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RNS Number : 0899V

Johnson Service Group PLC

06 January 2012

6 January 2012

Refinancing of Bank Facilities and Pre Close Trading Update

Refinancing of Bank Facilities

Johnson Service Group PLC ("the Group") is pleased to announce that it has entered into an agreement to amend and restate its bank facilities, which were due to expire in April 2013, under a new GBP78.5 million Term and Revolving Facilities Agreement ("New Facilities") which runs to 31 May 2015. The New Facilities are expected to be drawn by mid-January 2012 and provide increased headroom for strategic bolt-on acquisitions.

The Banks in the New Facilities are Lloyds Banking Group, The Royal Bank of Scotland and Santander.

The New Facilities, which are secured, comprise an amortising Term Loan of GBP53.5 million and a Revolving Loan of GBP25 million, which includes an Overdraft Facility of GBP5 million. The Term Loan amortises from December 2012. Amendment fees of 1.25% are payable in cash at the start of the New Facilities, which will be amortised over the estimated life of the New Facilities. The margin payable on drawings under the New Facilities ranges from 250 to 300bps over LIBOR, with the initial margin set at 250bps. Financial covenants that the Board believes are appropriate for the New Facilities have been agreed and will be tested quarterly. These comprise cash flow, interest and gearing covenants.

The Group has continued to reduce its debt over the last year with net debt falling from GBP59.5 million in December 2010 to an anticipated level of below GBP50.0 million at the end of December 2011.

Trading Update

The Group is expected to announce results which are marginally below market expectations with the Drycleaning division accounting for the majority of the shortfall. Drycleaning continues to introduce new services and initiatives to its locations to stimulate revenue but the tough trading conditions on the High Street have limited their impact. The FM division is expected to improve slightly on its first half performance. Textile Rental continues to perform well with strong levels of customer retention and new wins.

John Talbot, Executive Chairman, said: "We expect to deliver a solid trading performance given the difficult market backdrop. We are delighted with the new banking facilities, which demonstrate continued support from the three banks and provide increased headroom to make strategic acquisitions for the long term benefit of the business."

Enquiries:

 
 Johnson Service Group PLC             Tel: 01928 704600 
 John Talbot, Executive Chairman 
 Yvonne Monaghan, Finance Director 
 
 Investec Investment Banking (NOMAD)   Tel: 020 7597 4000 
 David Flin 
  James Grace 
  Cara Griffiths 
 
 Threadneedle Communications           Tel: 020 7653 9850 
 Graham Herring 
  John Coles

This information is provided by RNS

The company news service from the London Stock Exchange

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