satisfaction of certain post completion matters, adjusted for certain movements in working capital.

Workplace Engineering provided mechanical and electrical engineering maintenance services for a range of customers. In addition it engaged in project work for new build. Following the disappointing performance of the Workplace Engineering business in the first half of 2009, when Workplace Engineering reported an operating loss of £0.5 million, management undertook a detailed review of the business. The number of available new projects had reduced significantly during 2009 and as no projects were in progress this division of Workplace Engineering was closed. Workplace Engineering focused on its maintenance division but continued to operate at a loss in a market which is particularly challenging. As a result, management decided to exit from this business stream and focus on its three key divisions.

It is intended to report the results of Workplace Engineering as a discontinued operation for the full year 2009.

The total loss from discontinued operations is expected to be some £4.3 million, comprising the trading loss to 30 November 2009 of approximately £1.5 million, reorganisation and closure costs of approximately £1.2 million and goodwill write off of £1.6 million. The total cash effect of the reorganisation and closure costs is anticipated to be approximately £0.7 million of which £0.3 million remains to be expended.

Overall, the textile rental, facilities management and drycleaning divisions within Johnson Service Group PLC are continuing to trade in line with expectations. A pre-close statement will be issued during week commencing 4 January 2010.

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