interim results for the 26 weeks ended 26 june 2004
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INTERIM RESULTSfor the 26 weeks ended 26 June 2004
S E R V I C E G R O U P P L C
2S E R V I C E G R O U P P L C
Interim Results – June 2004
“..very encouraged by the progress that we
have made..”
Introduction
Stuart Graham, CEO
3S E R V I C E G R O U P P L C
Financial Review
Mike Sutton, CFO
Interim Results – June 2004
4S E R V I C E G R O U P P L C
Interim Results – June 2004
2004 ACQUISITIONS
Acquisitions completed to June 2004
Cost £4.9 million
Annualised turnover £13 million
Acquisition completed July 2004
Cost up to £27.4 million
Annualised turnover £28 million
“..targeted acquisitions..
that offer attractive long term growth potential.”
5S E R V I C E G R O U P P L C
Interim Results - June 2004
TURNOVER
“..in line with expectations..”
6S E R V I C E G R O U P P L C
Interim Results - June 2004
PROFIT AND LOSS ACCOUNT
2004 £m
2003 £m
Change %
Adjusted operating profit1 14.0 13.4 4.5
Interest (1.9) (2.2)
Adjusted PBT2 12.1 11.2 8.0
Goodwill amortisation and exceptional items (3.2) (16.7)
PBT 8.9 (5.5)
Margin3 -continuing 11.1% 13.4%
1 Excludes goodwill amortisation2 Excludes goodwill amortisation and exceptional items3 Excludes goodwill amortisation, exceptional items and costs recharged to customers
Adjusted operating profit1
2004 £m
2003 £m
Continuing 14.0 12.9
Discontinued - 0.5
14.0 13.4
Goodwill amortisation and exceptional items
Amortisation of goodwill (3.2) (2.6)
Loss on disposal of CCG - (10.5)
Loss on disposal of NI - (3.6)
(3.2) (16.7)
7S E R V I C E G R O U P P L C
Interim Results - June 2004
EARNINGS PER SHARE (ADJUSTED)
2004 £m
2003 £m
Change %
Adjusted profit before taxation1 12.1 11.2 8.0
Taxation2 (3.6) (3.2)
Adjusted profit after taxation1,2 8.5 8.0
Number ordinary shares
(fully diluted)
58.3m
57.2m
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 items2 Excludes tax credit relating to agreement of specific non-recurring matters in
prior periods (2003)
“..invested in our established
businesses..”
8S E R V I C E G R O U P P L C
Interim Results - June 2004
SUMMARY BALANCE SHEET
June 2004
£m
Dec 2003*
£m Fixed Assets 174.7 175.4
Current assets 75.9 62.3
Current liabilities (77.1) (70.7)
Financing (net of cash) (43.7) (43.4)
Liabilities > 1 year (4.1) (3.8)
Provisions (17.3) (14.9)
NET ASSETS 108.4 104.9
Fixed assets
June 2004
£m
Dec 2003*
£m Intangible fixed assets 86.8 89.8
Tangible fixed assets
- property, plant & equipment
65.6
64.2
- rental items 22.3 21.4
174.7 175.4
Provisions Deferred tax 1.2 0.7
Pension contributions 1.8 2.0
Private healthcare 1.8 1.8
Property 10.2 8.2
Self insurance 2.3 2.2
17.3 14.9
* Restated
9S E R V I C E G R O U P P L C
Interim Results - June 2004
CASHFLOW AND NET DEBT
1 Excludes goodwill amortisation
2004 £m
2003 £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 equipment
4.4 5.4
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)
- disposals 2.3 2.5
(8.3) (9.0)
10S E R V I C E G R O U P P L C
Interim Results - June 2004
TEXTILE & HOSPITALITY SERVICES
2004 £m
2003 £m
Change %
Continuing
Turnover 65.1 60.2 8.1
Adjusted operating profit1 (7.9)
8.2 8.9
Margin1 12.6% 14.8%
1 Excludes goodwill amortisation
Segment includes:
Johnsons Apparelmaster, CCM, Stalbridge Linen Services, Johnson Hospitality Services
Turnover
52%
Textile & hospitality services
Adjusted operating
profit1
59%
11S E R V I C E G R O U P P L C
Interim Results - June 2004
DRYCLEANING
2004 £m
2003 £m
Change %
Continuing
Turnover 41.4 35.8 15.6
Adjusted operating profit1 12.5
4.5 4.0
Margin1 10.9% 11.2%
Segment includes:
Johnsons Cleaners (incl. Sketchley), Jeeves
1 Excludes goodwill amortisation
Turnover
33%
Adjusted operating
profit1
32%
Drycleaning
12S E R V I C E G R O U P P L C
Interim Results - June 2004
FACILITIES MANAGEMENT & SPECIALIST SUPPLIES
Turnover2
15%
Facilities management &specialist supplies
Adjusted operating
profit1
9%
Segment includes:
Johnson Workplace Management & Alex Reid
2004 £m
Continuing
Turnover2 19.2
Adjusted operating profit1
1.3
Margin1,2 6.8%
1 Excludes goodwill amortisation2 Excludes costs recharged to customers
13S E R V I C E G R O U P P L C
Interim Results - June 2004
INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
Timetable
Balance sheet
Income statement
Bank covenants
14S E R V I C E G R O U P P L C
Review and Outlook
Stuart Graham, CEO
Interim Results - June 2004
15S E R V I C E G R O U P P L C
Interim Results - June 2004
OVERVIEW
Targeted acquisitions
Stabilisation of Johnsons Apparelmaster
Expansion of drycleaning
Increased range of services
Strong market positions
“..considerable amount of
activity..over the last two years..”
16S E R V I C E G R O U P P L C
Interim Results - June 2004
DIVISIONAL STRATEGY AND PERFORMANCE
“..we continue to identify cost reductions..”
Johnsons Apparelmaster
– Continued wearer attrition
– Restructured sales team
– Cost reductions and production efficiency improvements
CCM
– Expanding product range
– Continued growth
17S E R V I C E G R O U P P L C
Interim Results - June 2004
DIVISIONAL STRATEGY AND PERFORMANCE
Stalbridge Linen Services
– Strong growth continued
– Quality and service
Johnson Hospitality Services
– Largest hospitality and event hire company
– HSS Event Hire acquisition
“..considerable success in
developing new accounts..”
“..the range of product..was expanded..”
18S E R V I C E G R O U P P L C
Johnsons Cleaners (incl. Sketchley)
– Market leader in UK with c620 branches
– 103 Sketchley branches acquired in May 2004
– 150 units converted to GreenEarth®
– Roll out of new EPOS commenced
– Increased presence in South East
Jeeves of Belgravia
– New store opened
– New shop design developed
Interim Results - June 2004
DIVISIONAL STRATEGY AND PERFORMANCE
“..encouraging sales increase that
reflected the quality and range of services..”
19S E R V I C E G R O U P P L C
Interim Results - June 2004
DIVISIONAL STRATEGY AND PERFORMANCE
“..we see considerable
growth potential..”
Dimensions Corporatewear
– Acquired July 2004
– Leading supplier of corporatewear
– Growing market
– Potential to enter Europe
20S E R V I C E G R O U P P L C
Interim Results - June 2004
DIVISIONAL STRATEGY AND PERFORMANCE
Johnson Workplace Management
– Strong organic growth
– Expanded range of service delivery
Alex Reid
– Launched GreenEarth ® to independent sector
– Enlarged product range
– New supply chain
“..continues to perform well..”
“..initial reaction very positive..”
21S E R V I C E G R O U P P L C
Interim Results - June 2004
OUTLOOK
Strategy of organic growth and selective acquisition
Continued investment in established businesses
Long term growth prospects
Reorganisation and integration
Summary
“..anticipate a satisfactory outcome
for the year..”
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