Announcing its results for 1999, the Johnson Service Group looks like meeting its key aims of being market leader in textile rental and consolidating its number one spot in drycleaning.

In the year ending 25 December 1999, pre-tax profits grew 11.6% to £25.6 million (excluding goodwill amortisation and exceptional items) and continuing operating profit (before goodwill amortisation) was up 14.9% to £25.7 million.

Chief Executive Richard Zerny, told LCN that an increase of 12.1% in fully diluted earnings per share and 11.2% growth in the total dividend was particularly good news.

The group is seeing improved margins in its British drycleaning business and further growth and improved margins in textile rental.

The acquisition of Semara Holdings Plc (formerly Sketchley Plc) for £103 million, marked a major step in the group’s textile rental market plans, and in particular the workwear sector where it now holds 22% of the UK market.

Mr Zerny said that the company would focus on expansion in workwear rental and integrate Semara into its business by taking out unnecessary costs. Savings would come from reducing corporate and divisional overheads and increased operational efficiency. The Semara deal has brought three additional strands to the business, CCM (garment sourcing), Dimensions Corporatewear and airline services. Mr Zerny said that all three were profitable and may remain within the group.

He also confirmed that the reorganisation of the company’s Irish textile rental business is well underway.

Turnover of Johnson’s drycleaning business fell by 1.3% to £72 million but profitability increased by 21.9% and margins improved to 11.1% reflecting the closure of unprofitable shops. Before the Semara deal, drycleaning accounted for 45% of the turnover and 30 % of the operating profit. In 1999, drycleaning generated over £7 million cash, helping to reduce the debt incurred in the purchase of Semara. Plans include expansion of the drive-in business, with 10 to 20 sites set to open this year.