Johnson sells loss-making maintenance business
DRY cleaning to facilities management group Johnson Services has sold its mechanical and electrical engineering maintenance services business for £300,000.
The Runcorn-based Group sold loss-making Workplace Engineering Limited to MSS Facilities, a subsidiary of AIM-listed Managed Support Services.
MSS paid an initial £200,000 cash, with another £100,000 to follow, which Johnson said was dependant on the “satisfaction of certain post completion matters”.
The group said Workplace Engineering had a disappointing performance in the first half of the year, racking up an operating loss of £500,000. Following a review, the division that specifically works on new build projects was closed, but the rest of the business continued to operate at a loss.
The company said in a statement: “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 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.”
The total loss from discontinued operations is expected to be £4.3m, comprising the trading loss to November 30 of around £1.5m, reorganisation and closure costs of £1.2m and goodwill write off of £1.6m. The total cash effect of the reorganisation and closure costs is anticipated to be £700,000.
The company added that its three major divisions in textile rental, dry cleaning and facilities management are performing “satisfactorily” and in line with expectations.
