Dry cleaning firm Johnson Service Group (JSG) is to delist from the Official List of the London Stock Exchange and instead trade on the Alternative Investment Market (AIM).

The decision was approved by shareholders at an EGM in London yesterday. The company expects to finish trading on the Official List on June 9, and begin trading on AIM the next day. JSG hopes that the change will save the company money due to the less burdensome regulatory requirements of the junior market.

A statement from JSG said: “The directors anticipate that as an AIM quoted company, recurring savings will be made by the company on its ongoing costs of administration and in effecting certain corporate transactions due to the less onerous regulations on AIM. “The directors believe that AIM has demonstrated that it can provide a liquid trading platform for shares.”. JSG will join locally-based companies Cains, NWF, Park Group and Proventec among nearly 1,700 AIM companies on the AIM.

James Dow, a corporate finance expert who runs his own corporate finance advisory firm, Dow Schofield Watts, in Warrington believes companies can benefit from the change.

“Companies move to be in more control of their own destiny,” he said. “The main reason is so the management can make decisions and move quicker. It’s quite a regular occurrence now, the period where people were suspicious of this move has passed.

“It’s a lighter regulatory touch, the reasons you have to go to shareholders is reduced and the amount of communication with shareholders is reduced, which makes it cheaper.

“You can also appeal to a different investor group, as there is the opportunity to defer tax.”

Last month, JSG agreed to sell its corporate clothing arm for £82.5m, to pay-off borrowings as it sought financial stability. Poor trading at its high street dry cleaners and linen rental businesses was compounded by the troubled installation of a new IT system.

JSG’s share price had plummeted from a high of 370.75p last June to 12.5p in mid- March, but has doubled in the last three weeks. Yesterday it closed down 6p, at 30p.

Source: Liverpool Daily Post.co.uk