Johnson Service Regulatory News (JSG)

8 Jan 2010 07:00



8th January 2010

Johnson Service Group PLC

Pre Close Trading Statement

As indicated in December, the Group traded satisfactorily during 2009 giving an overall result in line with expectations despite the challenging conditions within the UK economy throughout the last 12 months. 

Textile Rental

Profits in the Textile Rental division are expected to show a modest increase over 2008 despite lower revenue. As reported at the half year, the Textile Rental division has been impacted by both a higher incidence of business closures and by reduced spending by existing customers. This has resulted in reduced revenue and profitability in Johnsons Apparelmaster compared with 2008, with the second half revenue similar to that experienced in the first 6 months of 2009. We are pleased with new customer wins and we believe that we are continuing to gain market share. 

Stalbridge has continued to focus on customer service and has had success in winning new customers. It has traded above our expectations in the second half, as the business continued to improve efficiency, and it has made a contribution of some £1 million for the year as a whole as compared to the £0.5 million loss incurred in 2008. 

Drycleaning

Our Drycleaning business has continued to see varying levels of high street spending and like for like sales in the second half were only slightly improved on those experienced in the first half. The investment in modernising stores to promote the GreenEarth® technology has continued and we remain encouraged by the revenue growth in the GreenEarth® branded stores. However, although management action had been taken to reduce costs, profits were lower than in 2008, exacerbated by the very poor weather in December.

Facilities Management

SGP has achieved modest profitability and revenue growth in a very difficult market in 2009, absorbing the impact of the recent failure of Threshers and the continuing pattern of existing customers restricting their spending levels, including that on major project work. 

A significant number of contract renewals have been signed during 2009 in addition to new wins such as Subway, Scottish & Newcastle and South West Hants LIFT, all of which are now on stream. The expansion of the Public Sector PFI contract portfolio continued with Worcester Library, due to come on stream at the end of 2010.

In 2010 we are intending to invest in additional infrastructure to enable the SGP management team to achieve accelerated growth in the medium to longer term, although this will restrict profit growth in the current year.

Net Debt

Net debt at the end of December is expected to be approximately £68.0 million (June 2009: £75.5 million). As announced on 21st December 2009 the Group has secured new bank facilities to April 2013 at an initial amount of £78.5 million.

Summary

Trading conditions remained challenging throughout 2009 and in these circumstances we are pleased to be anticipating an overall result in line with expectations. 

Enquiries:

Threadneedle Communications

Graham Herring/John Coles

Tel: 020 7653 9850