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SER V I C E G R O U P P L C
INTERIM RESULTS
for the 26 weeks ended 26 June 2004
Interim Results – June 2004
“..very
encouraged by the Introduction
progress that we
have made..” Stuart Graham, CEO
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Interim Results – June 2004
Financial Review
Mike Sutton, CFO
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Interim Results – June 2004
2004 ACQUISITIONS
Acquisitions completed to June 2004
Cost £4.9 million
Annualised turnover £13 million
“..targeted
acquisitions..
that offer Acquisition completed July 2004
attractive long
Cost up to £27.4 million
term growth
potential.” Annualised turnover £28 million
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Interim Results - June 2004
TURNOVER
“..in line with
expectations..”
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Interim Results - June 2004
PROFIT AND LOSS ACCOUNT
Adjusted operating profit1 2004 2003 Change
2004 2003
£m £m £m £m %
Continuing 14.0 12.9
Discontinued - 0.5
14.0 13.4 Adjusted operating profit1 14.0 13.4 4.5
Interest (1.9) (2.2)
Goodwill amortisation and exceptional
items
Adjusted PBT2 12.1 11.2 8.0
Amortisation of goodwill (3.2) (2.6) Goodwill amortisation
Loss on disposal of CCG - (10.5) and exceptional items (3.2) (16.7)
Loss on disposal of NI - (3.6)
(3.2) (16.7)
PBT 8.9 (5.5)
Margin3 -continuing 11.1% 13.4%
1 Excludes goodwill amortisation
2 Excludes goodwill amortisation and exceptional items
3 Excludes goodwill amortisation, exceptional items and costs recharged to customers
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Interim Results - June 2004
EARNINGS PER SHARE (ADJUSTED)
2004 2003 Change
£m £m %
Adjusted profit before taxation1 12.1 11.2 8.0
Taxation2 (3.6) (3.2)
Adjusted profit after taxation1,2 8.5 8.0
“..invested in our
established Number ordinary shares
businesses..” 58.3m 57.2m
(fully diluted)
Adjusted EPS1,2 14.6p 14.0p 4.3
Interim dividend 4.2p 4.0p 5.0
Total dividend 17.6p
1 Excludes goodwill amortisation and exceptional items
2 Excludes tax credit relating to agreement of specific non-recurring matters in
prior periods (2003)
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Interim Results - June 2004
SUMMARY BALANCE SHEET
June Dec
June Dec
Fixed assets 2004
£m
2003*
£m
2004 2003*
Intangible fixed assets 86.8 89.8
£m £m
Tangible fixed assets
- property, plant &
equipment 65.6 64.2 Fixed Assets 174.7 175.4
- rental items 22.3 21.4
174.7 175.4
Current assets 75.9 62.3
Provisions
Current liabilities (77.1) (70.7)
Deferred tax 1.2 0.7
Pension contributions 1.8 2.0
Financing (net of cash) (43.7) (43.4)
Private healthcare 1.8 1.8 Liabilities > 1 year (4.1) (3.8)
Property 10.2 8.2
Provisions (17.3) (14.9)
Self insurance 2.3 2.2
NET ASSETS 108.4 104.9
17.3 14.9
* Restated
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Interim Results - June 2004
CASHFLOW AND NET DEBT
2004 2003
£m £m
Operating profit1 14.0 13.4
Depreciation 10.7 13.8
Working capital (0.4) (0.3)
Provisions 0.3 1.3
Other (0.6) (0.4)
24.0 27.8
Depreciation
Property, plant and 4.4 5.4
equipment
Rental items 6.3 8.4
10.7 13.8
Capital expenditure (net)
Property, plant and
equipment
- purchases (3.0) (2.2)
- disposals 1.0 0.9
Rental items
- purchases (8.6) (10.2) 1 Excludes goodwill amortisation
- disposals 2.3 2.5
(8.3) (9.0)
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Interim Results - June 2004
TEXTILE & HOSPITALITY SERVICES
Turnover
Segment includes:
Johnsons Apparelmaster, CCM, Stalbridge Linen
Services, Johnson Hospitality Services
52%
2004 2003 Change
£m £m %
Continuing
Textile & hospitality services Turnover 65.1 60.2 8.1
Adjusted operating
profit1 Adjusted operating profit1 8.2 8.9 (7.9)
Margin1 12.6% 14.8%
59%
1 Excludes goodwill amortisation
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Interim Results - June 2004
DRYCLEANING
Turnover Segment includes:
Johnsons Cleaners (incl. Sketchley), Jeeves
2004 2003 Change
33 £m £m %
%
Continuing
Turnover 41.4 35.8 15.6
Drycleaning
Adjusted operating
Adjusted operating profit1 4.5 4.0 12.5
profit1
32
Margin1 10.9% 11.2%
%
1 Excludes goodwill amortisation
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Interim Results - June 2004
FACILITIES MANAGEMENT & SPECIALIST SUPPLIES
Turnover2
Segment includes:
Johnson Workplace Management & Alex Reid
15 2004
%
£m
Continuing
Facilities management & Turnover2 19.2
specialist supplies
Adjusted operating
profit1 Adjusted operating profit1 1.3
Margin1,2 6.8%
1 Excludes goodwill amortisation
2 Excludes costs recharged to customers
9%
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Interim Results - June 2004
INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
Timetable
Balance sheet
Income statement
Bank covenants
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Interim Results - June 2004
Review and Outlook
Stuart Graham, CEO
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Interim Results - June 2004
OVERVIEW
Targeted acquisitions
“..considerable Stabilisation of Johnsons Apparelmaster
amount of
activity..over the
last two years..” Expansion of drycleaning
Increased range of services
Strong market positions
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Interim Results - June 2004
DIVISIONAL STRATEGY AND PERFORMANCE
Johnsons Apparelmaster
– Continued wearer attrition
– Restructured sales team
– Cost reductions and production efficiency
“..we continue to
improvements
identify cost
reductions..”
CCM
– Expanding product range
– Continued growth
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Interim Results - June 2004
DIVISIONAL STRATEGY AND PERFORMANCE
Stalbridge Linen Services
“..considerable – Strong growth continued
success in
developing new – Quality and service
accounts..”
Johnson Hospitality Services
“..the range of
– Largest hospitality and event hire company
product..was
expanded..” – HSS Event Hire acquisition
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Interim Results - June 2004
DIVISIONAL STRATEGY AND PERFORMANCE
Johnsons Cleaners (incl. Sketchley)
– Market leader in UK with c620 branches
– 103 Sketchley branches acquired in May 2004
“..encouraging sales – 150 units converted to GreenEarth®
increase that
reflected the quality – Roll out of new EPOS commenced
and range of
– Increased presence in South East
services..”
Jeeves of Belgravia
– New store opened
– New shop design developed
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Interim Results - June 2004
DIVISIONAL STRATEGY AND PERFORMANCE
Dimensions Corporatewear
– Acquired July 2004
– Leading supplier of corporatewear
“..we see – Growing market
considerable
growth potential..” – Potential to enter Europe
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Interim Results - June 2004
DIVISIONAL STRATEGY AND PERFORMANCE
Johnson Workplace Management
“..continues to – Strong organic growth
perform well..”
– Expanded range of service delivery
Alex Reid
“..initial reaction very – Launched GreenEarth ® to independent sector
positive..”
– Enlarged product range
– New supply chain
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Interim Results - June 2004
OUTLOOK
Strategy of organic growth and selective
acquisition
“..anticipate a Continued investment in established businesses
satisfactory outcome
for the year..” Long term growth prospects
Reorganisation and integration
Summary
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