Johnson Service sells dry cleaning business

5th Jan 2017 07:59

(ShareCast News) - Johnson Service said on Thursday that full-year results from the continuing textile rental business are expected to be slightly ahead of current market views and announced the sale of its retail dry cleaning business - which includes Johnson Cleaners, Jeeves of Belgravia and its subsidiary Jeeves International - to Timpson Group for £8.25m on a debt free, cash free basis.In a pre-close update for the year ended 31 December 2016, the company said its performance has been driven by both organic growth, ahead of anticipated levels, and synergy benefits following recent acquisitions.As far as the acquisition is concerned, the initial proceeds of the disposal, net of transaction costs of some £0.5m, will be about £6.25m, with up to a further £1m of deferred consideration potentially receivable within 12 months of completion, dependent on the satisfaction of certain conditions.Johnson Service said the money will be used to pay an additional deficit contribution to the defined benefit pension scheme of £1.5m, with the balance used to reduce net debt. The disposal is expected to be modestly earnings dilutive in the short term, pending any re-investment of the proceeds into the Textile Rental activities.Chief executive officer Chris Sander said: "We continue to successfully implement our strategic growth plan, with the disposal of the Drycleaning business enabling us to focus our efforts on the ongoing expansion of our Textile Rental activities."At 0910 GMT, the shares were up 1.2% to 114.38p.