Half Yearly Report

RNS Number : 4444I

Leeds Group PLC

15 June 2011

 



LEEDS GROUP PLC

Interim Results for the six months ended 31^st 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 31^st 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 31^st 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 31^st 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: [phone] or 07785 703523	Tel: [phone]
Malcolm Wilson, Company Secretary
Tel: [phone]

 

 

 

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

 

END

 

 

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