Shares digital

by Dan Coatsworth

Hoping to draw a line under one of the company’s worst- ever trading years, directors snapped up shares in dry cleaner-to-textiles group Johnson Service following its recent full-year results. The chief executive, chairman, finance director and three non-execs bought a combined 983,552 shares at 21.16p each, equivalent to 1.7% of the business. This group action may appear to be a show of strength in Johnson Service but it’s a far cry from two years ago when the shares were trading comfortably above 400p.

The latest dealings mark the first time chief executive John Talbot has invested in the company. He spent £134,366 on 635,000 shares, netting a 1% stake in the business. He was appointed as interim CEO in December 2007, replacing Charles Skinner who lasted just six months in the job. Previous CEO Stuart Graham quit in November 2006 after a profit warning and failure to offload the dry cleaning business.

Chairman Simon Sherrard topped up his 40,000 stock holding with a further 236,294 shares, costing £50,000. Finance director Yvonne Monaghan bagged 20,000 shares for just over £4,200. Non-exec directors Michael Gatenby, Michael Del Mar and Baroness Wilcox bought 25,000, 20,000 and 47,258 shares respectively.

Johnson Service has been struggling for several years. Having failed to offload the dry cleaning arm, the linen rental division was hit by delayed invoicing and bad debts. Expansion plans didn’t work and it ended up having to renegotiate bank borrowings after its finances were put under pressure. The dividend was scrapped and plans made to move down from the main market to Aim. In April, Johnson Service agreed to sell its corporate clothing business for £82.5 million to help reduce debt.

Sherrard now says the remaining businesses, including facilities management, have strong enough market positions to help rehabilitate the group.