Johnson looks to clean up in US

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The Independent Online
PROFITS before tax at Johnson Group Cleaners, the biggest dry cleaners in the US and UK, rose 20.5 per cent to pounds 18.2m despite the slow consumer recovery in both countries.

Terry Greer, chairman, said the slump had continued into 1994, though it was difficult to tell how much of this was due to bad weather in January and February. Operating profits of the dry cleaning businesses were flat at pounds 8.9m.

The group's workwear rental arm saw earlier signs of increased demand. Johnson supplies small to medium-sized businesses with uniforms and other items.

In the UK an acquisition early in 1993 contributed pounds 505m to increased sales, but turnover also grew in the continuing rental businesses in both markets. Operating profits rose 15.5 per cent to pounds 10.1m.

The group has equipped its workwear rental companies with specialist food industry garment processing areas to improve its market share.

Johnson also reorganised its US arm, appointing two new senior executives.

Its dry cleaning branches, formerly trading under a variety of names, will be known as Dryclean USA over the course of the next two years.

Mr Greer said the company's mission statement was 'to become the McDonald's of the dry- cleaning industry in the US'. The industry is fragmented and with only a 2 per cent market share, Johnson is the biggest company.

Johnson's gearing fell to 18 per cent at the end of December, and the company hopes to announce US textile rental acquisitions this year.

It would also buy similar businesses in the UK if the opportunity arose.

The group announced a share split to improve marketability. It increased the dividend to 27p from 25.7p in 1992. The shares ended 8p higher at 1,018p.