Half Yearly Report

RNS Number : 4444I
Leeds Group PLC
15 June 2011
 



  

 

  

LEEDS GROUP PLC

Interim Results for the six months ended 31st March 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 £627,000 in the six month period ended 31st March 2011, compared with £534,000 in the corresponding period of last year.  It is particularly pleasing to report such positive news after a disappointing performance in the second half of the previous financial year.  Earnings per share increased to 2.2 pence (2010: 1.8 pence) reflecting the increased profit and the reduced number of shares in issue.

 

Revenue at Hemmers Europe, the Group's German based operating subsidiary, increased to £14,641,000 (2010: £13,990,000).  Sales volumes were marginally down on last year, and the increase in revenue reflects sales prices on average 10% higher than in 2010. There has been a substantial increase in the price of cotton goods, but our sales price increases have made it possible to preserve margins at close to last year's level. This, together with modest reductions in overhead expense, led to a profit before tax for Hemmers Europe of £947,000 (2010: £715,000), which included a gain on valuation of financial derivatives of £220,000 (2010: £193,000).

 

Although external revenue at Hemmers China was lower than last year, total revenue grew by 18% as Hemmers Europe sourced a substantially greater volume of its purchases from its Chinese operation. The directors remain satisfied with the progress being made in China.

 

Net asset value per share (excluding shares held in treasury) at 31st March 2011 was 46.6 pence (2010: 46.8 pence) inclusive of goodwill.  During the period lower stockholding contributed to a reduction of £1,996,000 in the aggregate debt of Hemmers Europe and Hemmers China, whilst cash balances held by the holding company at the period end were £1,751,000 (2010: £2,025,000).

 

At 31st March 2011, the Group continues to hold an investment in Dawson International Plc ("Dawson").  The Board noted the interim results for Dawson issued in May 2011, which showed cash resources in excess of £11 million, but also a significant liability in a defined benefit pension scheme.  Whilst Dawson has been active in restructuring itself during the last couple of years, the Leeds Group Board believes that any growth in the value of Dawson's shares will be subject to a satisfactory resolution of the pension scheme issues.

 

The Board is proceeding with 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 a charge of £125,000 relating to the costs of the action that is expected to be heard in the near future has been made in the accounts of the parent company.

 

The Company has continued to use the authority granted to it to buy back shares into Treasury, although liquidity in Leeds Group shares has been limited. During the six month period, the Company purchased 250,000 shares into Treasury, and cancelled a further 500,000 shares in order to comply with Companies Act 2006 requirements.  In line with previous decisions, the Board does not propose an interim dividend.

 

The months of April and May represent the low point in the annual business cycle when losses are to be anticipated before activity picks up in June and July and reaches a crescendo in the very busy months of August, September and October. With this in mind, the Board has decided to change the Group's accounting reference date from 30 September to 31 May so that the work involved in stocktaking, accounts preparation and audit can be accommodated with significantly less disruption to sales activity. The next Annual Report will therefore cover the eight months ending 31 May 2011.

 

The economic environment remains challenging, and the large increase in the price of cotton goods has led to a current order book that is less full than twelve months ago. We have taken action on sales prices aimed at protecting margins: it remains to be seen whether order levels pick up as the year progresses and it becomes clearer to customers that current price levels are not a short term phenomenon that can be avoided by delaying orders.

 

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

 

Kathryn Davenport

Chairman 

14 June 2011

 

 

 

Enquiries:

 

 

Leeds Group plc

Citigate Dewe Rogerson

Seymour Pierce Limited

 


 

Kathryn Davenport, Chairman

Fiona Tooley

Sarah Jacobs

07921 261254

Tel: 0121 362 4035 or 07785 703523

Tel: 020 7107 8000




Malcolm Wilson, Company Secretary



Tel: 07801 224618



 

 

 

Unaudited Consolidated Statement of Comprehensive Income

for the 6 months ended 31 March 2011

 

6 months to

31 March

2011

£000

6 months to

31 March

2010

£000

12 months to

30 September 2010

£000

 

Revenue

 

15,315

 

14,829

 

27,655

 

Cost of sales

 

(11,415)

 

(10,892)

 

(21,378)

 

Gross profit

 

3,900

 

3,937

 

6,277

 

Distribution costs

 

(1,162)

 

(1,124)

 

(2,064)

 

Administrative expenses

 

(1,772)

 

(1,969)

 

(3,632)

 

Profit from operations

 

966

 

844

 

581

 

Finance expense

 

(78)

 

(108)

 

(289)

 

Finance income

 

7

 

8

 

15

 

Profit before tax

 

895

 

744

 

307

 

Tax expense

 

(268)

 

(210)

 

(176)

 

Profit for the period, attributable

to the equity holders of the parent

 

 

627

 

 

534

 

 

131

 

 

Other comprehensive income:

 

 

 

 

Translation differences on foreign operations

 

275

 

(189)

 

(498)

 

Unrealised loss taken to available-for-sale reserve

 

-

 

-

 

(324)

 

Other comprehensive income for the period

 

275

 

(189)

 

(822)

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

 

902

 

345

 

(691)

 

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

31 March

2011

6 months to

31 March

2010

12 months to

30 September 2010

 

 

 

 

Basic and diluted (pence)

2.2p

1.8p

0.5p

 

 

 

Unaudited Consolidated Balance Sheet

at 31 March 2011

 

As at

31 March

2011

£000

As at

31 March

2010

£000

As at

30 September 2010

£000

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

2,219

2,322

2,197

Intangible assets

987

994

959

Available-for-sale investments

971

1,295

971

 

 

 

 

Total non-current assets

4,177

4,611

4,127

 

 

 

 

Current assets

 

 

 

Inventories

6,205

5,900

7,377

Trade and other receivables

7,707

6,946

7,240

Derivative financial assets

-

4

-

Cash available on demand

2,332

2,533

2,192

 

 

 

 

Total current assets

16,244

15,383

16,809

 

 

 

 

Total assets

20,421

19,994

20,936

 

 

 

 

Liabilities

 

 

 

Non-current liabilities

 

 

 

Loans and borrowings

(2,161)

(2,224)

(2,150)

 

 

 

 

Total non-current liabilities

(2,161)

(2,224)

(2,150)

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

(1,884)

(1,568)

(1,469)

Loans and borrowings

(2,628)

(2,655)

(4,394)

Corporation tax liability

(215)

(19)

(29)

Derivative financial liabilities

(186)

-

  (402)

 

 

 

 

Total current liabilities

(4,913)

(4,242)

(6,294)

 

 

 

 

Total liabilities

(7,074)

(6,466)

(8,444)

 

 

 

 

TOTAL NET ASSETS

13,347

13,528

12,492

 

 

 

 

 

Capital and reserves attributable to

equity holders of the company

 

 

 

Share capital

3,792

3,852

3,852

Capital redemption reserve

600

540

540

Treasury share reserve

(510)

(572)

(572)

Available-for-sale reserve

(10)

314

(10)

Foreign exchange reserve

2,043

2,077

1,768

Retained earnings

7,432

7,317

6,914

 

 

 

 

TOTAL EQUITY

13,347

13,528

12,492

 

 

 

 

 

Unaudited Consolidated Cash Flow Statement

for the 6 months ended 31 March 2011

 

6 months to

31 March

2011

£000

6 months to

31 March

2010

£000

12 months to

30 September 2010

£000

Cash flows from operating activities

 

 

 

Profit for the period

627

534

131

Adjustments for:

 

 

 

Depreciation

114

122

221

Foreign exchange differences

(220)

(193)

228

Translation gain/(loss) on cash and cash equivalents

13

3

(19)

Finance expense

78

108

289

Finance income

(7)

(8)

(15)

Loss on sale of property, plant and equipment

17

-

10

Income tax expense

268

210

176

 

 

 

 

Cash flows from operating activities before

changes in working capital and provisions

 

890

 

776

 

1,021

 

 

 

 

Decrease/(increase) in inventories

1,339

621

(1,088)

Increase  in trade and other receivables

(266)

(108)

(642)

Increase  in trade and other payables

361

238

214

 

 

 

 

Cash generated from operating activities

2,324

1,527

(495)

Income taxes paid

(88)

(186)

(147)

 

 

 

 

Net cash flows from operating activities

2,236

1,341

(642)

 

 

 

 

Investing activities

 

 

 

Purchase of property, plant and equipment

(118)

(143)

(224)

Sale of property, plant and equipment

23

-

21

Bank interest received

7

8

15

 

 

 

 

Net cash used in investing activities

(88)

(135)

(188)

 

 

 

 

Financing activities

 

 

 

Purchase of treasury shares

(47)

(49)

(49)

Proceeds from bank borrowings

-

 

790

Repayment of bank borrowings

(1,883)

(1,086)

-

Bank interest paid

(78)

(108)

(289)

 

 

 

 

Net cash used in financing activities

(2,008)

(1,243)

452

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

 

140

 

(37)

 

(378)

 

 

 

 

Cash and cash equivalents at beginning of the period

2,192

2,570

2,570

 

 

 

 

Cash and cash equivalents at end of the period

2,332

2,533

2,192

 

 

 

 

 

 

Unaudited Consolidated Statement of Changes in Equity

for the six months ended 31 March 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 October 2010

3,852

540

(572)

(10)

1,768

6,914

12,492

Total comprehensive income*

-

-

-

-

275

627

902

Purchase of treasury shares

-

-

(47)

-

-

-

(47)

Cancellation of treasury shares

(60)

60

-

-

-

-

-

Cost of shares cancelled

-

-

109

-

-

(109)

-

 

 

 

 

 

 

 

 

At 31 March 2011

3,792

600

(510)

(10)

2,043

7,432

13,347

 

 


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 2009

3,897

495

(605)

314

2,266

6,865

13,232

Total comprehensive income*

-

-

-

-

(189)

534

345

Purchase of treasury shares

-

-

(49)

-

-

-

(49)

Cancellation of treasury shares

(45)

45

-

-

-

-

-

Cost of shares cancelled

-

-

82

-

-

(82)

-

 

 

 

 

 

 

 

 

At 31 March 2010

3,852

540

(572)

314

2,077

7,317

13,528

 

 


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 2009

3,897

495

(605)

314

2,266

6,865

13,232

Total comprehensive income*

-

-

-

(324)

(498)

131

(691)

Purchase of treasury shares

-

-

(49)

-

-

-

(49)

Cancellation of treasury shares

(45)

45

-

-

-

-

-

Cost of shares cancelled

-

-

82

-

-

(82)

-

 

 

 

 

 

 

 

 

At 30 September 2010

3,852

540

(572)

(10)

1,768

6,914

12,492

 

* 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

 

 

 

Interim results

for the 6 months ended 31 March 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 31 March 2011 and 31 March 2010 are unaudited.

The financial information for the year ended 30 September 2010 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for the year ended 30 September 2010 have been filed with the Registrar of Companies.  The Independent Auditors' Report on the Annual Report and Financial Statement for the year ended 30 September 2010 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

31 March

2011

6 months to

31 March

2010

12 months to

30 September 2010

 

 

 

 

 

28,877,474

29,158,573

29,033,616

 

 

3.  Reconciliation of movements in net debt

 

 

6 months to

31 March

2011

£000

6 months to

31 March

2010

£000

12 months to

30 September 2010

£000

 

 

 

 

Increase/(decrease) in cash & cash equivalents

140

(37)

(378)

Proceeds from bank borrowings

-

-

(790)

Repayment of bank borrowings

1,883

1,086

-

Foreign currency translation differences on loans

(128)

127

338

 

 

 

 

Net decrease/(increase) in net debt

1,895

1,176

(830)

Net debt at beginning of period

(4,352)

(3,522)

(3,522)

 

 

 

 

Net debt at end of period

(2,457)

(2,346)

(4,352)

 

 

4.  Analysis of net debt

 

 

6 months to

31 March

2011

£000

6 months to

31 March

2010

£000

12 months to

30 September 2010

£000

 

 

 

 

Cash

2,332

2,533

2,192

Loans repayable in less than one year

(2,628)

(2,655)

(4,394)

Loans repayable in between one and five years

(2,161)

(2,224)

(2,150)

 

 

 

 

Net debt at end of period

(2,457)

(2,346)

(4,352)

 

 

 

Interim results

for the 6 months ended 31 March 2011

 

Notes to the accounts (continued)

 

5.  Segmental information

 

 

6 months to

31 March

2011

£000

6 months to

31 March

2010

£000

12 months to

30 September 2010

£000

External revenue

 

 

 

Hemmers Europe

14,641

13,990

26,301

Hemmers China

674

839

1,354

 

 

 

 

Total Group external revenue

15,315

14,829

27,655

 

 

 

 

6 months to

31 March

2011

£000

6 months to

31 March

2010

£000

12 months to

30 September 2010

£000

Profit before tax

 

 

 

Hemmers Europe (local GAAP)

669

462

506

IFRS adjustment - financial derivatives

220

193

(228)

IFRS adjustment - goodwill amortisation

58

60

118

 

 

 

 

Hemmers Europe (IFRS)

947

715

396

Hemmers China

66

115

75

Unrealised profit in stock

(3)

13

5

Holding companies

(115)

(99)

(169)

 

 

 

 

Group profit before tax

895

744

307

 

 

 

As at

31 March

2011

£000

As at

31 March

2010

£000

As at

30 September 2010

£000

Net assets

 

 

 

Hemmers Europe (local GAAP)

8,161

7,696

7,507

IFRS adjustment - financial derivatives

(186)

4

(402)

IFRS adjustment - goodwill amortisation

541

423

468

 

 

 

 

Hemmers Europe (IFRS)

8,516

8,123

7,573

Hemmers China

185

188

150

Unrealised profit in stock

(29)

(20)

(26)

Holding companies

4,675

5,237

4,795

 

 

 

 

Group net assets

13,347

13,528

12,492

 

 

 


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