TIDMJSG
RNS Number : 3963L
Johnson Service Group PLC
04 September 2012
4 September 2012
Johnson Service Group PLC
Interim Results for the six months ended 30 June 2012
Johnson Service Group PLC, the textile services and facilities
management (FM) Group announces its interim results for the six
months ended 30 June 2012.
OPERATIONAL HIGHLIGHTS
-- Textile Rental traded well with the integration of the Cannon acquisition ahead of schedule
-- FM trading in line with expectations and integration of Nickleby acquisition largely complete
-- Drycleaning restructuring proceeding to plan
-- Adjusted operating profit reduced to GBP7.7 million (H1 2011: GBP8.4 million)(1)
-- Adjusted profit before tax of GBP6.0 million (H1 2011: GBP6.5 million)(1)
-- Adjusted fully diluted earnings per share of 1.9 pence (H1 2011: 1.8 pence)(1)
-- Net debt of GBP57.5 million (31 December 2011: GBP49.7 million)
-- 9.1% increase in interim dividend to 0.36 pence (H1 2011: 0.33 pence)
FINANCIAL SUMMARY
Continuing Operations H1 2012 H1 2011 % change FY 2011
----------------------------- ---------- ---------- --------- ------------
Revenue GBP126.3m GBP117.3m 7.7% GBP242.3m
Revenue GBP120.7m GBP113.6m 6.3% GBP233.5m
(excluding costs recharged
to customers)
----------------------------- ---------- ---------- --------- ------------
Adjusted operating profit GBP7.7m GBP8.4m (8.3)% GBP18.5m(2)
(1)
Adjusted profit before tax GBP6.0m GBP6.5m (7.7)% GBP15.0m(2)
(1)
----------------------------- ---------- ---------- --------- ------------
Adjusted fully diluted EPS
(1) 1.9p 1.8p 5.6% 4.2p(2)
Interim dividend 0.36p 0.33p 9.1% 1.0p
----------------------------- ---------- ---------- --------- ------------
Net debt GBP57.5m GBP51.0m - GBP49.7m
Notes.
1. Before charging GBP1.4 million (H1 2011: GBP1.3 million) of
intangibles amortisation and impairment (excluding software
amortisation) and GBP3.7 million (H1 2011: nil) exceptional
items.
2. Before charging GBP2.6 million of intangibles amortisation
and impairment (excluding software amortisation), an exceptional
pension credit of GBP1.6 million and a charge of GBP0.3 million in
respect of exceptional finance costs.
John Talbot, Executive Chairman of Johnson Service Group,
commented:
"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."
Enquiries:
Johnson Service Group PLC Newgate Threadneedle
John Talbot, Executive Chairman Graham Herring
Yvonne Monaghan, Finance Director John Coles
Tel: 020 7653 9850 (on the day) Tel: 020 7653 9850
Tel: 01928 704 600 (thereafter)
Investec Investment Banking (NOMAD)
James Grace
David Flin
Cara Griffiths
Tel: 020 7597 4000
www.johnsonplc.com
A presentation for analysts will be held today at 9.30am at
Investec, 2 Gresham Street, London EC2V 7QP
Chairman's Statement
I am pleased to report an overall result in line with our
expectations.
Within the newly formed Textile Services division, Textile
Rental has performed very well and has focused on the integration
of the newly acquired Cannon Textile Care contracts, which is
progressing ahead of schedule. The restructuring of the Drycleaning
division, which was announced in early July, is proceeding to plan
with 103 branches now closed. The Facilities Management business,
SGP, has successfully integrated the Nickleby business acquired in
February and is identifying improvements across the wider
portfolio.
Net debt at 30 June was GBP7.8 million higher at GBP57.5
million, reflecting the acquisitions made in the first quarter,
although we continue to have significant headroom under existing
bank facilities.
Based on the encouraging performance of the ongoing business,
the Board has recommended an increase in the interim dividend to
0.36p (H1 2011: 0.33p) which will be paid on 9 November 2012 to
shareholders on the register at close of business on 12
October.
Group Results
Throughout this statement "adjusted operating profit" refers to
operating profit before amortisation and impairment of intangibles
(excluding software amortisation) and exceptional items. "Adjusted
profit before tax" refers to adjusted operating profit less finance
costs.
Total revenue in the six months to 30 June 2012 was GBP126.3
million (H1 2011: GBP117.3 million), while underlying revenue,
excluding costs recharged to customers, was GBP120.7 million (H1
2011: GBP113.6 million). Although the performance of the Textile
Rental and Facilities Management businesses were in line with last
year the difficult trading conditions experienced by the
Drycleaning business resulted in adjusted operating profit of
GBP7.7 million (H1 2011: GBP8.4 million).
Adjusted profit before tax amounted to GBP6.0 million (H1 2011:
GBP6.5 million). The underlying tax rate was 25.9% (H1 2011: 25.6%)
although after the recognition of prior year credits following
agreement with HMRC on certain outstanding tax matters, the actual
tax rate was only 14.0%.
Exceptional items in the first half of 2012 amounted to an
aggregate GBP3.7 million (H1 2011: nil) and comprised GBP0.7
million in respect of acquisition fees and expenses, GBP2.7 million
in relation to the integration of the two businesses acquired in
the first quarter of the year and GBP0.3 million in relation to
further exercises to reduce the quantum and risk relating to the
Group's defined benefit pension schemes.
Net finance costs were GBP1.7 million (H1 2011: GBP1.9 million)
with the benefit of lower average borrowings and margin more than
offsetting the absence of any notional interest credit on pension
liabilities of GBP0.4 million included in 2011.
After amortisation of intangibles (excluding software) of GBP1.4
million (H1 2011: GBP1.3 million) the pre-tax profit was GBP0.9
million (H1 2011: GBP5.2 million).
Adjusted fully diluted earnings per share were 1.9 pence (H1
2011: 1.8 pence) while fully diluted earnings per share after
exceptional items and amortisation and impairment of intangibles
(excluding software amortisation) were 0.5 pence (H1 2011: 1.4
pence).
Restructuring of the Drycleaning Business
As announced on 4 July 2012 the Board is implementing a
restructuring of the Drycleaning business, the total cost of which
is estimated at GBP23.9 million and will be charged as an
exceptional item in the second half of the year.
Of this estimated charge, GBP3.7 million is non-cash and only
GBP3.4 million is an additional cash requirement relating to the
restructuring cost, as the balance is already contractually
committed cash spend on property leases and obligations in the
current and future years irrespective of the restructuring
plan.
The anticipated tax credit in respect of this exceptional
restructuring cost is estimated at GBP5.6 million. It is not
expected that any further corporation tax payments in respect of
2012 earnings will be made in the second half of 2012 or in the
first half of 2013.
We have now closed 103 of the branches identified in the review
and the reduction of the back office and field teams is in progress
and going to plan. The combination of the Textile Rental and
Drycleaning businesses into a single Textile Services division is
underway and will allow a unified branding strategy, significant
cost savings and greater co-operation on sales opportunities in the
future.
Pension Deficit
The recorded net deficit after tax for all post retirement
obligations has reduced to GBP13.9 million at June 2012 from
GBP15.2 million at December 2011, of which GBP12.9 million
(December 2011: GBP14.1 million) is in relation to the Groups'
defined benefit pension schemes. The reduction arises from the
better than expected returns on asset investments which has more
than offset the impact of a reduction in the discount rate applied
to the valuation of the liabilities.
The current agreements reached with the Trustees of the three
defined benefit pension schemes require additional contributions of
GBP2.0 million in 2012 and 2013. Following on from previous
initiatives undertaken over the last three years the Company has,
during the period, undertaken an enhanced partial transfer value
exercise, with a cost of GBP0.3 million charged to the Income
Statement, with the purpose of reducing the overall size of the
Scheme and therefore the level of risk assumed. This exercise
removed a further GBP1.5 million of liabilities from the Schemes.
Further actions are underway in order to continue the de-risking
programme.
Finances
Total net debt at the end of the first half was GBP57.5 million
(31 December 2011: GBP49.7 million). The higher net debt is largely
due to the GBP8.6 million spent, in aggregate, on acquisitions and
associated legal and restructuring costs during the period.
We have now reached agreement with HMRC and have agreed to repay
GBP0.5 million of the GBP5.0 million refund received in 2011
relating to the de-grouping tax charge from 2008. This has been
paid in the second half although, as mentioned above, in view of
the restructuring costs for the Drycleaning business, no other tax
payments in respect of 2012 earnings are expected to be made.
The available bank facility, which runs to May 2015, is
currently GBP78.5 million and will reduce to GBP77.0 million by the
end of December in line with the terms of the facility. This
facility is significantly in excess of the anticipated level of
borrowings, with comfortable cover on all bank covenants, for the
foreseeable future.
Interest cover based on adjusted operating profit was 4.5 times
(H1 2011: 4.4 times), with interest costs continuing to benefit
from the current low levels of LIBOR on the unhedged portion of the
debt. Hedges are in place for GBP40 million of the Term Loan,
whereby LIBOR is replaced by a fixed rate of 3.0% for the period to
8 January 2013 and thereafter by a fixed rate of 1.8% to January
2016.
Dividend
In line with our stated intention of a progressive dividend
policy whilst maintaining an adequate level of cover, the Board has
proposed an interim dividend of 0.36 pence, representing an
increase of 9.1% over the same period last year (H1 2011: 0.33
pence).
The interim dividend will be paid on 9 November 2012 to those
Shareholders on the register of members at the close of business on
12 October 2012. The ex dividend date is 10 October 2012.
DIVISIONAL PERFORMANCE - TEXTILE SERVICES
Textile Rental
The Textile Rental business has performed very strongly
throughout the first six months of 2012. A significant focus during
the period was the preparation for the acquisition and the ongoing
integration of the Cannon Textile Care ("Cannon") business, a major
textile rental operator in the UK, consisting of five laundries and
two distribution depots, which completed with an effective date of
31 March 2012.
Revenue for the Textile Rental business increased by 10.3% to
GBP64.0 million (H1 2011: GBP58.0 million), with organic growth of
4.1% excluding Cannon. The corresponding adjusted operating profit
of the business, excluding Cannon, increased by 5.2% to GBP8.1
million (H1 2011: GBP7.7 million). The total adjusted operating
profit including the initial loss of GBP0.4 million from the Cannon
business remained constant at GBP7.7 million.
Although, as expected, Cannon was marginally loss making in the
first half of the year we are confident that it will make a
positive profit contribution for the full year.
Organic revenue growth for the business was largely driven by
new business sales, which increased by over 26% over the previous
year, combined with an 18% reduction in customer terminations over
the same period.
In preparation for the acquisition, the business invested GBP2.6
million (H1 2011: GBP0.8 million), representing the majority of the
2012 budget, in new plant and equipment to be able to process
additional volume and enable the closure of four of the five Cannon
laundries. The closures are proceeding to plan and all four plants
will be closed by the end of September 2012. Some investment is
being made in the one remaining Cannon plant in Newmarket in order
to improve the future productivity and efficiency of the location
to a level which is more comparable to our existing laundry
facilities.
As a result of the increased new business sales, combined with
rental stock required for the renewal of several key national
customers, rental stock additions increased by 18.5% to GBP10.9
million (H1 2011: GBP9.2 million).
Drycleaning
The Drycleaning business operates under the brands Johnson
Cleaners, our national retail arm, Jeeves of Belgravia, our
predominantly London based luxury business and Alex Reid, our
consumables business and major supplier to the drycleaning and
laundry sector.
Revenue for the division was 2.4% lower at GBP37.0 million (H1
2011: GBP37.9 million) and adjusted operating loss was GBP0.2
million (H1 2011: GBP0.6 million profit). The estimated like for
like sales reduction for the six months to June for our retail
Drycleaning business was 0.4% overall.
Whilst economic and high street trading conditions continued to
be difficult in the first half of the year, there were some
encouraging signs from branches that had received investment
through the introduction of additional services. In 2011 there was
a significant push on improving the laundry service in the estate,
and this continued in 2012 with a further 75 branches converted to
the 'Drop and Go' laundry concept.
Since we announced the restructuring of the Drycleaning division
on 4 July 2012, a total of 103 branches have now been closed. Those
branches identified for closure in the third quarter, as part of
the strategic review, had a like for like sales decline in the
seven months to July of 3.1% compared to the remainder of the
estate which was positive by 0.2%.
The remaining stores are the basis for a resilient and
profitable Drycleaning business. There are now sufficient
GreenEarth(R) drycleaning machines available within the business to
ensure that all locations will operate using the environmentally
friendly process in the near future. Preparation for the relocation
of the head office is underway and once completed, will provide the
opportunity for significant cost savings going forward.
A new store was opened in Notting Hill under the Jeeves of
Belgravia brand and the trading performance of this store is
progressing to plan, whilst the two new openings of 2011 make
steady progress.
Our consumables business, Alex Reid, has felt the impact of the
wider economic factors with overall sales slightly lower than
2011.
DIVISIONAL PERFORMANCE - FACILITIES MANAGEMENT
The FM division comprises SGP together with six Special Purpose
Companies, with responsibility for PFI contracts, in the Healthcare
and Education Sectors.
SGP provides smart property and facilities management solutions.
The services include the full range from commercial agency and
property management, to rating and service charge management,
building services, energy management, planned and reactive
maintenance and on site FM. SGP's flexible delivery model ensures
that customers receive a tailored service unique to their
requirements.
The revenue of the Division (excluding customer recharges) has
increased by approximately 11% when compared to the first half of
2011 to GBP19.7 million (H1 2011: GBP17.7 million) whilst revenue
including recharges was some 18% higher at GBP25.3 million (H1
2011: GBP21.4 million).
In the first half of 2012 nearly 59% of Divisional revenue,
before costs recharged to customers, was derived from long term PFI
contracts which generally have remaining terms in excess of 15
years with total revenue from these contracts increasing by almost
7%. There are now 21 such contracts within this increasingly
valuable portfolio of business.
Adjusted operating profit at GBP2.0 million remains unchanged
from that of the first half of 2011. Whilst there has been an
increase in profits in the Education and Corporate sectors, this
has been offset by the reduction in project work undertaken by
clients within the Retail sector.
The acquisition in February 2012 of the business and assets of
Nickleby and Co is already delivering results. The integration of
the Nickleby business into SGP is largely completed and for the
first half of 2012 has added GBP1.6 million to revenue, excluding
customer recharges. This acquisition has also enabled us to
strengthen our core capabilities in IT and Procurement/Supply Chain
and will enable us to continue to deliver market leading activity
in these key areas.
Contracts won within the first half of 2012 are currently being
mobilised and will be operational and contributing in the second
half. The increasing strength of our potential new business
pipeline is encouraging.
During early 2012 we updated the "look and feel" of the SGP
brand which can now be seen on the new website and better reflects
the current identity of SGP.
The continued success in delivering for our customers has again
been recognised within the FM industry. SGP was awarded the
Partnerships Bulletin Award for "Best Facilities Provider 2012" for
the second consecutive year. We are also delighted to be finalists
in the upcoming PFM Awards, to be held in November 2012, in the
"Partners in Education" category.
Staff
I would like to thank employees at all levels for their
continuing support and commitment to the Group.
Outlook
I am pleased with the overall performance of the Group in the
first half of the year, despite the challenging market conditions
affecting each of our Divisions.
Our Textile Rental business has had a strong first half year and
I am particularly pleased with the acquisition of Cannon which adds
further scale to our operations. The success and speed of the
integration of the acquired contracts means that we should see a
significant improvement in the result for the second half.
The Drycleaning business had a difficult first half. However, as
identified in the strategic review, we are confident that we have a
viable, profitable and resilient core Drycleaning business. The
actions being taken to reduce the number of loss making stores and
combining the business into a larger Textile Services division will
provide the basis for a stable platform with increasing
profitability expected in future years.
SGP is starting to realise the anticipated benefits from the
recent acquisition and should deliver an improved performance in
the second half.
We are confident that the Group will perform well in the second
half as the benefits of the acquisitions and restructuring are
realised.
John Talbot
Executive Chairman
4th September 2012
Responsibility Statement
The condensed consolidated interim financial statements comply
with the Disclosure and Transparency Rules ('DTR') of the United
Kingdom's Financial Services Authority in respect of the
requirement to produce a half-yearly financial report. The interim
report is the responsibility of, and has been approved by, the
Directors.
The Directors confirm that to the best of their knowledge:
-- this financial information has been prepared in accordance
with IAS 34 as adopted by the European Union;
-- this interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first half and description of principal risks and
uncertainties for the remaining half of the year); and
-- this interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related party
transactions and changes therein).
The Directors of Johnson Service Group PLC are listed in the
Johnson Service Group PLC Annual Report for 2011. There have been
no changes since 31st December 2011 other than the resignation of
Mr Paul Ogle with effect from 4th July 2012.
Details of current Directors are available on the Johnson
Service Group PLC website: www.johnsonplc.com
By order of the Board
Yvonne Monaghan
Finance Director
4th September 2012
On behalf of the Board
Consolidated Income Statement
Half year Half year
to to Year ended
30th June 30th June 31st December
2012 2011 2011
Note GBPm GBPm GBPm
CONTINUING OPERATIONS:
REVENUE 2 126.3 117.3 242.3
Costs recharged to customers (5.6) (3.7) (8.8)
------------------------------------------------ ---- ---------- ---------- --------------
Revenue excluding costs recharged to
customers 120.7 113.6 233.5
------------------------------------------------ ---- ---------- ---------- --------------
OPERATING PROFIT 2 2.6 7.1 17.5
OPERATING PROFIT BEFORE INTANGIBLES AMORTISATION
AND IMPAIRMENT (EXCLUDING SOFTWARE AMORTISATION)
AND EXCEPTIONAL ITEMS 7.7 8.4 18.5
Amortisation and impairment of intangible
assets (excluding software amortisation) (1.4) (1.3) (2.6)
Exceptional items 3
- Restructuring costs (2.7) - -
- Costs in relation to business acquisition
activity (0.7) - -
- Pension costs and credits (0.3) - 1.6
OPERATING PROFIT 2 2.6 7.1 17.5
Ordinary finance cost
- Finance cost (1.7) (2.4) (4.4)
- Finance income - 0.1 0.2
- Notional interest - 0.4 0.7
------------------------------------------------ ---- ---------- ---------- --------------
(1.7) (1.9) (3.5)
Exceptional finance cost - - (0.3)
------------------------------------------------ ---- ---------- ---------- --------------
Net finance cost (1.7) (1.9) (3.8)
PROFIT BEFORE TAXATION 0.9 5.2 13.7
Taxation 4 0.4 (1.3) (3.4)
Profit for the period from continuing
operations 1.3 3.9 10.3
DISCONTINUED OPERATIONS:
Profit for the period from discontinued
operations 10 2.9 - -
PROFIT FOR THE PERIOD ATTRIBUTABLE TO
EQUITY HOLDERS 4.2 3.9 10.3
------------------------------------------------ ---- ---------- ---------- --------------
EARNINGS PER SHARE * 6
Basic earnings per share
From continuing operations 0.5p 1.5p 4.1p
From discontinued operations 1.2p - -
------------------------------------------------ ---- ---------- ---------- --------------
From continuing and discontinued operations 1.7p 1.5p 4.1p
------------------------------------------------ ---- ---------- ---------- --------------
Fully diluted earnings per share
From continuing operations 0.5p 1.4p 3.8p
From discontinued operations 1.1p - -
------------------------------------------------ ---- ---------- ---------- --------------
From continuing and discontinued operations 1.6p 1.4p 3.8p
------------------------------------------------ ---- ---------- ---------- --------------
* Earnings per share before intangibles amortisation and
impairment (excluding software amortisation), exceptional items and
exceptional finance costs are shown in Note 6.
The notes on pages 14 to 26 form an integral part of these
condensed consolidated interim financial statements.
Consolidated Statement of Comprehensive Income
Half year Half year Year ended
to to 30th 31st December
30th June June 2011
2012 2011
Note GBPm GBPm GBPm
Profit For The Period 4.2 3.9 10.3
---------------------------------------------- ---- ------------- -------------------------- ---------------------
Other Comprehensive Income
Actuarial gain / (loss) on defined benefit
pension plans 8 0.9 10.0 (7.8)
Taxation in respect of actuarial (gain)
/ loss (0.2) (2.6) 1.9
Change in deferred tax due to change in
tax rate (0.2) (0.2) (0.3)
Cash flow hedges
(net of taxation) - fair value of losses (0.4) (0.2) (0.6)
- transfer to interest 0.3 0.3 0.6
--------------------------------------------- ---- ------------- -------------------------- ---------------------
Other Comprehensive Income For The Period 0.4 7.3 (6.2)
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 4.6 11.2 4.1
---------------------------------------------- ---- ------------- -------------------------- ---------------------
Consolidated Statement of Changes in Shareholders' Equity
Share Share Other Retained Total
Capital Premium Reserves Earnings Equity
GBPm GBPm GBPm GBPm GBPm
Balance at 1st January 2011 25.0 13.7 1.1 30.7 70.5
Total comprehensive income
for the period - - 0.1 11.1 11.2
Share options (value of employee
services) - - - 0.4 0.4
Issue of Share capital 0.1 - - - 0.1
Dividends paid - - - (1.4) (1.4)
Balance at 30th June 2011 25.1 13.7 1.2 40.8 80.8
---------------------------------- --------- --------- ---------- ---------- --------
Total comprehensive income
for the period - - (0.1) (7.0) (7.1)
Share options (value of employee
services) - - - 0.4 0.4
Issue of Share capital 0.3 0.1 - - 0.4
Dividends paid - - - (0.8) (0.8)
---------------------------------- --------- --------- ---------- ---------- --------
Balance at 31st December 2011 25.4 13.8 1.1 33.4 73.7
---------------------------------- --------- --------- ---------- ---------- --------
Total comprehensive income
for the period - - (0.1) 4.7 4.6
Share options (value of employee
services) - - - 0.4 0.4
Issue of Share capital 0.2 0.1 - - 0.3
Dividends paid - - - (1.7) (1.7)
---------------------------------- --------- --------- ---------- ---------- --------
Balance at 30th June 2012 25.6 13.9 1.0 36.8 77.3
---------------------------------- --------- --------- ---------- ---------- --------
Consolidated Balance Sheet
As at As at As at
30th June 30th June 31st December
2012 2011 2011
Note GBPm GBPm GBPm
ASSETS
NON-CURRENT ASSETS
Goodwill 87.6 87.6 87.6
Intangible assets 11.3 9.2 7.8
Property, plant and equipment 43.1 43.1 42.8
Textile rental items 26.6 21.6 23.2
Trade and other receivables 0.9 0.6 0.8
Deferred income tax assets 6.5 3.4 6.8
176.0 165.5 169.0
---------------------------------------------- ----- ---------- ---------- --------------
CURRENT ASSETS
Inventories 4.0 3.9 4.3
Trade and other receivables 46.2 39.2 38.6
Cash and cash equivalents 1.9 5.1 5.7
52.1 48.2 48.6
---------------------------------------------- ----- ---------- ---------- --------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 56.5 48.5 46.6
Current income tax liabilities 2.7 7.7 5.7
Borrowings 11 4.9 2.7 2.7
Derivative financial liabilities 0.5 - -
Provisions 3.4 4.7 4.2
---------------------------------------------- ----- ---------- ---------- --------------
68.0 63.6 59.2
---------------------------------------------- ----- ---------- ---------- --------------
NET CURRENT LIABILITIES (15.9) (15.4) (10.6)
---------------------------------------------- ----- ---------- ---------- --------------
NON-CURRENT LIABILITIES
Retirement benefit obligations 8 18.3 5.7 20.2
Deferred income tax liabilities 1.1 1.0 1.4
Other non-current liabilities 2.1 2.0 2.1
Borrowings 11 52.9 51.5 51.4
Derivative financial liabilities 1.1 1.4 1.4
Provisions 7.3 7.7 8.2
82.8 69.3 84.7
---------------------------------------------- ----- ---------- ---------- --------------
NET ASSETS 77.3 80.8 73.7
---------------------------------------------- ----- ---------- ---------- --------------
EQUITY
CAPITAL AND RESERVES ATTRIBUTABLE TO THE COMPANY'S
EQUITY HOLDERS
Called up share capital 25.6 25.1 25.4
Share premium 13.9 13.7 13.8
Other reserves 1.0 1.2 1.1
Retained earnings 36.8 40.8 33.4
---------------------------------------------- ----- ---------- ---------- --------------
TOTAL EQUITY 77.3 80.8 73.7
---------------------------------------------- ----- ---------- ---------- --------------
The notes on pages 14 to 26 form an integral part of these
condensed consolidated interim financial statements. The condensed
consolidated interim financial statements on pages 10 to 26 were
approved by the Board of Directors on 4th September 2012 and signed
on its behalf by:
Yvonne Monaghan
Finance Director
Consolidated Statement of Cash Flows
Half year Half year Year ended
to to 31st December
30th June 30th June 2011
2012 2011
Note GBPm GBPm GBPm
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the period 4.2 3.9 10.3
Adjustments for:
Income
tax - continuing operations 4 (0.4) 1.3 3.4
- discontinued operations 10 (3.0) - (2.0)
Finance income and expense 1.7 1.9 3.8
Depreciation and impairment 11.5 9.8 20.5
Amortisation of intangible assets 1.6 1.4 2.9
Decrease / (increase) in inventories 0.3 (0.3) (0.6)
Increase in trade and other receivables (7.7) (3.7) (3.3)
Increase in trade and other payables 8.7 2.8 2.2
Profit on sale of property, plant and
equipment - (0.2) (0.1)
Acquisition fees charged to income statement 0.7 - -
Additional contribution to defined benefit
pension schemes (1.0) (0.5) (1.5)
Share-based payments 0.4 0.4 0.8
Retirement benefit obligations 0.1 (0.2) (2.2)
Provisions (1.7) (1.6) (1.6)
--------------------------------------------------- ---- ---------- ---------------------- --------------
Cash generated from operations 15.4 15.0 32.6
Interest paid (3.0) (1.8) (3.4)
Taxation received - 5.8 5.1
--------------------------------------------------- ---- ---------- ---------------------- --------------
Net cash generated from operating activities 12.4 19.0 34.3
--------------------------------------------------- ---- ---------- ---------------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of business (net of cash acquired) 10 (7.2) (0.2) (0.2)
Purchase of property, plant and equipment (3.4) (1.9) (5.3)
Proceeds from sale of property, plant
and equipment - 0.3 0.3
Purchase of intangible assets (0.2) (0.1) (0.2)
Purchase of textile rental items (9.7) (7.5) (18.5)
Proceeds from sale of textile rental items 1.1 1.0 2.0
Interest received - 0.1 0.2
Net cash used in investing activities (19.4) (8.3) (21.7)
--------------------------------------------------- ---- ---------- ---------------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 9.5 2.5 2.5
Repayments of borrowings (4.0) (5.0) (6.5)
Capital element of finance leases (0.2) (0.4) (0.7)
Net proceeds from issue of Ordinary shares 0.3 0.1 0.5
Dividends paid to company Shareholders (1.7) (1.4) (2.2)
Net cash generated from / (used in) financing
activities 3.9 (4.2) (6.4)
--------------------------------------------------- ---- ---------- ---------------------- --------------
Net (decrease) / increase in cash and
cash equivalents (3.1) 6.5 6.2
Cash and cash equivalents at beginning
of period 4.8 (1.4) (1.4)
Cash and cash equivalents at end of period 12 1.7 5.1 4.8
--------------------------------------------------- ---- ---------- ---------------------- --------------
The notes on pages 14 to 26 form an integral part of these
condensed consolidated interim financial statements.
Notes to the Condensed Consolidated Interim Financial
Statements
Johnson Service Group PLC ('the Company') and its subsidiaries
(together 'the Group') provide a unique range of managed services,
operating in two principal areas: textile related services and
facilities management.
The Company is incorporated and domiciled in the UK. The
Company's registered number is 523335. The address of its
registered office is Johnson House, Abbots Park, Monks Way, Preston
Brook, Cheshire, WA7 3GH. The Company has its primary listing on
the London Stock Exchange, with its shares traded on AIM.
The condensed consolidated interim financial statements were
approved for issue by the Board on 4th September 2012.
1 BASIS OF PREPARATION
These condensed consolidated interim financial statements of
Johnson Service Group PLC are for the six months ended 30th June
2012. They have been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and with IAS
34, 'Interim Financial Reporting', as adopted by the European
Union.
The condensed consolidated interim financial statements have not
been reviewed or audited, nor do they comprise statutory accounts
for the purpose of Section 434 of the Companies Act 2006, and do
not include all of the information or disclosures required in the
annual financial statements and should therefore be read in
conjunction with the Group's 2011 consolidated financial
statements, which have been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union.
Financial information for the year ended 31st December 2011
included herein is derived from the statutory accounts for that
year, which have been filed with the Registrar of Companies. The
auditors' report on those accounts was unqualified, did not contain
an emphasis of matter paragraph and did not contain a statement
under Section 498 of the Companies Act 2006.
Financial information for the half year ended 30th June 2011
included herein is derived from the condensed consolidated interim
financial statements for that period.
Going Concern
Current economic conditions create uncertainty over the level of
demand for the Group's products and services, the price of raw
materials and fuel and the exchange rate between Sterling, the US
dollar and the Euro and thus the consequence for the cost of
foreign supplies.
The Group currently has adequate financial resources together
with long-term contracts with a number of customers and suppliers
across different geographic areas and industries. The Group's
forecasts and projections, taking account of reasonably possible
changes in trading performance, show that there is not a
substantial doubt that the Group should be able to operate within
the level of its current facilities.
After due consideration, the Directors confirm that they have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the Group's financial statements.
2 SEGMENT ANALYSIS
Segment information is presented in respect of the Group's
business segments, which are based on the Group's management and
internal reporting structure as at 30th June 2012. Details of the
Group's segments were provided on page 57 of the 2011 Annual
Report.
The chief operating decision-maker has been identified as the
Board of Directors (the Board). The Board reviews the Group's
internal reporting in order to assess performance and allocate
resources. Management has determined the operating segments based
on these reports and on the internal reporting structure.
The Board assesses the performance of the operating segments
based on a measure of earnings before interest and tax, both
including and excluding the effects of non-recurring items from the
operating segments, such as restructuring costs and impairments
when the impairment is the result of an isolated, non-recurring
event. Interest income and expenditure are not included in the
result for each operating segment that is reviewed by the Board.
Segment results include items directly attributable to a segment as
well as those that can be allocated on a reasonable basis, for
example, rental income received by the property company is credited
back to the paying company for the purposes of segmental
reporting.
Other information provided to the Board is measured in a manner
consistent with that in the financial statements. Segmental assets
exclude deferred tax assets, current tax assets and cash, all of
which are managed on a central basis. Segmental liabilities include
non-bank borrowings, but exclude deferred tax liabilities, current
tax liabilities, bank borrowings, derivative financial liabilities
and retirement benefit obligations that cannot be attributed
directly to a segment, all of which are managed on a central basis.
These balances are part of the reconciliation to total balance
sheet assets and liabilities.
Inter-segment pricing is determined on an arm's length basis.
The exceptional items have been included within the appropriate
business segment as shown on pages 15 to 17.
The business segment results for the half year ended 30th June
2012, together with comparative figures, are as follows:
2 SEGMENT ANALYSIS (continued)
Half year ended 30th June Textile Facilities All Other
2012 Rental Drycleaning Management Segments Total
GBPm GBPm GBPm GBPm GBPm
REVENUE
Revenue 64.0 37.0 25.5 - 126.5
Inter-segment revenue - - (0.2) - (0.2)
------------------------------------------------ ------ -------- ------------ ------------ ---------- --------
TOTAL REVENUE 64.0 37.0 25.3 - 126.3
REVENUE EXCLUDING COSTS
RECHARGED TO CUSTOMERS
Revenue 64.0 37.0 19.9 - 120.9
Inter-segment revenue - - (0.2) - (0.2)
------------------------------------------------ ------ -------- ------------ ------------ ---------- --------
TOTAL REVENUE EXCLUDING
COSTS
RECHARGED TO CUSTOMERS 64.0 37.0 19.7 - 120.7
------------------------------------------------ ------ -------- ------------ ------------ ---------- --------
RESULT
OPERATING PROFIT BEFORE INTANGIBLES
AMORTISATION AND IMPAIRMENT (EXCLUDING
SOFTWARE AMORTISATION) AND EXCEPTIONAL
ITEMS 7.7 (0.2) 2.0 (1.8) 7.7
Amortisation and impairment
of intangible assets (0.3) - (1.1) - (1.4)
Exceptional Items:
- Restructuring costs (1.2) - (1.5) - (2.7)
- Costs in relation to
business acquisition activity (0.4) - (0.3) - (0.7)
- Pension costs and credits - - - (0.3) (0.3)
OPERATING PROFIT 5.8 (0.2) (0.9) (2.1) 2.6
Ordinary finance cost (1.7)
Profit before taxation 0.9
Taxation 0.4
------------------------------------------------ ------ -------- ------------ ------------ ---------- --------
Profit for the period - from
continuing operations 1.3
Profit for the period - from
discontinued operations 2.9
-------------------------------------------------------- -------- ------------ ------------ ---------- --------
Profit for the period 4.2
-------------------------------------------------------- -------- ------------ ------------ ---------- --------
Discontinued Textile Facilities All Other
Operations Rental Drycleaning Management Segments Total
GBPm GBPm GBPm GBPm GBPm GBPm
OTHER INFORMATION
Fixed asset additions
- Property, plant and equipment - 2.6 0.9 0.2 - 3.7
- Textile rental items - 10.9 - - - 10.9
- Intangible software - - - 0.1 - 0.1
Depreciation and amortisation
expense
- Property, plant and equipment - 1.9 1.3 0.2 0.1 3.5
- Textile rental items - 8.0 - - - 8.0
- Intangible software - - 0.1 0.1 - 0.2
BALANCE SHEET INFORMATION
Segment assets 0.1 120.1 37.7 50.8 11.0 219.7
Unallocated assets: Deferred
income tax assets 6.5
Cash and cash
equivalents 1.9
------------------------------------------------ ------ -------- ------------ ------------ ---------- --------
Total assets 228.1
------------------------------------------------ ------ -------- ------------ ------------ ---------- --------
Segment liabilities (2.1) (34.4) (16.0) (12.5) (4.5) (69.5)
Unallocated liabilities:
Bank borrowings (56.8)
Deferred income tax liabilities (1.1)
Current income tax
liabilities (2.7)
Derivative financial
liabilities (1.6)
Retirement benefit
obligations (19.1)
-------------------------------------------------------- -------- ------------ ------------ ---------- --------
Total liabilities (150.8)
------------------------------------------------ ------ -------- ------------ ------------ ---------- --------
RETURN ON CAPITAL EMPLOYED (rolling
12 months) 39.6% 8.8% 238.5%
2 SEGMENT ANALYSIS (continued)
Half year ended 30th June Textile Facilities All Other
2011 Rental Drycleaning Management Segments Total
GBPm GBPm GBPm GBPm GBPm
REVENUE
Revenue 58.0 37.9 21.6 - 117.5
Inter-segment revenue - - (0.2) - (0.2)
----------------------------------------------- ------- ---------- ------------ ------------ ---------- --------
TOTAL REVENUE 58.0 37.9 21.4 - 117.3
REVENUE EXCLUDING COSTS
RECHARGED TO CUSTOMERS
Revenue 58.0 37.9 17.9 - 113.8
Inter-segment revenue - - (0.2) - (0.2)
----------------------------------------------- ------- ---------- ------------ ------------ ---------- --------
TOTAL REVENUE EXCLUDING
COSTS
RECHARGED TO CUSTOMERS 58.0 37.9 17.7 - 113.6
----------------------------------------------- ------- ---------- ------------ ------------ ---------- --------
RESULT
OPERATING PROFIT BEFORE INTANGIBLES
AMORTISATION AND IMPAIRMENT (EXCLUDING
SOFTWARE AMORTISATION) AND EXCEPTIONAL
ITEMS 7.7 0.6 2.0 (1.9) 8.4
Amortisation and impairment
of intangible assets (0.3) - (1.0) - (1.3)
OPERATING PROFIT / (LOSS) 7.4 0.6 1.0 (1.9) 7.1
Ordinary finance cost (1.9)
Profit before taxation 5.2
Taxation (1.3)
----------------------------------------------- ------- ---------- ------------ ------------ ---------- --------
Profit for the period 3.9
----------------------------------------------- ------- ---------- ------------ ------------ ---------- --------
Discontinued Textile Facilities All Other
Operations Rental Drycleaning Management Segments Total
GBPm GBPm GBPm GBPm GBPm GBPm
OTHER INFORMATION
Fixed asset additions
- Property, plant and equipment - 0.8 1.1 0.2 - 2.1
- Textile rental items - 9.2 - - - 9.2
- Intangible software - - - 0.1 - 0.1
Depreciation and amortisation
expense
- Property, plant and equipment - 1.9 1.3 0.2 0.1 3.5
- Textile rental items - 6.3 - - - 6.3
- Intangible software - - - 0.1 - 0.1
BALANCE SHEET INFORMATION
Segment assets 0.2 105.7 38.9 50.5 9.9 205.2
Unallocated assets: Deferred
income tax assets 3.4
Cash and cash
equivalents 5.1
----------------------------------------------- ------- ---------- ------------ ------------ ---------- --------
Total assets 213.7
----------------------------------------------- ------- ---------- ------------ ------------ ---------- --------
Segment liabilities (0.5) (28.7) (18.5) (10.7) (5.4) (63.8)
Unallocated liabilities:
Bank borrowings (52.8)
Deferred income tax liabilities (1.0)
Current income tax
liabilities (7.7)
Derivative financial
liabilities (1.4)
Retirement benefit
obligations (6.2)
-------------------------------------------------------- ---------- ------------ ------------ ---------- --------
Total liabilities (132.9)
----------------------------------------------- ------- ---------- ------------ ------------ ---------- --------
RETURN ON CAPITAL EMPLOYED (rolling
12 months) 44.2% 15.7% 133.4%
2 SEGMENT ANALYSIS (continued)
Year ended 31st December Textile Facilities All Other
2011 Rental Drycleaning Management Segments Total
GBPm GBPm GBPm GBPm GBPm
REVENUE
Revenue 118.2 77.3 47.4 - 242.9
Inter-segment revenue - - (0.6) - (0.6)
------------------------------------------------------- ---- -------- ------------ ------------ ---------- --------
TOTAL REVENUE 118.2 77.3 46.8 - 242.3
REVENUE EXCLUDING COSTS
RECHARGED TO CUSTOMERS
Revenue 118.2 77.3 38.6 - 234.1
Inter-segment revenue - - (0.6) - (0.6)
------------------------------------------------------- ---- -------- ------------ ------------ ---------- --------
TOTAL REVENUE EXCLUDING COSTS
RECHARGED TO CUSTOMERS 118.2 77.3 38.0 - 233.5
------------------------------------------------------- ---- -------- ------------ ------------ ---------- --------
RESULT
OPERATING PROFIT BEFORE INTANGIBLES
AMORTISATION AND IMPAIRMENT (EXCLUDING
SOFTWARE AMORTISATION) AND EXCEPTIONAL
ITEMS 15.9 2.0 4.1 (3.5) 18.5
Amortisation and impairment
of intangible assets (0.5) - (2.1) - (2.6)
Exceptional items
- Pension costs and credits - - - 1.6 1.6
OPERATING PROFIT / (LOSS) 15.4 2.0 2.0 (1.9) 17.5
Ordinary finance cost (3.5)
Exceptional finance cost (0.3)
-------------------------------------------------------- --- -------- ------------ ------------ ---------- --------
Profit before taxation 13.7
Taxation (3.4)
-------------------------------------------------------- --- -------- ------------ ------------ ---------- --------
Profit for the period 10.3
-------------------------------------------------------- --- -------- ------------ ------------ ---------- --------
Discontinued Textile Facilities All Other
Operations Rental Drycleaning Management Segments Total
GBPm GBPm GBPm GBPm GBPm GBPm
OTHER INFORMATION
Fixed asset additions
- Property, plant and equipment - 2.5 2.6 0.6 - 5.7
- Textile rental items - 18.9 - - - 18.9
- Intangible software - - - 0.2 - 0.2
Depreciation and amortisation
expense
- Property, plant and equipment - 4.0 2.5 0.4 0.2 7.1
- Textile rental items - 13.4 - - - 13.4
- Intangible software - - 0.1 0.2 - 0.3
BALANCE SHEET INFORMATION
Segment assets 0.1 105.5 38.3 49.2 120 205.1
Unallocated assets: Deferred
income tax assets 6.8
Cash and cash
equivalents 5.7
--------------------------------------------------- -------- -------- ------------ ------------ ---------- --------
Total assets 217.6
--------------------------------------------------- -------- -------- ------------ ------------ ---------- --------
Segment liabilities (2.2) (26.5) (16.3) (11.0) (5.7) (61.7)
Unallocated liabilities: Bank
borrowings (52.9)
Deferred income tax
liabilities (1.4)
Current income
tax
liabilities (5.7)
Derivative
financial
liabilities (1.4)
Retirement benefit
obligations (20.8)
------------------------------------------------------------- -------- ------------ ------------ ---------- --------
Total liabilities (143.9)
--------------------------------------------------- -------- -------- ------------ ------------ ---------- --------
RETURN ON CAPITAL EMPLOYED (rolling
12 months) 40.6% 14.4% 266.9%
3 EXCEPTIONAL ITEMS
Half Half year Year ended
year to to 31st
30th June 30th June December
2012 2011 2011
GBPm GBPm GBPm
Restructuring costs - Textile Rental (1.2) - -
- Facilities Management (1.5) - -
(2.7) - -
Costs in relation to business acquisition
activity (0.7) - -
Pension costs and credits (0.3) - 1.6
Total exceptional items (3.7) - 1.6
-------------------------------------------------------- ------------ ----------- -----------
Current year exceptional items
Restructuring costs - Textile Rental
Following the acquisition of the business and specified garment,
linen, mat and towel contracts and related assets of Cannon Textile
Care (Cannon), the Textile Rental business reorganised its
management and support structures such that they were better
aligned to the combined business needs going forward. Furthermore,
redundancy costs have been recognised in the period to reflect the
planned closure at certain of the Cannon sites acquired as a result
of the majority of trade being transferred to existing plants
within the Textile Rental business.
Although these costs were directly as a result of the
acquisition they have not been classified as 'costs in relation to
business acquisition activity' as they more closely fit the
definition of 'restructuring costs'.
Restructuring costs - Facilities Management
Following the acquisition of the business of Nickleby & Co
Limited, the Facilities Management division reorganised its
management and support structures such that they were better
aligned to the combined business needs going forward.
Although these costs were directly as a result of the
acquisition they have not been classified as 'costs in relation to
business acquisition activity' as they more closely fit the
definition of 'restructuring costs'.
Costs in relation to business acquisition activity
IFRS 3 (revised), 'Business combinations', is effective for
reporting periods beginning on or after 1st July 2009. The revised
standard requires all acquisition related costs (e.g. professional
fees) to be expensed to the Income Statement. With effect from 1st
January 2010, the Group has classified fees and expenses incurred
on business acquisition activities as exceptional.
During the period, fees and expenses have been incurred in
relation to business acquisition activity.
Fees totalling GBP0.4 million were incurred in relation to the
acquisition of the business and specified garment, linen, mat and
towel contracts and related assets of Cannon Textile Care and fees
totalling GBP0.3 million were incurred in relation to the
acquisition of the Nickleby business.
Further details on business acquisitions are shown in note
10.
Pension costs and credits
During the period an enhanced partial or full transfer value
exercise was offered to those members of the Johnson Group Staff
Pension Scheme whose scheme pension was in excess of the minimum
income requirement. 23 members were offered the enhancement; three
accepted, resulting in an exceptional cost of GBP0.3 million
(including fees) which has been included as a settlement loss.
Prior year exceptional items
Pension costs and credits
The statutory change for the indexation of certain future
benefits has been implemented. The impact of the change from RPI to
CPI was recognised in the 2011 income statement as a past service
credit of GBP2.2 million.
The Company had offered enhanced terms to certain categories of
deferred members who chose to transfer their benefits out of the
Johnson Group Staff Pension Scheme by increasing the transfer value
that would normally be payable by the Scheme Trustee. The 2011
exercise was rolled out to deferred members aged under 50 years
old. 532 members were offered the enhancement, and 110 accepted,
equating to some 35% take up by liability for this group of
members. This resulted in an exceptional cost of GBP0.6 million
(including fees and employer's national insurance) and has been
included as a settlement loss.
4 TAXATION
Half year Half year Year ended
to to 31st December
30th June 30th June 2011
2012 2011
GBPm GBPm GBPm
Current tax - continuing operations
UK corporation tax charge for the period 0.7 1.4 2.7
Adjustment in relation to previous periods (0.7) (0.1) (0.6)
-------------------------------------------- ----------- ----------- ---------------
Current tax charge for the period - 1.3 2.1
Deferred tax - continuing operations
Origination and reversal of temporary
differences (0.4) - 1.4
Adjustment in relation to previous periods - - (0.1)
Deferred tax (credit) / charge for the
period (0.4) - 1.3
-------------------------------------------- ----------- ----------- ---------------
Total taxation (credit) / charge for
continuing operations (0.4) 1.3 3.4
-------------------------------------------- ----------- ----------- ---------------
Tax relief on intangibles amortisation has reduced the taxation
charge in the current period by GBP0.3 million (half year ended
30th June 2011: GBP0.3 million reduction in the charge; year ended
31st December 2011: GBP0.6 million reduction in the charge). Tax
relief on exceptional items has reduced the taxation charge in the
current period by GBP0.9 million (half year ended 30th June 2011:
no exceptional items; year ended 31st December 2011: increased tax
charge by GBP0.3 million).
Changes in the UK corporation tax rate
The 2012 Budget announced that the UK corporation tax rate will
reduce to 22% over a period of 3 years from 2012.
The first reduction in the UK corporation tax rate from 26% to
24% was substantively enacted on 26th March 2012 (effective from
1st April 2012). Whilst the reduction will have no effect on
current tax assets and liabilities which arose prior to the
effective date of change, there are implications for deferred tax
accounting. The effect of this rate change has been reflected in
the above deferred taxation credit.
The second reduction in the UK corporation tax rate to 23% with
effect from 1st April 2013 was substantively enacted on 3rd July
2012. As this legislation had not been substantively enacted at the
balance sheet date the effect has not been included in these
financial statements, however, the future rate reduction is not
expected to have a material effect on the deferred tax provision of
the Group.
The third reduction to 22% is expected to be enacted through the
2013 Finance Act.
The above changes will result in a weighted average rate of
24.5% for 2012 (2011: 26.5%), 23.25% for 2013 and 22.25% for
2014.
Reconciliation of effective tax rate
Taxation on non-exceptional items for the six months to 30th
June 2012 is calculated based on the estimated average annual
effective tax rate (excluding prior year items) of 25.9% (half year
ended 30th June 2011: 25.6%; year ended 31st December 2011:
24.6%).
This compares to the tax rate expected to be enacted or
substantively enacted at the annual balance sheet date of 24.0%
(half year ended 30th June 2011: 26.0%; year ended 31st December
2011: 26.0%).
Taxation on exceptional items is calculated based on the actual
tax charge or credit for each specific item.
Differences between the estimated average annual effective tax
rate and statutory rate include, but are not limited to, the effect
of non-deductible expenses and the effect of tax losses utilised.
The adjustment for under / over provisions in previous years is
recognised when the amounts are agreed.
5 ADJUSTED PROFIT BEFORE AND AFTER TAXATION
Half year Half year Year ended
to to 31st December
30th June 30th June 2011
2012 2011
GBPm GBPm GBPm
Profit before taxation (continuing activities) 0.9 5.2 13.7
Intangibles amortisation and impairment
(excluding software amortisation) 1.4 1.3 2.6
Restructuring costs 2.7 - -
Costs in relation to business acquisition
activity 0.7 - -
Pension costs and credits 0.3 - (1.6)
Exceptional finance cost in respect
of bank fees - - 0.3
Adjusted profit before taxation 6.0 6.5 15.0
Taxation on adjusted profit before taxation (0.8) (1.6) (3.7)
------------------------------------------------ ----------- ----------- ---------------
Adjusted profit after taxation attributable
to continuing operations 5.2 4.9 11.3
------------------------------------------------ ----------- ----------- ---------------
6 EARNINGS PER SHARE
Half Half year Year ended
year to 31st December
to 30th June 2011
30th 2011
June
2012
GBPm GBPm GBPm
Profit for the period from continuing operations
attributable to Ordinary Shareholders 1.3 3.9 10.3
Profit for the period from discontinued operations
attributable to Ordinary Shareholders 2.9 - -
Intangibles amortisation from continuing
operations (excluding software) (net of taxation) 1.1 1.0 2.0
Exceptional items from continuing operations
(net of taxation) 2.8 - (1.2)
Exceptional items from discontinued operations
(net of taxation) (2.9) - -
Exceptional finance costs from continuing
operations (net of taxation) - - 0.2
---------------------------------------------------- ------------ ------------ ---------------
Adjusted profit attributable to Ordinary
Shareholders 5.2 4.9 11.3
---------------------------------------------------- ------------ ------------ ---------------
Number Number Number
of shares of shares of shares
Weighted average number of Ordinary shares 253,614,135 249,214,647 249,834,780
Potentially dilutive options * 18,444,284 21,628,279 20,998,433
---------------------------------------------------- ------------ ------------ ---------------
Fully diluted number of Ordinary shares 272,058,419 270,842,926 270,833,213
---------------------------------------------------- ------------ ------------ ---------------
Pence Pence Pence
Basic earnings per share per share per share per share
---------------------------------------------------- ------------ ------------ ---------------
From continuing operations 0.5p 1.5p 4.1p
From discontinued operations 1.2p - -
---------------------------------------------------- ------------ ------------ ---------------
From continuing and discontinued operations 1.7p 1.5p 4.1p
Adjustment for intangibles amortisation 0.4p 0.4p 0.8p
Adjustment for exceptional items (continuing
operations) 1.1p - (0.5p)
Adjustment for exceptional items (discontinued
operations) (1.2p) - -
Adjustment for exceptional finance costs - - 0.1p
---------------------------------------------------- ------------ ------------ ---------------
Adjusted basic earnings per share (continuing
operations) 2.0p 1.9p 4.5p
Adjusted basic earnings per share (discontinued
operations) - - -
---------------------------------------------------- ------------ ------------ ---------------
Adjusted basic earnings per share (continuing
and discontinued operations) 2.0p 1.9p 4.5p
---------------------------------------------------- ------------ ------------ ---------------
Diluted earnings per share
---------------------------------------------------- ------------ ------------ ---------------
From continuing operations 0.5p 1.4p 3.8p
From discontinued operations 1.1p - -
---------------------------------------------------- ------------ ------------ ---------------
From continuing and discontinued operations 1.6p 1.4p 3.8p
---------------------------------------------------- ------------ ------------ ---------------
Adjustment for intangibles amortisation 0.4p 0.4p 0.7p
Adjustment for exceptional items (continuing
operations) 1.0p - (0.4p)
Adjustment for exceptional items (discontinued
operations) (1.1p) - -
Adjustment for exceptional finance costs - - 0.1p
---------------------------------------------------- ------------ ------------ ---------------
Adjusted basic earnings per share (continuing
operations) 1.9p 1.8p 4.2p
Adjusted basic earnings per share (discontinued
operations) - - -
---------------------------------------------------- ------------ ------------ ---------------
Adjusted basic earnings per share (continuing
and discontinued operations) 1.9p 1.8p 4.2p
---------------------------------------------------- ------------ ------------ ---------------
* Includes outstanding share options granted to employees and
warrants issued to the Company's banks.
Basic earnings per share is calculated using the weighted
average number of shares in issue during the period, excluding
those held by the ESOP, based on the profit for the period
attributable to Ordinary Shareholders.
Adjusted earnings per share figures are given to exclude the
effects of intangibles amortisation and impairment (excluding
software amortisation), exceptional items and exceptional finance
costs, all net of taxation, and are considered to show the
underlying results of the Group.
For diluted earnings per share, the weighted average number of
Ordinary shares in issue is adjusted to assume conversion of all
potential dilutive Ordinary shares. The Company has potential
dilutive Ordinary shares arising from share options granted to
employees where the exercise price is less than the average market
price of the Company's Ordinary shares during the period and
warrants issued to the Company's banks.
Potential dilutive Ordinary shares are dilutive at the profit
from continuing operations level when their conversion to Ordinary
shares would decrease earnings per share from continuing
operations. In all periods the potential dilutive Ordinary shares
are dilutive, as their inclusion in the diluted basic earnings per
share calculation decreases earnings per share from continuing
operations.
There were no material events occurring after the balance sheet
date that would have changed significantly the number of Ordinary
shares or potential dilutive Ordinary shares outstanding at the
balance sheet date, if those transactions had occurred before the
end of the reporting period.
7 DIVIDENDS
Half year Half year Year ended
to to 31st December
30th June 30th June 2011
2012 2011
Dividend per share (pence)
2012 Interim dividend proposed 0.36 - -
2011 Interim dividend proposed and paid - 0.33 0.33
2011 Final dividend proposed and paid - - 0.67
----------------------------------------- ----------- ----------- ---------------
0.36 0.33 1.00
----------------------------------------- ----------- ----------- ---------------
Half year Half year Year ended
to to 31st December
30th June 30th June 2011
2012 2011
GBPm GBPm GBPm
Shareholders' funds utilised (GBPm)
2012 Interim dividend proposed 0.9 - -
2011 Interim dividend proposed and paid - 0.8 0.8
2011 Final dividend proposed and paid - - 1.7
On 18th May 2012, a final dividend of 0.67 pence per Ordinary
share in respect of 2011 was paid to Shareholders, utilising GBP1.7
million of Shareholders' funds.
The Directors are proposing an interim dividend in respect of
the year ended 31st December 2012 of 0.36 pence which will reduce
Shareholders' funds by GBP0.9 million. The dividend will be paid on
9th November 2012 to Shareholders on the register of members at the
close of business on 12th October 2012. The Trustee of the ESOP has
waived the entitlement to receive dividends on the Ordinary shares
held by the Trust.
In accordance with International Financial Reporting Standards,
these condensed consolidated interim financial statements do not
reflect a liability in respect of the proposed interim
dividend.
8 RETIREMENT BENEFIT OBLIGATIONS
The Group has applied the requirements of IAS 19, 'Employee
Benefits' to its employee pension schemes and post-retirement
healthcare benefits.
As part of the Group's objective to reduce its overall pension
liability, and in accordance with the Schedule of Contributions,
additional contributions of GBP0.8 million were paid by the Group
to the Johnson Group Staff Pension Scheme (JGSPS) during the period
to 30th June 2012 (half year ended 30th June 2011: GBP0.2 million;
year ended 31st December 2011: GBP1.2 million). A further
contribution of GBP0.2 million was paid to the WML Final Salary
Pension Scheme in the period to 30th June 2012 (half year ended
30th June 2011: GBP0.3 million; year ended 31st December 2011:
GBP0.3 million).
Following discussions with the Group's appointed actuary it has
been identified that an actuarial gain of GBP0.9 million should be
recognised in the period to 30th June 2012. This is principally as
a result of a gain on the return on assets of GBP1.3 million offset
by a GBP0.4 million loss on assumption changes.
In addition, following on from previous initiatives undertaken
over the last three years the Group has, during the period,
undertaken an enhanced partial or full transfer value exercise with
the purpose of reducing the overall size of the JGSPS and therefore
the level of risk assumed. The exercise removed a further GBP1.5
million of liabilities from the JGSPS, utilising GBP1.7 million of
assets, which resulted in a settlement loss of GBP0.2 million.
This, together with related costs of GBP0.1 million is shown as an
exceptional item (see note 3). Further actions are underway in
order to continue the de-risking programme.
The gross retirement benefit liability and associated deferred
tax asset thereon, together with the net liability is shown
below:
As at As at As at
30th June 30th June 31st December
2012 2011 2011
GBPm GBPm GBPm
Gross retirement benefit liability (18.3) (5.7) (20.2)
Deferred tax asset thereon 4.4 1.5 5.0
------------------------------------ ----------- ----------- ---------------
Net retirement benefit liability (13.9) (4.2) (15.2)
------------------------------------ ----------- ----------- ---------------
8 RETIREMENT BENEFIT OBLIGATIONS (continued)
The reconciliation of the opening gross retirement benefit
liability to the closing gross retirement benefit liability is
shown below:
As at As at As at
30th June 30th June 31st December
2012 2011 2011
GBPm GBPm GBPm
Opening gross retirement benefit liability 20.2 16.8 16.8
Current service cost 0.3 0.3 0.5
Past service gain - - (2.2)
Settlement loss 0.2 - 0.2
Notional interest - (0.4) (0.7)
Employer contributions (1.3) (0.8) (2.1)
Actuarial (gain) / loss (0.9) (10.0) 7.8
Utilisation of healthcare provision (0.2) (0.2) (0.1)
-------------------------------------------- ----------- ----------- ---------------
Closing gross retirement benefit liability 18.3 5.7 20.2
-------------------------------------------- ----------- ----------- ---------------
The IASB has published an amendment to IAS 19, 'Employee
benefits' which, subject to EU endorsement, will be effective for
financial reporting periods beginning on or after 1st January 2013.
Comparative information will need to be restated.
The changes mean that the Group will recognise a higher notional
interest expense in the Income Statement as we will no longer be
able to take credit for anticipated investment out-performance of
equities above corporate bonds.
Had the amended standard been effective and/or adopted in 2012,
the additional notional interest charge to the Income Statement at
30th June would have been GBP0.5 million and the full year
incremental charge would have been GBP1.0 million, as opposed to
the existing charge in 2012 of GBPnil. Note that this is a non-cash
charge and does not impact on scheme funding.
9 CAPITAL EXPENDITURE AND COMMITMENTS
CAPITAL EXPENDITURE
In the six months ended 30th June 2012 the Group acquired
property, plant and equipment and intangible assets with a net book
value of GBP3.8 million (half year ended 30th June 2011: GBP2.2
million; year ended 31st December 2011: GBP5.9 million), not
including property, plant and equipment and intangible assets
acquired through business combinations. In addition, textile rental
items with a net book value of GBP10.9 million were acquired during
the period (half year ended 30th June 2011: GBP9.2 million; year
ended 31st December 2011: GBP18.9 million), not including textile
rental items acquired through business combinations.
Property, plant and equipment and intangible assets with a net
book value of nil were disposed of during the period (half year
ended 30th June 2011: GBP0.1 million; year ended 31st December
2011: GBP0.2 million). In addition, textile rental items with a net
book value of GBP1.1 million were disposed of during the period
(half year ended 30th June 2011: GBP1.0 million; year ended 31st
December 2011: GBP2.0 million).
CAPITAL COMMITMENTS
Orders placed for future capital expenditure contracted but not
provided for in the financial statements are shown below:
As at As at As at
30th June 30th June 31st December
2012 2011 2011
GBPm GBPm GBPm
Property, plant and equipment 1.0 0.8 1.4
------------------------------- ----------- ----------- ---------------
10 BUSINESS COMBINATIONS AND DISPOSALS
BUSINESS COMBINATIONS
On 14th February 2012 the Group acquired the business of
Nickleby & Co Limited for an initial cost of GBP0.9 million
plus fees. Of the consideration of GBP0.9 million, GBP0.2 million
was paid in July 2012. Since acquisition the business acquired has
not generated a profit on revenue of GBP1.6 million. Had the
business been acquired at the start of the period it is estimated
that no profit would have been generated on revenue of GBP2.1
million.
The initial fair value of assets and liabilities acquired are as
follows:
Initial
Accounting Fair value
Net assets Fair value policy of assets
acquired adjustments realignment acquired
GBPm GBPm GBPm GBPm
Intangible assets - Customer
lists and contracts - 0.8 - 0.8
Intangible assets - Software - - 0.1 0.1
- 0.8 0.1 0.9
------------------------------------------- ------------- ------------- ------------
On 31st March 2012 the Group acquired the Cannon Textile Care
(Cannon) business from OCS Group Limited for a cost of GBP5.9
million plus fees. Since acquisition the business acquired has
generated a loss of GBP0.4 million on revenue of GBP3.6 million.
Had the business been acquired at the start of the period it is
estimated that profits of GBP0.1 million would have been generated
on revenue of GBP6.9 million.
The initial fair value of assets and liabilities acquired are as
follows:
Initial
Accounting Fair value
Net assets Fair value Policy of assets
acquired adjustments Realignment acquired
GBPm GBPm GBPm GBPm
Intangible assets - Customer
lists and contracts - 4.0 - 4.0
Property plant and equipment 0.3 - - 0.3
Rental stock items in circulation 1.6 - - 1.6
1.9 4.0 - 5.9
----------------------------------- ----------- ------------- ------------- ------------
Both acquisitions have had a relatively short period of
ownership and these amounts may therefore be subject to
adjustment.
During the year to 31st December 2011 there were no business
combinations. Payments totalling GBP0.2 million were made during
that period relating to acquisition costs incurred during the
previous year.
The cash flows in relation to business acquisition activity are
summarised below:
Half year Half year Year to
to to 31st December
30th June 30th June 2011
2012 2011
GBPm GBPm GBPm
Consideration for Cannon business 5.9 - -
Fees paid in relation to Cannon business
acquisition 0.3 - -
Consideration for Nickleby business 0.7 - -
Fees paid in relation to Nickleby business
acquisition 0.3 - -
Prior period acquisition fees - 0.2 0.2
7.2 0.2 0.2
-------------------------------------------- ----------- ----------- ---------------
DISPOSALS
There have been no business disposals in the six months to 30th
June 2012 or in the year to 31st December 2011.
10 BUSINESS COMBINATIONS AND DISPOSALS (continued)
DISCONTINUED OPERATIONS
During 2011 a tax repayment of GBP5.0 million was received from
HMRC relating to the disposal of the Corporatewear division in
2008, pending finalisation of tax computations. GBP1.5 million of
this was recognised in the year to 31st December 2011. The tax
computations have now been finalised resulting in a payment back to
HMRC of GBP0.5 million which was paid in July 2012. The balance of
GBP3.0 million has been recognised as a credit to the Income
Statement in the current period within Discontinued Operations.
Professional fees of GBP0.1 million incurred in connection with
this matter have also been recongnised as arising from discontinued
operations.
During 2011 GBP2.0 million of additional provisions were
recognised relating to future lease commitments on properties
previously used in operations which are discontinued. If not
provided these costs would have been incurred in future years. A
tax credit of GBP0.5 million was recognised in relation to this
provision together with the credit of GBP1.5 million referred to
above.
Half year Half year Year to
to to 31st December
30th June 30th June 2011
2012 2011
GBPm GBPm GBPm
Loss before taxation from discontinued
operations (0.1) - (2.0)
Taxation 3.0 - 2.0
---------------------------------------- ----------- ----------- ---------------
Profit for the period 2.9 - -
---------------------------------------- ----------- ----------- ---------------
11 BORROWINGS
The Group has a banking facility under which bank loans are
secured and are drawn down under a committed facility initially
comprising of an amortising Term Loan of GBP53.5 million and a
Revolving Credit Facility, including an overdraft facility, of
GBP25.0 million of which GBP2.5 million matures in December 2013
with the remainder maturing in May 2015. Individual tranches are
drawn down, in sterling, for periods of up to six months at LIBOR
rates of interest prevailing at the time of drawdown, plus the
applicable margin which ranges from 2.5% to 3.0%.
As at 30th June 2012, the bank facilities available to the Group
were GBP78.5 million. The Term Loan will reduce by GBP1.5 million
on the 31st December 2012, by GBP1.5 million on the 30th June 2013
and by GBP3.0 million on the 31st December 2013 and at six monthly
intervals thereafter.
Bank loans are stated net of unamortised issue costs of GBP0.9
million (30th June 2011: GBP0.7 million; 31st December 2011:
GBPnil).
12 ANALYSIS OF NET DEBT
Cash Debt
Cash and cash due
and cash equivalents Debt after
equivalents Less (excluding due more
(including lifecycle lifecycle within than
lifecycle funds funds) one one Finance Total
funds) year year leases net debt
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance at 31st
December 2010 (1.4) (1.8) (3.2) (2.2) (52.7) (1.4) (59.5)
Cash flow 6.5 (0.1) 6.4 1.5 1.0 0.4 9.3
Other non-cash
changes - - - (1.6) 1.2 (0.4) (0.8)
----------------- ------------- ------------ ------------- ---------------- ------- -------- ----------
Balance at 30th
June 2011 5.1 (1.9) 3.2 (2.3) (50.5) (1.4) (51.0)
----------------- ------------- ------------ ------------- ---------------- ------- -------- ----------
Cash flow (0.3) 0.6 0.3 1.5 - 0.3 2.1
Other non-cash
changes - - - (0.7) - (0.1) (0.8)
----------------- ------------- ------------ ------------- ---------------- ------- -------- ----------
Balance at 31st
December 2011 4.8 (1.3) 3.5 (1.5) (50.5) (1.2) (49.7)
----------------- ------------- ------------ ------------- ---------------- ------- -------- ----------
Cash flow (3.1) (0.3) (3.4) (2.0) (3.5) 0.2 (8.7)
Other non-cash
changes - - - (1.0) 1.9 - 0.9
----------------- ------------- ------------ ------------- ---------------- ------- -------- ----------
Balance at 30th
June 2012 1.7 (1.6) 0.1 (4.5) (52.1) (1.0) (57.5)
----------------- ------------- ------------ ------------- ---------------- ------- -------- ----------
At 30th June 2012 cash and cash equivalents comprises a cash
balance of GBP1.9 million, and an overdraft of GBP0.2 million (30th
June 2011: GBP5.1 million of cash and no overdraft; 31st December
2011: GBP5.7 million of cash and an overdraft of GBP0.9 million).
The overdraft is included within Borrowings (Current Liabilities)
on the Balance Sheet.
13 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Half year Half Year ended
to year 31st December
30th June to 2011
2012 30th
June
2011
GBPm GBPm GBPm
(Decrease) / increase in cash in the
period (3.1) 6.5 6.2
Movement in Lifecycle funds (0.3) (0.1) 0.5
----------------------------------------- ----------- ------- ---------------
(Decrease) / increase in cash excluding
Lifecycle funds (3.4) 6.4 6.7
Cash (inflow) / outflow on change in
debt and lease financing (5.3) 2.9 4.7
----------------------------------------- ----------- ------- ---------------
Change in net debt resulting from cash
flows (8.7) 9.3 11.4
Movement in unamortised issue costs of
bank loans 0.9 (0.4) (1.1)
New finance leases - (0.4) (0.5)
Movement in net debt during the period (7.8) 8.5 9.8
Opening net debt (49.7) (59.5) (59.5)
----------------------------------------- ----------- ------- ---------------
Closing net debt (57.5) (51.0) (49.7)
----------------------------------------- ----------- ------- ---------------
14 RELATED PARTY TRANSACTIONS
Transactions during the year between the Company and its
subsidiaries, which are related parties, have been conducted on an
arm's length basis and eliminated on consolidation.
Full details of the Group's other related party relationships,
transactions and balances are given in the Group's financial
statements for the year ended 31st December 2011. There have been
no material changes in these relationships in the half year to 30th
June 2012 or up to the date of this report.
15 CONTINGENT LIABILITIES
The Group operates from a number of sites across the UK. Some of
the sites have operated as laundry and drycleaning sites for many
years and historic environmental liabilities may exist. Such
liabilities are not expected to give rise to any significant
loss.
The Group has granted its Bankers and Trustees of the Pension
Schemes security over the assets of the Group. Security for the
amount drawn under the Bank Facility Agreement ranks pari passu
with the GBP28.0 million security of the Pension Trustees.
At 30th June 2012 there were no other contingent liabilities
except for those arising from the ordinary course of the Group's
business.
16 EVENTS AFTER THE BALANCE SHEET DATE
On the 4th July 2012 the Group announced a review of the
Drycleaning business and the following recommendations of this
review are being implemented:
-- The combination of Drycleaning and Textile Rental into a
single Textile Services division. Benefits will include a unified
branding strategy, significant cost savings and greater
co-operation on sales opportunities.
-- The closure of approximately 100 underperforming branches by
the year end from the present portfolio of 460 with a corresponding
reduction in back office and field teams and a reduced requirement
for the warehousing and distribution of consumables.
-- A significant acceleration of dilapidation provisions which
will increase flexibility on lease renewal.
The estimated charge to the Income Statement for the planned
restructuring and property provisions relating to the Drycleaning
business amounts to an aggregate GBP23.9 million, which will be
treated as an exceptional item in the second half of 2012.
Of the estimated charge, GBP3.7 million is non-cash and only
GBP3.4 million is an additional cash requirement relating to the
restructuring cost, as the balance is already contractually
committed cash spend in the current and future years (including
rent, rates, insurance and dilapidations) irrespective of the
restructuring plan. Accordingly, the Board does not expect the cash
impact of the restructuring to affect the dividend policy or to
increase the level of Group borrowings significantly. In addition,
the Board is confident that there is adequate headroom with respect
to the terms of the bank facility and associated covenant
ratios.
The anticipated taxation credit in respect of the exceptional
cost above is estimated at GBP5.6 million. It is not expected that
any corporation tax payments in respect of 2012 earnings will be
made in the second half of this year or in the first half of
2013.
17 ACCOUNTING POLICIES
Except as described below, the condensed consolidated interim
financial statements have been prepared applying the accounting
policies, presentation and methods of computation applied by the
Group in the preparation of the published consolidated financial
statements for the year ended 31st December 2011.
(a) Taxation
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual earnings
before exceptional items. Taxation on exceptional items is accrued
as the exceptional items are recognised. Prior year adjustments in
respect of taxation are recognised when it becomes probable that
such adjustment is needed.
(b) Seasonality of operations
Seasonality or cyclicality could affect the Drycleaning business
and Stalbridge Linen Services, although the Directors do not
consider this seasonality or cyclicality to be significant in the
context of the consolidated interim financial statements.
(c) Standards and amendments to standards effective in 2012
New and amended standards and interpretations need to be adopted
in the first interim financial statements issued after their
effective date (or date of early adoption).
The following new standards, amendments to standards and
interpretations are mandatory for the first time for the financial
year beginning 1st January 2012, but have no material impact on the
Group:
-- Amendment to IAS 12, 'Income taxes' (subject to EU
endorsement)
-- Amendment to IFRS 1, 'First time adoption' (subject to EU
endorsement)
-- Amendment to IFRS 7, 'Financial instruments: Disclosures'
The following new standards, amendments to standards and
interpretations have been issued, but are not effective for the
financial year beginning 1st January 2012, and have not been early
adopted:
-- Amendment to IAS 1, 'Financial statement presentation'
-- Amendment to IAS 19, 'Employee benefits'
-- IFRS 9, 'Financial instruments'
-- IFRS 10, 'Consolidated financial statements'
-- IFRS 11, 'Joint arrangements'
-- IFRS 12, 'Disclosure of interests in other entities'
-- IFRS 13, 'Fair value measurement'
Other than in respect of the changes to IAS 19, 'Employee
benefits', the details of which are disclosed within note 8, the
expected impact of the proposed changes is still being assessed in
detail by management.
(d) Critical accounting estimates and assumptions
The preparation of the condensed consolidated interim financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
(e) Forward looking statements
Certain statements in this interim report are forward-looking.
The terms 'expect', 'should be', 'will be' and similar expressions
identify forward looking statements. Although the Board believes
that the expectations reflected in these forward-looking statements
are reasonable, such statements are subject to a number of risks
and uncertainties and actual results and events could differ
materially from those expressed or implied by these forward-looking
statements.
18 PRINCIPAL RISKS AND UNCERTAINTIES
The Group set out in its 2011 Annual Report and Financial
Statements the principal risks and uncertainties that could impact
its performance; these remain unchanged since the Annual Report was
published. The Group operates a structured risk management process,
which identifies and evaluates risks and uncertainties and reviews
mitigation activity.
The past six months have seen little change in financial market
conditions and therefore no overall improvement in the risk
environment. The Group has no exposure to sub-prime lending or
collateralised debt obligations. The Group has sufficient headroom
to enable it to conform to covenants on its existing borrowings and
has sufficient working capital and undrawn financing facilities to
service its operating activities.
The main area of potential risk and uncertainty on a short-term
forward-looking basis over the remainder of the financial year
centres on the sales and profit impact from economic conditions and
consumer demand, together with the impact of product cost pressures
and an associated level of customer price inflation. Other
potential risks and uncertainties around sales and/or profits
include competitor activity, energy prices, product supply and
other operational processes, product safety, business interruption,
infrastructure development, reliance on key personnel and the
regulatory environment.
Further details of the Principal Risks and Uncertainties facing
the Group were detailed on pages 18 & 19 of the 2011 Annual
Report.
19 PUBLISHED FINANCIAL STATEMENTS
As previously announced, there is no longer a requirement to
send out half-yearly reports to all Shareholders or to advertise
the content in a national newspaper.
In order to reduce costs, the Company has taken advantage of
this reporting regime and no longer publishes half-yearly reports
for individual circulation to Shareholders. Information that would
normally be included in a half-yearly report is made available on
the Company's website at www.johnsonplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UGUPABUPPGAW
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