UPDATE 1-Johnson Service profit falls 80 pct

LONDON, Sept 9 (Reuters) - First-half profit slumped 80 percent at Johnson Service Group (JSG.L) as tough trading conditions hit, but the drycleaning-to-clothes hire group said its annual performance would be satisfactory.

The group, which saw its shares collapse last year amid profit warnings and a failure to sell off certain parts of the business, reported pretax profit of 0.4 million pounds compared with 2.3 million pounds last year as revenue slumped 18 percent to 130.1 million pounds. The group restated that it would not pay a dividend for 2008.

The troubled group, which last month said it would raise up to 10 million pounds through an open offer of about 49.94 million shares at 20 pence each to prop up the business, said valid acceptances were received for 80 percent of the shares on offer.

"The group has good growth prospects over the medium-term and recommend purchases for what should be a substantial re-rating," Robert Morton, an Investec analyst said in a note. He added that the acceptances were "a very encouraging take-up in today's market".

Johnson waived its banking covenant at the end of last year but said it had reduced its total debt to 118.1 million pounds from 168.5 million at the start of 2008.

Johnson said its facilities management unit led the losses, with half-year revenue coming in 51.5 percent lower at 23.2 million pounds after a major client took their property management work in-house. Revenue at Stalbridge Linen Services, which supplies linen to the premium hotel, catering and corporate hospitality markets, slid 24.9 percent to 13.6 million pounds.

Revenue almost halved at Workplace Engineering, which provides electrical engineering and fit-out services, falling to 3.7 million pounds from 6.7 million pounds. Workwear laundering and rental business Johnsons Apparelmaster achieved revenue of 47.2 million pounds, 1.9 percent up on the same period last year.

Chief Executive John Talbot said the group's remaining divisions were market leading businesses and said he expected results for the current financial year to be satisfactory.

Johnson Service has underperformed the FTSA All Share Support Services Index .FTASX2790 by about 35 percent since the turn of the year.

Johnson has been trying to sell its three non-core units -- hotel supplier Stalbridge, Workplace Engineering and specialist dry cleaner Alex Reid -- for some time, but has not found buyers willing to pay a suitable price. (Reporting by Rhys Jones; Editing by Jon Loades-Carter)