Interim Results
Leeds Group PLC
26 June 2002
Issued by Leeds Group plc
Date: Wednesday 26th June 2002 Embargoed: 7.00am
Leeds Group plc
Interim Results for the six months to 31 March 2002
STATEMENT BY THE CHAIRMAN, BILL CRAN
At the Annual General Meeting held on 11th February, Robert Wade told
shareholders that in the current financial year, Leeds Leasing was showing
further increases in sales and profits but that the performance of the remaining
textile businesses, and particularly Nemesis, the Italian subsidiary, continued
to decline. Having succeeded Robert as Chairman at the conclusion of the AGM, I
can confirm that his comments are borne out in the interim accounts. However, I
am also pleased to report that further progress has been achieved in
implementing our strategic withdrawal from textile manufacturing businesses both
during and since the period under review.
Group profit before tax and exceptional items was £195,000 (2001: £154,000)
although within this total there were considerable changes in the performances
of individual businesses:
Leeds Leasing recorded pre-tax profit of £451,000, an increase of 19% on last
year. The lease book at 31st March 2002 stood at £18.5m, representing growth of
37% over March 2001. The second half of the year, traditionally stronger for
Leeds Leasing, has begun in an encouraging fashion, and there is every reason to
believe the recent trend of profitable growth can continue.
Import & Distribution saw operating profits reduce by £68,000 to £310,000.
Hemmers, based in Germany, matched last year's performance but the results of
Itex in Holland declined and, as a consequence, we announced on 18th April 2002
our intent, subject to consultation, to withdraw from Holland and continue
business in Western Europe from our German company. The market conditions
favouring suppliers from the Far East make textile manufacturing in Europe
unattractive but conversely, work in favour of an importing business. We believe
our proposed action will increase the profitability of the Division, while
releasing cash from synergistic stock reduction and from the sale of surplus
freehold property. The decision of the Dutch employment authorities is expected
in the near future, and if favourable will enable this project to be completed
during this financial year.
Nemesis suffered a decline of 25% in sales from 2001, and in a business heavily
dependent on volumes this led to a fall in operating profit from £747,000 last
year to just £28,000 despite management action to control overheads, including a
reduction of more than 13% in the workforce. We continue to explore
opportunities to divest this business.
The operating profit of £192,000 reported as discontinued operations comprises
the results of the UK Dyeing Division and of Sharps Fabric Printers, which were
sold on 17th January and 6th June respectively. The sale of the UK Dyeing
Division resulted in an exceptional loss of £4,231,000 of which £3,388,000 was
in respect of goodwill previously written off on acquisition. Included in the
comparative figure for discontinued operations last year are the losses of the
UK Printing Division from which we have now withdrawn.
The board does not propose the payment of an interim dividend (2001: 1p).
continued.....
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Leeds Group plc
Interim Results
STATEMENT BY THE CHAIRMAN, BILL CRAN
In the 12 months to 31st March 2002, borrowings by Leeds Leasing increased by
£3.7m, which, together with retained earnings, has financed the increase of
£4.9m in the lease book. In the same period, net borrowings in our textile
businesses decreased by £7.0m with there being a net cash surplus in the UK of
£3.3m. Net borrowings in the textile businesses have continued to fall since
31st March as a result of the sale of Sharps Fabric Printers, and the sale for
£2.7m of three properties previously utilised in the UK Printing Division.
We are currently holding discussions with the bankers to our European businesses
with a view to re-financing those businesses with debt secured on local assets
without the need for parent company guarantees. This is a necessary first step
before we can apply to the High Court for approval for the capital
reconstruction that will be required for us to resume dividends or otherwise to
return surplus cash to shareholders.
In conclusion, we are pleased to report the continuing growth of Leeds Leasing
and further progress in implementing our strategic withdrawal from textile
manufacturing. We are currently marketing our one remaining UK property to
maximise value prior to disposal, which we hope to achieve during the coming
months.
ENQUIRIES
Chris Marsden, Chief Executive
Malcolm Wilson, Finance Director
Leeds Group plc
Tel: 0113 391 9000
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Leeds Group plc
Interim Results
Profit and Loss Account
Six months to Six months to Twelve months to
31 March 2002 31 March 2001 30 September 2001
£000 £000 £000
Turnover
Continuing operations 15,643 19,828 33,739
Discontinued operations 3,902 13,894 22,491
19,545 33,722 56,230
Cost of sales (14,304) (26,809) (44,687)
Gross profit 5,241 6,913 11,543
Distribution costs (645) (966) (1,756)
Administrative expenses (3,640) (4,993) (12,520)
Operating profit/(loss)
Continuing operations 764 1,495 1,480
Discontinued operations 192 (541) (476)
----- ----- -------
956 954 1,004
Exceptional items - - (3,737)
956 954 (2,733)
Profit on sale of land and buildings - - 1,185
Loss on sale or termination of a
business operation (4,231) - (12,057)
(Loss)/profit before interest (3,275) 954 (13,605)
Net interest payable (761) (800) (1,606)
(Loss)/profit before taxation (4,036) 154 (15,211)
Taxation (99) (132) 2,089
(Loss)/profit after taxation (4,135) 22 (13,122)
Dividends - (366) (366)
Unrecovered loss (4,135) (344) (13,488)
(Loss)/earnings per share
before exceptional items 0.3p 0.1p (2.7)p
exceptional items (11.6)p - (33.2)p
after exceptional items (11.3)p 0.1p (35.9)p
Dividend per share - 1.0p 1.0p
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Leeds Group plc
Interim Results
Group Balance Sheet
31 March 31 March 30 September
2002 2001 2001
£000 £000 £000
Fixed assets
Intangible assets 1,069 1,167 1,123
Tangible assets 11,494 24,913 16,074
12,563 26,080 17,197
Current assets
Stocks 7,394 12,563 10,109
Debtors 12,516 19,094 14,920
Finance lease debtors 18,471 13,522 16,702
Cash at bank and in hand 3,312 266 215
41,693 45,445 41,946
Creditors: amounts falling due
within one year (21,957) (31,105) (26,639)
Net current assets 19,736 14,340 15,307
Of which:
due within one year 9,406 6,737 5,501
due after more than one year 10,330 7,603 9,806
Total assets less current liabilities 32,299 40,420 32,504
Creditors: amounts falling due
after more than one year (9,946) (7,226) (9,277)
Provision for liabilities and charges (132) (1,896) (56)
Accruals and deferred income - (50) (107)
Net assets 22,221 31,248 23,064
Share capital and reserves:
Called up equity share capital 9,150 9,150 9,150
Share premium account 15,832 15,832 15,832
Profit and loss account (2,761) 6,266 (1,918)
Equity shareholders' funds 22,221 31,248 23,064
Reconciliation of movements in shareholders' funds:
Result for the period (4,135) (344) (13,488)
Goodwill written back 3,388 - 5,173
Exchange differences (96) 430 217
Net transfer (from)/to shareholders' funds (843) 86 (8,098)
Shareholders' funds at beginning of the period 23,064 31,162 31,162
Shareholders' funds at end of the period 22,221 31,248 23,064
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Leeds Group plc
Interim Results
Group Cash Flow Statement
Six months to Six months to Twelve months to
31 March 2002 31 March 30 September
£000 2001 2001
£000 £000
Net cash inflow/(outflow) from operating activities 1,289 (278) (2,786)
Returns on investments and servicing of finance (761) (800) (1,606)
Taxation (173) (248) 126
Capital expenditure and financial investment (52) (2,070) (434)
Acquisitions and disposals
(net of cash and cash equivalents) 4,089 540 943
Equity dividends paid - (732) (1,098)
Net cash inflow/(outflow) 4,392 (3,588) (4,855)
Translation difference 153 (442) (399)
Movement in net debt 4,545 (4,030) (5,254)
Net debt at beginning of the period (25,696) (20,442) (20,442)
Net debt at the end of the period (21,151) (24,472) (25,696)
Leasing Textiles Total
£000 £000 £000
As at 31 March 2002
Trading capital employed 17,500 25,872 43,372
Interest bearing net debt (14,311) (6,840) (21,151)
Net assets 3,189 19,032 22,221
Net debt as a percentage of:
trading capital employed 81.8% 26.4% 48.8%
net assets 448.9% 35.9% 95.2%
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Leeds Group plc
Interim Results
Notes
1. The interim results, which are not audited, have been prepared on the
basis of the accounting policies set out in the 2001 Annual Report. The
figures for the year ended 30th September 2001 have been abridged from the
Group's full accounts which have been filed with the Registrar of Companies
and on which the Company's auditors gave an unqualified report.
2. Earnings per share have been calculated on an average of 36,598,603
(2001: 36,598,603) ordinary shares of 25p in issue during the period.
3. The table below sets out a segmental analysis of the Group's operations.
Turnover (Loss)/profit before taxation
31 March 31 March 30 September 31 March 31 March 30 September
2002 2001 2001 2002 2001 2001
£000 £000 £000 £000 £000 £000
Leasing 1,713 1,412 3,010 912 751 1,683
Import & Distribution 6,009 7,809 14,969 310 378 601
Central costs - - - (486) (381) (753)
7,722 9,221 17,979 736 748 1,531
Nemesis 7,921 10,607 15,760 28 747 (51)
Continuing operations 15,643 19,828 33,739 764 1,495 1,480
Discontinued operations 3,902 13,894 22,491 192 (541) (476)
19,545 33,722 56,230 956 954 1,004
Exceptional items - - (3,737)
Profit on sale of land and buildings - - 1,185
Loss on sale or termination of a
business operation (4,231) - (12,057)
Interest
Leasing (461) (372) (796)
Textiles (300) (428) (810)
(761) (800) (1,606)
(Loss)/profit before taxation (4,036) 154 (15,211)
4. The UK Dyeing Division was sold to management on the 17th January 2002.
The results for this division have been shown as discontinued operations
within the accounts. The loss on termination of the business can be
analysed as follows:
£000
Loss on sale 843
Goodwill written back 3,388
4,231
5. Sharps Fabric Printers was sold to management on the 5th June 2002. The
results for this division have been shown as discontinued operations within
the accounts. This transaction has not been reflected in these accounts.
This information is provided by RNS
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