Johnson upbeat after one off costs dent earnings
ACQUISITIONS, finance charges and restructuring costs have dented profits at Johnson Service Group, the Cheshire company which runs the Johnson drycleaning chain as well as facility management and textile rental businesses.
The AIM listed Preston Brook-based group said profits in the six months to June fell to £900,000 from £5.2m last year as revenues rose to £126.3m from £117.3m in the same period a year ago.
Before one off costs Johnson said its adjusted profits were 7.7% lower at £6m, compared with £6.5m in 2011.
The company said was pleased with the underlying performance of the business and raised its dividend 9.1% to 0.36p per share.
It said 103 poorly-performing Johnsons drycleaning shops had now been closed down as a result of restructuring plan announced in early July and which will cost the group £24m which will be charged in the second half.
As part of the reorganisation of the business the Knowsley head office of the drycleaning business will move to a location in Fulwood, Preston, occupied by the textile rental arm. Around 50 staff will be transferring to the Lancashire operation the company said.
Executive chairman John Talbot said: “Given the challenging market conditions I am pleased with the overall performance of the group.
“Textile Rental has performed well during the first half with organic growth of over 4% including a strong increase in new business. I am particularly pleased with the successful integration of the Cannon business which was acquired at the end of March 2012 and is expected to make a positive contribution to profit in the full year.
“Our FM division has also performed well and the acquisition of the Nickleby business in February 2012 is already producing pleasing results. We anticipate that the division will produce improved results in the second half.
“As announced in July we have concluded a strategic review of our drycleaning business and as a result have closed around 100 underperforming branches. I am confident that the actions we have taken will provide the basis for increased profitability in future years.”
