29th Jun 2005 07:00
Davis Service Group PLC29 June 2005 FOR IMMEDIATE RELEASE 29 June 2005 DAVIS SERVICE GROUP PRE-CLOSE TRADING STATEMENT The Board today announces the following update on current trading and outlook. Current Trading Textile Maintenance UK and Ireland Market conditions in the first half of 2005 remain broadly in line with thoseexperienced in the second half of 2004. While pricing and cost pressuresremain, volume growth has continued enabling us to further achieve operatingefficiencies. However, our first half operating margin is expected to beslightly below that achieved in the same period in 2004. We continue to takefurther action to maximise our performance. Continental Europe Again, there has been a continuation of the trends experienced in 2004.Management is focused on improving margins and has had further success inachieving operating efficiencies. Sales growth remains limited, a reflection ofthe economies we service and of our desire to continue to improve the margins ofour existing business. Elliott Group Limited - discontinued activity As previously announced on 25 May 2005, the Group sold its Elliott operationsfor total gross proceeds of £166 million. Elliott's results as reported in thatannouncement were disappointing. Elliott ceased to be consolidated in Davis'sresults from 25 May 2005. We expect to record a £60 million profit on thedisposal of Elliott in our interim results. Outlook Looking forward, we expect the trading trends for our ongoing textilemaintenance business to continue for the remainder of the current financial yearand we are confident of our financial and trading prospects for this period. Inthe medium term, we will continue to pursue growth opportunities across ourmarkets and, where appropriate, look to make targeted acquisitions. Receipt of cash from HSS Vendor Loan Notes We are pleased to report that we have received a payment of $15 million (£8million) against the US element of the vendor loan notes from the sale of theHSS tool hire business. This is a modest surplus to the provisioned levels. Refinancing We are pleased to announce that on 23 June we concluded the re-financing ofDavis's banking facilities by signing a £420 million Revolving Credit Facilitywith an initial term of 5 years with 8 banks on attractive commercial termsincluding a reduced margin rate compared to the current agreement. Intention to Return Capital to Shareholders Further details are expected to be announced towards the end of July. Wecurrently expect to hold an extraordinary general meeting to approve theproposed return of up to £150 million in mid August 2005, with the return takingplace shortly after the announcement of our 2005 interim results. Interim Results These are expected to be released on 25 August 2005. For further information contact: Davis Service Group Financial Dynamics Roger Dye Chief Executive Richard MountainKevin Quinn Finance Director Robert GurnerTelephone 020 7259 6663 Telephone 020 7269 7291 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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