Johnson Service Regulatory News (JSG)

30 Jan 2008 07:01

Johnson Service Group PLC30 January 2008 30th January 2008 Johnson Service Group PLC January Trading Statement Johnson Service Group PLC, the textile related services and facilitiesmanagement Group, announces the following January trading update. Overall, the Group at operating level is trading satisfactorily against abackdrop of market uncertainty. Rental Johnsons Apparelmaster, the market-leading workwear laundering and rentalbusiness, is continuing to perform well. Stalbridge Linen Services, which supplies linen to the premium hotel, cateringand corporate hospitality markets, commenced a strategic realignment of itsbusiness at the beginning of 2007. Whilst the full restructuring programme hasyet to be completed, the business has successfully reduced its levels of loss inthe second half of 2007 compared to the first six months of 2007. This businesswill work more closely with Johnsons Apparelmaster as we continue to reducelosses and improve operational performance. Corporatewear The main activity of the Corporatewear division is the management and supply ofcorporate uniforms to major companies; this business continues to tradesuccessfully. The Corporatewear division has also historically included an operation whichsupplies workwear garments to the rental business of Johnsons Apparelmaster andto third party customers. One of the major external contracts was lost towardsthe end of 2007 and the balance of this workwear operation is currently beingreorganised. The impact of this change has already been factored into theBoard's existing expectations. Drycleaning Our retail drycleaning division, which is Britain's largest drycleaningbusiness, includes Johnson Cleaners and Jeeves of Belgravia. The currentdecline in retail spending and the smoking ban are having some impact on thetrading volumes. Management are seeking to address the impact of these factorsby tight cost control, promotional activity geared up to drive volume through anemphasis on value and by developing a broader product offering. The drive onrepositioning the store portfolio to convenient locations continues and five newsupermarket locations will open in the coming quarter. Johnson Service Groupowns the exclusive UK rights to GreenEarth(R), the silicone-based cleaningprocess, which has significant process and environmental advantages over thetraditional drycleaning methods. The roll out of this new technology iscontinuing. Facilities Management Johnson Facilities Management (JFM) completed 2007 with a strong second halftrading performance with additional fee income from the previously anticipatedloss of a major contract that is now being undertaken in-house by the customer. During 2007 JFM concentrated on reorganising and integrating the two mainbusiness 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 considerablystrengthened with leading industry expertise brought into JFM, and earlyindications are of a growth year in this business activity. As regards the Retail helpdesk, there are ongoing discussions with a number ofblue chip prospective customers, and, at this stage of the year, the pipeline islooking strong. JFM is pursuing a number of new business opportunities, and has already taken onand mobilised two small contracts this year. Group On 28th December 2007, we announced that we had successfully agreed with ourbanking group a waiver of our year end covenant test. The Company is required tonegotiate 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 isconfident that this experience will prove invaluable in the development andimplementation 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 operatingbusinesses are strongly positioned in the markets they operate in. Theycontinued to trade satisfactorily in difficult conditions. Our immediate priority is to secure financial stability for the group in orderthat the operating companies can maximise their full potential. In John Talbot,we have someone with the experience and knowledge to lead us through thechallenges of the next few months. The Group will be announcing its preliminary results for the full year to 31stDecember 2007 at the end of April." Enquiries: Johnson Service GroupJohn TalbotTelephone: 020 7796 4133 on 30th January 2008 only Hudson SandlerMichael Sandler, Sandrine Gallien, Fran ReadTelephone: 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