Interim Results

RNS Number : 6686V

Leeds Group PLC

02 June 2008

 



Issued on behalf of Leeds Group plc                                                                                                                                                                              Embargoed: 7.00am

Date: 2 June 2008     

Leeds Group plc

Interim Results for the six months ended 31st March 2008

STATEMENT BY THE GROUP CHAIRMAN, EWEN WIGLEY

Group Results

I am pleased to report that the group's profit before tax for the six months ended 31 March 2008 was £361,000, which compares with £393,000 in the corresponding period of last year.

This is the first set of reported results prepared in accordance with International Financial Reporting Standards ('IFRS'). Comparative results for the six months ended 31 March 2007 and the year ended 30 September 2007 have been restated in accordance with IFRS and restated profit before tax for these periods is higher by £43,000 and £70,000 respectively than the figures previously announced under UK GAAP. The transition to IFRS represents an accounting change only and the underlying performance of the group and its cash flows are unaffected. The Restatement of Financial Information under IFRS released by the group on 30 May 2008 can be seen on the group's website and contains full reconciliations between UK GAAP and IFRS balance sheets at 1 October 2006, 31 March 2007 and 30 September 2007 and between UK GAAP and IFRS income statements for the six months ended 31 March 2007 and the year ended 30 September 2007, together with the accounting policies that have been adopted. 

In the 2007 Report & Accounts, I referred to the opportunity available to the Hemmers-Itex business as a result of the demise of a competitor. Hemmers-Itex has undertaken selective recruitment of experienced staff at its headquarters and agents, both inside and outside Germany, in order to achieve growth in sales. The warehousing and office facilities in Nordhorn, Germany have been expanded to accommodate all personnel on site and improve stock handling. I am pleased to report that sales grew by 15.8% in Euro terms to EUR 14,239,000 (2007: EUR 12,291,000). The increased overhead and interest charges at Hemmers-Itex held back profitability, but the Board believes that the investment is for future growth and will bring rewards in due course.

With the sole operating business of the company based in Germany, the strength of the Euro against Sterling has had a positive impact on the group's results. Over the six month period covered by this report, the Euro appreciated against Sterling by some 12.4%, increasing on re-translation the group's opening net assets by £927,000, and increasing Hemmers-Itex sales and profits by £1,407,000 and £25,000 respectively. 

The earnings per share of 1.0 pence per share (2007: 0.7 pence) reflects a lower effective tax rate arising because a higher proportion of profits were made in parts of the Group where no tax was payable, as well as a reduction in the weighted average number of shares in issue.

The company has continued with its share buyback programme, purchasing 380,000 shares in the first six months of the year. Following the renewal of the authority to buy back shares at the Annual General Meeting the Board intends to continue to make purchases whenever the opportunity arises. In line with the Board's previous decisions, it does not propose an interim dividend.

On 22 May 2008 the Company announced it had acquired approximately 29% of Dawson International plc. During the period, the company also made an investment in one million shares of European Equity Tranche Income Ltd. These investments are consistent with the intention of the Board to maximise the long-term value of the group, and we continue to look for other acquisitions or investments that will strengthen the group and benefit shareholders.

Enquiries:
Leeds Group plc	Citigate Dewe Rogerson	Seymour Pierce Limited
Malcolm Wilson, Company Secretary	Fiona Tooley	Sarah Jacobs
Tel: [phone] or 07801 224618	Tel: [phone]	Tel: [phone]
Ewen Wigley, Chairman
Tel: [phone]

Leeds Group plc

Interim Results

Consolidated Income Statement

	6 months to 31st March 2008 £000	6 months to 31st March 2007 £000	12 months to 30th September 2007 £000
Revenue	11,337	8,350	17,523
Cost of sales	(8,644)	(6,308)	(13,418)
Gross profit	2,693	2,042	4,105
Distribution expenses	(775)	(546)	(1,096)
Administrative expenses	(1,567)	(1,176)	(2,296)
Profit from operations	351	320	713
Finance expense	(117)	(44)	(121)
Finance income	127	117	238
Profit before tax	361	393	830
Tax expense	(46)	(147)	(245)
Profit for the period, attributable to equity holders of the company	315	246	585
Earnings per share for profit attributable to the equity holders of the company
Basic and diluted (pence)	1.0p	0.7p	1.7p
Statement of Recognised Income and Expense
Translation differences on foreign operations	927	13	167
Net income recognised directly in equity	927	13	167
Profit for the period	315	246	585
Total recognised income and expense for the period	1,242	259	752

Leeds Group plc

Interim Results

Consolidated Balance Sheet

	As at 31st March 2008 £000	As at 31st March 2007 £000	As at 30th September 2007 £000
Assets
Non-current assets
Property, plant and equipment	1,755	259	308
Intangible assets	889	759	779
Available for sale investments	276	-	-
Total non-current assets	2,920	1,018	1,087
Current assets
Inventories	5,386	3,620	5,172
Trade and other receivables	5,612	3,562	4,344
Cash	3,800	4,701	4,764
Total current assets	14,798	11,883	14,280
Total assets	17,718	12,901	15,367
Liabilities
Non-current liabilities
Loans and borrowings	(1,990)	-	(1,569)
Total non-current liabilities	(1,990)	-	(1,569)
Current liabilities
Trade and other payables	(1,111)	(851)	(1,195)
Loans and borrowings	(2,339)	(794)	(1,535)
Corporation tax liability	-	(91)	(25)
Derivative financial liabilities	(115)	(4)	(26)
Provisions	(103)	(139)	(125)
Total current liabilities	(3,668)	(1,879)	(2,906)
Total liabilities	(5,658)	(1,879)	(4,475)
TOTAL NET ASSETS	12,060	11,022	10,892

Capital and reserves attributable to equity holders of the company
Share capital	4,188	4,392	4,188
Capital redemption reserve	204	-	204
Treasury share reserve	(840)	(462)	(766)
Foreign exchange reserve	1,094	13	167
Retained earnings	7,414	7,079	7,099
TOTAL EQUITY	12,060	11,022	10,892

Leeds Group plc

Interim Results

Consolidated Cash Flow Statement

	6 months to 31st March 2008 £000	6 months to 31st March 2007 £000	12 months to 30th September 2007 £000
Cash flows from operating activities
Profit for the period	315	246	585
Adjustments for :
Depreciation	79	41	94
Foreign exchange loss	85	4	26
Translation differences on cash and cash   equivalents	98	-	(6)
Finance expense	117	44	121
Finance income	(127)	(117)	(238)
Gain on sale of property, plant and equipment	-	-	(7)
Income tax expense	46	147	245
Cash flows from operating activities before changes in working capital and provisions	613	365	820
Decrease/(increase) in inventories	519	942	(490)
(Increase)/decrease in trade and other receivables	(597)	436	(241)
(Decrease)/increase in trade and other payables	(317)	(158)	114
Decrease in provisions	(22)	(21)	(35)
Cash generated from operating activities	196	1,564	168
Income taxes paid	(133)	(343)	(482)
Net cash flows from operating activities	63	1,221	(314)
Investing activities
Purchase of property, plant and equipment	(1,482)	(54)	(155)
Sale of property, plant and equipment	-	-	12
Purchase of available for sale investments	(276)	-	-
Dividends from available for sale investments	12	-	-
Interest received	115	162	238
Net cash used in investing activities	(1,631)	108	95
Financing activities
Purchase of treasury shares	(74)	(112)	(735)
Proceeds from bank borrowings	716	-	3,034
Repayment of bank borrowings	-	(1,016)	(1,743)
Interest paid	(117)	(89)	(121)
Net cash used in financing activities	525	(1,217)	435
Net (decrease)/increase in cash and cash equivalents	(1,043)	112	216
Cash and cash equivalents at beginning of the period	4,694	4,478	4,478
Cash and cash equivalents at end of the period	3,651	4,590	4,694

Leeds Group plc

Interim Results

Notes to the accounts

• The financial information in this report does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The interim accounts for the six months ended 31 March 2008 and 31 March 2007 are unaudited. The comparative figures for the financial year ended 30 September 2007 are not the group's statutory accounts, but have been extracted from those accounts, which have been filed with the Registrar of Companies and on which the group's auditor gave an unqualified report that did not include reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain statements under section 237 (2) or (3) of the Companies Act 1985.

2.       Comparative results for the six months ended 31 March 2007 and the year ended 30 September 2007 have been restated in   accordance with International Financing Reporting Standards (IFRS). Full reconciliations between UK GAAP and IFRS balance sheets at 1 October 2006, 31 March 2007 and 30 September 2007 and between UK GAAP and IFRS income statements for the six months ended 31 March 2007 and for the year ended 30 September 2007, together with the accounting policies adopted, are set out in the Restatement of Financial Information under IFRS released by the group on 30 May 2008.

3.    Earnings per share have been calculated on an average of 31,377,138 (2007: 34,669,647) ordinary shares of 12 pence each in issue during the period.

 4.  The table below sets out a reconciliation of movement in equity

	6 months to 31st March 2008 £000	6months to 31st March 2007 £000	12 months to 30th September 2007 £000
At beginning of period	10,892	10,875	10,875
Profit for the period	315	246	585
Purchase of own shares for treasury	(74)	(112)	(735)
Foreign currency translation differences	927	13	167
At end of period	12,060	11,022	10,892

 

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