Johnson Service Group PLC
19 May 2004
19th May 2004
Johnson Service Group PLC
Acquisition of Sketchley Drycleaning Shops
Johnson Service Group PLC ('Johnson') announces the acquisition, through its
subsidiary Johnson Cleaners UK Ltd, of the entire issued share capital of
Sketchley Services Limited ('Sketchley'), from the Timpson Group ('the Vendor').
Sketchley Services Ltd is a new company to which carefully selected parts of the
business, assets and liabilities of the Vendor relating to the high street
drycleaning operation were transferred prior to acquisition by Johnson. The new
company has a portfolio of 103 drycleaning shops, and retains the Sketchley
brand. The Vendor will continue to use the Sketchley name under licence in
concession arrangements with one supermarket chain and certain Timpson shops in
the medium term.
The initial purchase consideration, on a debt free basis, will be a nominal £1.
Subject to agreement with the Inland Revenue, Sketchley will benefit from the
transfer of substantial tax losses following the reorganisation of the Vendor's
group. Johnson expects Sketchley to be able to realise cash benefits from the
crystallisation of these tax losses during the period 3 to 6 years from
completion and has agreed to pay to the Vendor, by way of additional deferred
consideration, a proportion of the cash benefits when received. This proportion
is limited to a maximum of £5 million, and for the Vendor to receive this
maximum amount Sketchley would have previously realised, in aggregate, cash
benefits of £8.5 million. The deferred consideration would be satisfied by the
issue of loan notes 9 months after the end of the relevant accounting period in
which the losses are utilised.
The location of the Sketchley shops is complementary to the Johnson portfolio,
firmly establishes Johnson in London and strengthens coverage in the South and
South East of England. After a period of refurbishment and reorganisation of
the Sketchley shops, there will be potential for Johnson to achieve cost savings
by spreading existing fixed overheads across a wider base and by increasing the
throughput of Johnson's specialist regional processing centres. The estimated
revenue cost of the reorganisation programme is up to £2 million in the current
year and the annualised present running level of turnover from the acquired
business is estimated at some £6.5 million.
Following the acquisition, Johnsons Cleaners will operate from circa 620 high
street, supermarket and drive-in locations throughout Great Britain.
Johnson CEO Stuart Graham said 'The Sketchley brand has suffered from lack of
direction and focus over recent years. We are however delighted to have been
able to acquire a new and clean operating company without the burden of
unoccupied property costs which has haunted the Sketchley business for a long
time. We believe that the value of the acquired business will be significantly
enhanced by the introduction of Johnson's knowledge and operating procedures. '
David Bryant, Managing Director of Johnson Cleaners UK added 'I am pleased to
have acquired the Sketchley brand which is exceptionally strong in the south of
the country. The acquired Sketchley units which are outside of London will be
re-branded Johnsons and absorbed into our existing management structure. The
inner London shops will continue to be branded Sketchley.'
For further information, please contact:
Hudson Sandler Johnson Service Group PLC
Sandrine Boussard / James Benjamin Stuart Graham, CEO
Telephone: 020 7796 4133 Mike Sutton, CFO
Telephone: 0151 933 6161
Notes to editors - The Johnson Service Group
The Johnson Service Group has two principle activities: the traditional
businesses focusing on textiles and the recently established facilities
management operation. Over the last 2 years these core activities have been
developed and grown through a series of strategic acquisitions. The Company has
been extensively overhauled under the new Chief Executive Stuart Graham.
Textile related support services include Johnsons Apparelmaster, Britain's
leading launderer and hirer of workplace clothing; CCM a manufacturer and
sourcer of workplace garments; Stalbridge Linen, Britain's leading linen
supplier to the leisure, professional catering and corporate hospitality sector;
Johnson Hospitality Services, recently acquired and expanded, the British market
leader in the hire of catering equipment, hospitality furniture and related
items to sporting, entertainment and similar events. Johnsons Cleaners,
Britain's No. 1 dry cleaning brand, and the newly acquired Sketchley provide a
nationwide network of circa 620 dry cleaning shops. Jeeves of Belgravia provides
an exclusive dry cleaning service within the London area.
The newly established facilities management division, through Johnson Workplace
Management, provides of a fully comprehensive range of services, utilising a
unique business model focusing on management and property expertise.
This information is provided by RNS
The company news service from the London Stock Exchange