Half Yearly Report

RNS Number : 2392V

Leeds Group PLC

10 January 2012

 



LEEDS GROUP PLC

Interim Results for the six months ended 30 November 2011

STATEMENT BY THE GROUP CHAIRMAN, KATHRYN DAVENPORT

I am pleased to report that Leeds Group plc ("the Group") made a profit after tax of £481,000 in the six month period ended 30^th November 2011, compared with £124,000 in the corresponding period of last year and £483,000 in the eight months ended 31 May 2011. Earnings per share increased to 1.68 pence (2010: 0.43 pence) reflecting the increased profit and the reduced number of shares in issue.

Revenue at Hemmers Europe, the Group's German based operating subsidiary, was £13,908,000 (2010: £13,986,000).  Sales volumes were 20% down on last year as a result of generally depressed levels of consumer spending and the high price of cotton goods, which has in the last few months begun to fall back closer to the levels before the extraordinary surge in the commodity price that began some fifteen months ago. We increased our fabric sales prices to preserve satisfactory rates of margin and this has resulted in revenue in line with that of the corresponding period of last year. This, together with reductions in distribution costs and other overhead expense, led to a profit before tax for Hemmers Europe of £706,000 (2010: £267,000). Of this profit improvement of £439,000, £329,000 was attributable to the change in the necessary IFRS adjustment on the marking to market of financial derivatives.

Total metres sold in the period by ChinohTex, the Chinese subsidiary of Hemmers, increased by 34% over the corresponding period last year, and in terms of RMB external and internal sales revenues grew by 22% and 38% respectively. Although profitability at ChinohTex remains modest it performs invaluable work to assist the European operation through its purchasing strengths and product inspection prior to shipment. The directors remain satisfied with the progress being made in China.

Net asset value per share (excluding shares held in treasury) at 30 November 2011 was 45.7 pence (2010: 43.7 pence) inclusive of goodwill.  The seasonal growth in working capital of £841,000 was substantially lower than the previous year's figure of £1,577,000. The combination of profitable trading and excellent working capital control over the last twelve months has led to Group debt falling by £1,656,000 to £2,026,000 at 30 November 2011.

The Group continues to hold an investment in Dawson International Plc ("Dawson").  The Board noted the interim results for Dawson issued on 1 December 2011 showing profitable trading by the continuing operations and cash resources in excess of £5 million, but also showing a significant liability in two defined benefit pension schemes. The Leeds Group Board continues to believe that, subject to a satisfactory resolution of these pension issues, the current price of Dawson shares does not fully reflect its longer term value.

The Group lost a further appeal against the decision by Leeds City Council to classify the land owned by the Group at Haw Lane, Yeadon as a town or village green and is currently consulting its legal advisers to determine what further course of action may be open to have the land de-registered.

The Group has continued to use the authority granted to it to buy back shares into Treasury, although liquidity in Leeds Group shares has been limited and during the six month period, the Group purchased only 25,000 shares.  In line with previous decisions, the Board does not propose an interim dividend.

The economic environment remains challenging, despite the recent fall in the cost of cotton goods. There is no doubt that our customers are buying less fabric than usual this year, although we see no evidence that we are losing significant volumes of business to competitors. It remains to be seen whether order levels pick up as the year progresses.

As ever, thanks are due to staff throughout the Group for their unstinting efforts in the period covered by this report.

Kathryn Davenport

Chairman 

10 January 2012

Enquiries:
Leeds Group plc	Citigate Dewe Rogerson	Seymour Pierce Limited
Kathryn Davenport, Chairman	Fiona Tooley	Sarah Jacobs
Malcolm Wilson, Company Secretary	Tel: [phone] or 07785 703523	Tel: [phone]
Tel: [phone]

Unaudited Consolidated Statement of Comprehensive Income

for the 6 months ended 30 November 2011

	6 months to 30 November 2011 £000	6 months to 30 November 2010 £000	8 months to 31 May 2011 £000
Revenue	14,755	14,669	19,019
Cost of sales	(11,415)	(11,555)	(14,430)
Gross profit	3,340	3,114	4,589
Distribution costs	(1,009)	(1,082)	(1,408)
Administrative expenses	(1,564)	(1,620)	(2,277)
Profit from operations	767	412	904
Finance expense	(80)	(181)	(104)
Finance income	10	7	9
Profit before tax	697	238	809
Tax expense	(216)	(114)	(326)
Profit for the period, attributable to the equity holders of the Company	481	124	483
Other comprehensive income:
Translation differences on foreign operations	(183)	(119)	134
Unrealised (loss)/gain taken to available-for-sale reserve	(421)	(486)	162
Other comprehensive income for the period	(604)	(605)	296
Total comprehensive income for the period, attributable to the equity holders of the Company	(123)	(481)	779

 

The results shown in the income statement derive wholly from continuing operations.

There is no tax effect relating to other comprehensive income.

 

 

Earnings per share for profit attributable

to the equity holders of the Company

	6 months to 30 November 2011	6 months to 30 November 2010	8 months to 31 May 2011
Basic and diluted (pence)	1.68p	0.43p	1.67p

 

Unaudited Consolidated Balance Sheet

at 30 November 2011

	As at 30 November 2011 £000	As at 30 November 2010 £000	As at 31 May 2011 £000
Assets
Non-current assets
Property, plant and equipment	2,058	2,110	2,171
Intangible assets	955	935	974
Available-for-sale investments	712	809	1,133
Total non-current assets	3,725	3,854	4,278
Current assets
Inventories	6,817	6,751	7,219
Trade and other receivables	7,253	7,730	6,424
Derivative financial assets	32	-	-
Cash and cash equivalents	1,859	2,345	2,264
Total current assets	15,961	16,826	15,907
Total assets	19,686	20,680	20,185
Liabilities
Non-current liabilities
Loans and borrowings	(2,019)	(2,094)	(2,122)
Deferred tax	(179)	-	(123)
Total non-current liabilities	(2,198)	(2,094)	(2,245)
Current liabilities
Trade and other payables	(2,345)	(1,791)	(2,547)
Loans and borrowings	(1,866)	(3,933)	(1,916)
Corporation tax liability	(181)	(123)	(133)
Derivative financial liabilities	-	(115)	(120)
Total current liabilities	(4,392)	(5,962)	(4,716)
Total liabilities	(6,590)	(8,056)	(6,961)
TOTAL NET ASSETS	13,096	12,624	13,224

Capital and reserves attributable to equity holders of the company
Share capital	3,792	3,852	3,792
Capital redemption reserve	600	540	600
Treasury share reserve	(515)	(572)	(510)
Available-for-sale reserve	(269)	(172)	152
Foreign exchange reserve	1,719	1,528	1,902
Retained earnings	7,769	7,448	7,288
TOTAL EQUITY	13,096	12,624	13,224

Unaudited Consolidated Cash Flow Statement

for the 6 months ended 30 November 2011

	6 months to 30 November 2011 £000	6 months to 30 November 2010 £000	8 months to 31 May 2011 £000
Cash flows from operating activities
Profit for the period	481	124	483
Adjustments for:
Depreciation	118	98	139
Movement in derivative financial assets and liabilities	(153)	176	(284)
Translation gain/(loss) on cash and cash equivalents	6	(6)	5
Finance expense	80	181	104
Finance income	(10)	(7)	(9)
Loss on sale of property, plant and equipment	-	23	17
Income tax expense	216	114	326
Cash flows from operating activities before changes in working capital and provisions	738	703	781
Decrease/(increase) in inventories	282	259	258
(Increase)/decrease  in trade and other receivables	(937)	(2,072)	901
(Decrease)/increase  in trade and other payables	(186)	236	1,051
Cash (absorbed)/generated by operating activities	(103)	(874)	2,991
Income taxes (paid)/recovered	(105)	36	(101)
Net cash flows from operating activities	(208)	(838)	2,890
Investing activities
Purchase of property, plant and equipment	(42)	(74)	(124)
Sale of property, plant and equipment	-	38	23
Bank interest received	10	7	9
Net cash used in investing activities	(32)	(29)	(92)
Financing activities
Purchase of treasury shares	(5)	-	(47)
Proceeds from bank borrowings	-	681	-
Repayment of bank borrowings	(80)	-	(2,575)
Bank interest paid	(80)	(181)	(104)
Net cash used in financing activities	(165)	500	(2,726)
Net (decrease)/increase in cash and cash equivalents	(405)	(367)	72
Cash and cash equivalents at beginning of the period	2,264	2,712	2,192
Cash and cash equivalents at end of the period	1,859	2,345	2,264

 

Unaudited Consolidated Statement of Changes in Equity

for the six months ended 30 November 2011

	Share capital £000	Capital redemption reserve £000	Treasury share reserve £000	Available- for- sale reserve £000	Foreign exchange reserve         £000	Retained earnings £000	Total equity £000
At 1 June 2011	3,792	600	(510)	152	1,902	7,288	13,224
Total comprehensive income*	-	-	-	(421)	(183)	481	(123)
Purchase of treasury shares	-	-	(5)	-	-	-	(5)
At 30 November 2011	3,792	600	(515)	(269)	1,719	7,769	13,096

	Share capital £000	Capital redemption reserve £000	Treasury share reserve £000	Available- for- sale reserve £000	Foreign exchange reserve         £000	Retained earnings £000	Total equity £000
At 1 June 2010	3,852	540	(572)	314	1,647	7,324	13,105
Total comprehensive income*	-	-	-	(486)	(119)	124	(481)
At 30 November 2010	3,852	540	(572)	(172)	1,528	7,448	12,624

	Share capital £000	Capital redemption reserve £000	Treasury share reserve £000	Available- for- sale reserve £000	Foreign exchange reserve         £000	Retained earnings £000	Total equity £000
At 1 October 2010	3,852	540	(572)	(10)	1,768	6,914	12,492
Total comprehensive income*	-	-	-	162	134	483	779
Purchase of treasury shares	-	-	(47)	-	-	-	(47)
Cancellation of treasury shares	(60)	60	109	-	-	(109)	-
At 31 May 2010	3,792	600	(510)	152	1,902	7,288	13,224

* The components of total comprehensive income are disclosed on page 2.

The following describes the nature and purpose of each reserve within equity:

Reserve	Description and purpose
Capital redemption reserve	Amounts transferred from share capital on redemption of issued shares
Treasury share reserve	Cost of own shares held in treasury
Available-for-sale reserve	Gains/(losses) arising on financial assets classified as available-for-sale
Foreign exchange reserve	Gains/(losses) arising on retranslation of the net assets of overseas operations into sterling
Retained earnings	Cumulative net gains/(losses) recognised in the consolidated statement of comprehensive income after deducting the cost of cancelled treasury shares

 

Interim results

for the 6 months ended 30 November 2011

Notes to the accounts

1.   The financial information in this report does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.

The interim results for the six months ended 30 November 2011 and 30 November 2010 are unaudited.

The financial information for the eight months ended 31 May 2011 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for the eight months ended 31 May 2011 have been filed with the Registrar of Companies.  The Independent Auditor's Report on the Annual Report and Financial Statement for the eight months ended 31 May 2011 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

2.  Ordinary shares of 12 pence each used in the calculation of earnings per share:

	6 months to 30 November 2011	6 months to 30 November 2010	8 months to 31 May 2011
	28,653,468	28,909,342	28,847,819

3.  Reconciliation of movements in net debt

	6 months to 30 November 2011 £000	6 months to 30 November 2010 £000	8 months to 31 May 2011 £000
(Decrease)/increase in cash & cash equivalents	(405)	(367)	72
Proceeds from bank borrowings	-	(681)	-
Repayment of bank borrowings	80	-	2,575
Foreign currency translation differences on loans	73	104	(69)
(Increase)/decrease in net debt	(252)	(944)	2,578
Net debt at beginning of period	(1,774)	(2,738)	(4,352)
Net debt at end of period	(2,026)	(3,682)	(1,774)

4.  Analysis of net debt

	6 months to 30 November 2011 £000	6 months to 30 November 2010 £000	8 months to 31 May 2011 £000
Cash	1,859	2,345	2,264
Overdrafts	-	-	-
Loans repayable in less than one year	(1,866)	(3,933)	(1,916)
Loans repayable in between  one and five years	(2,019)	(2,094)	(2,122)
Net debt at end of period	(2,026)	(3,682)	(1,774)

5.  Segmental information

	6 months to 30 November 2011 £000	6 months to 30 November 2010 £000	8 months to 31 May 2011 £000
External revenue
Hemmers Europe	13,908	13,986	18,138
Hemmers China	847	683	881
Total Group external revenue	14,755	14,669	19,019

	6 months to 30 November 2011 £000	6 months to 30 November 2010 £000	8 months to 31 May 2011 £000
Profit before tax
Hemmers Europe (local GAAP)	493	386	520
IFRS adjustment - financial derivatives	153	(176)	284
IFRS adjustment - goodwill amortisation	60	57	79
Hemmers Europe (IFRS)	706	267	883
Hemmers China	37	6	68
Unrealised profit in stock	(8)	(8)	1
Holding companies	(38)	(27)	(143)
Group profit before tax	697	238	809

	As at 30 November 2011 £000	As at 30 November 2010 £000	As at 31 May 2011 £000
Net assets
Hemmers Europe (local GAAP)	8,239	7,499	7,963
IFRS adjustment - financial derivatives	23	(115)	(86)
IFRS adjustment - goodwill amortisation	431	475	397
Hemmers Europe (IFRS)	8,693	7,859	8,274
Hemmers China	226	197	184
Unrealised profit in stock	(33)	(26)	(25)
Holding companies	4,210	4,594	4,791
Group net assets	13,096	12,624	13,224

 

END

 

 

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