3rd Mar 2014 10:05
LONDON (Alliance News) - Johnson Service Group PLC Monday said it swung to profit in 2013 and has acquired Bourne Services Group Ltd in a GBP26.5 million cash deal that adds to the company's textile rental business.
The acquisition of Bourne Services, a hotel linen provider based in Lincolnshire, will be partly funded by a placing of about 26.3 million new shares at 51 pence each. The shares equate to 10% of the company's existing issued shares and will raise GBP12.8 million net.
The company swung to a GBP12.2 million pretax profit in 2013, from a GBP15.3 million pretax loss in 2012, which after tax translated into a GBP9.8 million profit from continuing operations.
But after taking into account a GBP9.1 million loss from discontinued operations, relating to the disposal of its FM division in August 2013, Johnson made just GBP700,00 in profits for shareholders versus a GBP11.7 million loss in 2012.
Revenue from continuing operations fell to GBP193.6 million from GBP198.7 million in 2012, with a reduced number of drycleaning branches being only partly offset by an increase in revenue from textile rental. But the return to profitability came as restructuring costs, mostly related to the drycleaning business, fell to GBP1.2 million from GBP24.8 million in 2012.
On an adjusted basis, which strips out items such as exceptional items and finance costs, pretax profit rose by 25% to GBP13.4 million.
"The current year has started very positively and I am delighted with the acquisition of the Bourne linen business," John Talbot, executive chairman, said in a statement.
"This is a significant step in our plan to expand the range of services offered by our Textile Rental business. The new equity which part funds the acquisition maintains the strength and flexibility in our balance sheet which is important as we continue to look for further value enhancing acquisitions," Talbot said.
Johnson Service raised its full-year dividend to 1.21 pence from 1.10 pence, driven by the improvement in underlying adjusted profit before tax and the cash requirements for future expansion.
Johnson Service shares were Monday quoted at 52.02 pence, up 0.03%.
By Samuel Agini; [email protected]; @samuelagini
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