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
progress that we
have made..”
Introduction
Stuart Graham, CEO
2
SER V I C E G R O U P P L C
Interim Results – June 2004
Financial Review
Mike Sutton, CFO
3
SER V I C E G R O U P P L C
Interim Results – June 2004
2004 ACQUISITIONS
 Acquisitions completed to June 2004
“..targeted
acquisitions..
that offer
attractive long
term growth
potential.”
 Cost
£4.9 million
 Annualised turnover
£13 million
 Acquisition completed July 2004
 Cost
up to £27.4 million
 Annualised turnover
£28 million
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SER V I C E G R O U P P L C
Interim Results - June 2004
TURNOVER
“..in line with
expectations..”
5
SER V I C E G R O U P P L C
Interim Results - June 2004
PROFIT AND LOSS ACCOUNT
2004
£m
2003 Change
%
£m
Adjusted operating profit1
Interest
14.0
(1.9)
13.4
(2.2)
4.5
Adjusted PBT2
Goodwill amortisation
and exceptional items
12.1
11.2
8.0
(3.2)
(16.7)
8.9
(5.5)
11.1%
13.4%
Adjusted operating profit1
Continuing
2004
£m
2003
£m
14.0
12.9
-
0.5
14.0
13.4
Discontinued
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)
PBT
Margin3 -continuing
1 Excludes goodwill amortisation
2 Excludes goodwill amortisation and exceptional items
3 Excludes goodwill amortisation, exceptional items and costs recharged to customers
6
SER V I C E G R O U P P L C
Interim Results - June 2004
EARNINGS PER SHARE (ADJUSTED)
“..invested in our
established
businesses..”
2004
£m
2003 Change
£m
%
Adjusted profit before taxation1
Taxation2
12.1
(3.6)
11.2
(3.2)
Adjusted profit after taxation1,2
8.5
8.0
58.3m
57.2m
14.6p
4.2p
14.0p
4.0p
17.6p
Number ordinary shares
(fully diluted)
Adjusted EPS1,2
Interim dividend
Total dividend
1
2
8.0
4.3
5.0
Excludes goodwill amortisation and exceptional items
Excludes tax credit relating to agreement of specific non-recurring matters in
prior periods (2003)
7
SER V I C E G R O U P P L C
Interim Results - June 2004
SUMMARY BALANCE SHEET
June
2004
£m
86.8
Dec
2003*
£m
89.8
- 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
10.2
8.2
2.3
2.2
17.3
14.9
Fixed assets
Intangible fixed assets
June
Dec
2004 2003*
£m
£m
Tangible fixed assets
Property
Self insurance
Fixed Assets
Current assets
Current liabilities
Financing (net of cash)
Liabilities > 1 year
Provisions
NET ASSETS
174.7
75.9
(77.1)
(43.7)
(4.1)
(17.3)
108.4
175.4
62.3
(70.7)
(43.4)
(3.8)
(14.9)
104.9
* Restated
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SER V I C E G R O U P P L C
Interim Results - June 2004
CASHFLOW AND NET DEBT
2004
£m
2003
£m
Operating profit1
14.0
13.4
Depreciation
10.7
13.8
Working capital
(0.4)
(0.3)
0.3
1.3
(0.6)
(0.4)
24.0
27.8
Property, plant and
equipment
4.4
5.4
Rental items
6.3
8.4
10.7
13.8
(3.0)
(2.2)
1.0
0.9
- purchases
(8.6)
(10.2)
- disposals
2.3
2.5
(8.3)
(9.0)
Provisions
Other
Depreciation
Capital expenditure (net)
Property, plant and
equipment
- purchases
- disposals
Rental items
1 Excludes goodwill amortisation
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SER V I C E G R O U P P L C
Interim Results - June 2004
TEXTILE & HOSPITALITY SERVICES
Turnover
Segment includes:
Johnsons Apparelmaster, CCM, Stalbridge Linen
Services, Johnson Hospitality Services
52%
Textile & hospitality services
Continuing
Turnover
2004
£m
2003 Change
£m
%
65.1
60.2
8.1
8.2
8.9
(7.9)
Adjusted operating
Adjusted operating profit1
profit1
Margin1
12.6% 14.8%
59%
1 Excludes goodwill amortisation
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SER V I C E G R O U P P L C
Interim Results - June 2004
DRYCLEANING
Turnover
Segment includes:
Johnsons Cleaners (incl. Sketchley), Jeeves
33
%
Continuing
Turnover
2004
£m
2003 Change
£m
%
41.4
35.8
15.6
4.5
4.0
12.5
Drycleaning
Adjusted operating
profit1
32
%
Adjusted operating profit1
Margin1
10.9% 11.2%
1 Excludes goodwill amortisation
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SER V I C E G R O U P P L C
Interim Results - June 2004
FACILITIES MANAGEMENT & SPECIALIST SUPPLIES
Turnover2
Segment includes:
Johnson Workplace Management & Alex Reid
15
%
2004
£m
Facilities management &
specialist supplies
Continuing
Turnover2
19.2
Adjusted operating
profit1
Adjusted operating profit1
Margin1,2
9%
1.3
6.8%
1 Excludes goodwill amortisation
2 Excludes costs recharged to customers
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SER 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
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SER V I C E G R O U P P L C
Interim Results - June 2004
Review and Outlook
Stuart Graham, CEO
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SER V I C E G R O U P P L C
Interim Results - June 2004
OVERVIEW
 Targeted acquisitions
“..considerable
amount of
activity..over the
last two years..”
 Stabilisation of Johnsons Apparelmaster
 Expansion of drycleaning
 Increased range of services
 Strong market positions
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SER V I C E G R O U P P L C
Interim Results - June 2004
DIVISIONAL STRATEGY AND PERFORMANCE
 Johnsons Apparelmaster
– Continued wearer attrition
– Restructured sales team
“..we continue to
identify cost
reductions..”
– Cost reductions and production efficiency
improvements
 CCM
– Expanding product range
– Continued growth
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SER V I C E G R O U P P L C
Interim Results - June 2004
DIVISIONAL STRATEGY AND PERFORMANCE
 Stalbridge Linen Services
“..considerable
success in
developing new
accounts..”
– Strong growth continued
– Quality and service
 Johnson Hospitality Services
“..the range of
product..was
expanded..”
– Largest hospitality and event hire company
– HSS Event Hire acquisition
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SER V I C E G R O U P P L C
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
increase that
reflected the quality
and range of
services..”
– 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
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SER V I C E G R O U P P L C
Interim Results - June 2004
DIVISIONAL STRATEGY AND PERFORMANCE
 Dimensions Corporatewear
– Acquired July 2004
– Leading supplier of corporatewear
“..we see
considerable
growth potential..”
– Growing market
– Potential to enter Europe
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SER V I C E G R O U P P L C
Interim Results - June 2004
DIVISIONAL STRATEGY AND PERFORMANCE
 Johnson Workplace Management
“..continues to
perform well..”
– Strong organic growth
– Expanded range of service delivery
 Alex Reid
“..initial reaction very
positive..”
– Launched GreenEarth ® to independent sector
– Enlarged product range
– New supply chain
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SER V I C E G R O U P P L C
Interim Results - June 2004
OUTLOOK
 Strategy of organic growth and selective
acquisition
“..anticipate a
satisfactory outcome
for the year..”
 Continued investment in established businesses
 Long term growth prospects
 Reorganisation and integration
 Summary
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SER V I C E G R O U P P L C