Final Results

Pittards PLC
13 March 2008


                                  Pittards plc


Pittards plc produces technically advanced leather for many of the world's
leading brands of gloves, shoes, luxury leathergoods and sports equipment.


12 March 2008



                  Results for the year ended 31 December 2007

                                    Summary


                                                             Year ended              Year ended
                                                          31 December 2007        31 December 2006
                                                                                     (restated)
                                                                  £m                     £m
Revenue                                                          28.9                   39.4
Percentage export                                                90%                    90%
Operating loss before exceptional items                         (1.9)                  (1.4)
Profit on sale of property                                       0.4                    0.8
Fundamental reorganisation                                      (0.3)                   0.2
Write back of deficit on pension scheme                           -                     26.9
Operating (loss) profit                                         (1.8)                   26.5
Finance costs and gains on derivatives                          (0.4)                   0.9
(Loss) profit on ordinary activities before tax                 (2.2)                   27.4
Net assets                                                       2.8                    5.0



Stephen Boyd, Chairman of Pittards, commented:

'2007 has turned out to be a year of two very different halves.'


                                    - ends -



For further information, please contact:

Reg Hankey, Chief Executive         Pittards plc                        Tel: [phone]
Jill Williams, Finance Director     Pittards plc                        Tel: [phone]
John Wakefield                      Blue Oar Securities Plc             Tel:[phone]






                      Preliminary announcement of results

                      for the year ended 31 December 2007



                              Chairman's statement



As noted in my interim statement in 2007, this is the first full year for which
we have had to prepare our financial statements in accordance with International
Financial Reporting Standards (IFRS).  This is now compulsory for AIM listed
companies but I will, as at the interim stage, comment on a UK GAAP basis to
enable an effective year on year comparison to be made.



2007 has turned out to be a year of two very different halves.  In the first
half we reported the successful integration of the Leeds business into the
Yeovil site and a small operating profit of £0.058m on a UK GAAP basis.  In the
second half we sustained a loss of £1.234m, due mainly to the weakness of the US
Dollar (which was in line with my concerns expressed at the 2007 AGM), resulting
in an operating loss for 2007 of £1.176m.  After bank interest of £0.466m (2006
- £0.866m) the loss before taxation was £1.642m (2006 - £1.324m before an
exceptional gain of £26.9m on the resolution of the pension deficit and other
exceptional items).



Under IFRS accounting rules the operating loss of £1.176m translates into a loss
of £1.783m for the year because under IAS 39 gains on derivative financial
instruments used to hedge 2007 foreign currency expenses (mainly dollar related)
have been accounted for in the restated 2006 figures.



Revenue for the year was £29.6m (IFRS £28.9m), a reduction of £10.6m from 2006's
£40.2m, due in the main to the decision to close our Leeds factory in 2006,
transferring some of the bovine production to Yeovil.  The revenue derived from
selling away wet blue (part processed) hides from the tanning business was lost
as we now only buy hides at the wet blue stage to fit our production, thus
improving cashflow in the business.  Of this turnover 90% is derived from sales
to customers overseas (2006 - 90%).



Glove leather sales reduced by 10% compared to 2006, most of the shortfall
occurring in the first half due to the effect of the mild winter on sales of
dress gloves.  Revenue was adversely impacted by the weaker dollar, particularly
in the second half.  Sports glove sales were strong across all sectors including
golf.  Business in the military gloves sector remains steady.



Sales of bovine leather for the shoe and leathergoods markets manufactured in
Yeovil represented 29% of turnover with sports footwear particularly strong and
exceeding expectations.  Saddlery sales have picked up steadily as production
from Yeovil has become established and quality expectations have been met.  We
are now working on a new range of leathergoods leathers to be introduced at the
Hong Kong leather fair.  In addition, bovine leather production at our Taiwanese
partner, Teh Chang, totalled just under 11/2m square feet for 2007, in line with
expectations.  The relationship has settled down well and we look forward to
progressing this in 2008.




In Ethiopia, Ethiopia Tannery Share Company (ETSC) is now producing significant
quantities of finished leathers following the installation of new equipment and
a training programme run by staff from Pittards Yeovil.  The Ethiopian
Government has announced that increasingly prohibitive tariffs on the export
from Ethiopia of part processed hides and skins will shortly be introduced.  As
a result of the development of our crust and finished leather capabilities
within Ethiopia this should represent a further opportunity for us.  New
leathers including sheepskins for shoe uppers and linings and products utilising
local hides for gloves and linings have been developed.  More products are
scheduled to be transferred from Yeovil over the next few months.  This transfer
of products is in line with our strategy to move production offshore where the
costs of manufacture are lower and in a currency which matches our predominantly
dollar revenue.



Our ongoing strategy to reduce our UK cost base in response to global conditions
has resulted in a restructuring within the Yeovil workforce.  Agreement was
reached in December 2007 that up to 50 employees would leave the Company by
virtue of redundancy during the first quarter of 2008 and this programme is now
well underway.  Wherever possible we have accommodated volunteers to reduce the
impact on the workforce.  The expected costs of the redundancy exercise have
been provided for in the 2007 result.



Net assets at 31 December 2007 were £2.884m (£2.808m under IFRS) compared to
£4.486m in 2006 (IFRS £4.973m).  This is principally due to the sale and
leaseback of the Yeovil factory which was completed in July 2007.  The factory
was sold for £3.1m which realised a net profit of £0.428m and the proceeds were
applied to repay the loan plus accrued interest due to the trustees of the
Pittards pension schemes as part of the agreement reached with the Pension
Protection Fund in 2006.  The lease is for a term of 10 years at an annual rent
of £254,000 and the initial rent free period of six months was beneficial for
cashflow during 2007.



Net borrowings at the year end were £3.5m, an improvement on £5.0m in 2006 which
included the Trustees' loan.  The losses sustained in the second half due to the
effect of the weak dollar, and the continued phased settlement of closure costs
from the Leeds operation have absorbed cash within the operation.  However the
Company's bankers are supportive of the Company's strategy and have put in place
an increased facility.



As we announced last year, Lindsey Blackford resigned from the board on 1 June
2007 and was replaced by Jill Williams as Finance Director on that date.
Stephen Boyd changed from Executive to Non-Executive Chairman on 7 December 2007
and Lars Fex resigned as a non-executive director.  We are grateful to both
Lindsey and Lars for their contributions to the board during their periods of
office.



The loyalty and commitment of our employees is much appreciated by our board,
particularly in the light of the significant strategic change arising from the
relocation of bovine production from Leeds and the off-shoring programme.



We remain committed to seeking new income streams to improve business
profitability.  We have progressed a collaborative alliance with Yarwood Leather
Ltd where they use their marketing skills and connections within the aviation
and other seating markets to introduce new performance leathers technically
developed and supplied by Pittards.  These markets take time to develop due to
the vigorous testing regimes but we have recently received our first sample
orders.  I am also pleased to advise that on 30 January 2008 we signed a joint
venture with Mr Teshome Kebede to form Pittards Global Sourcing Private Limited
Company in Ethiopia, which will produce and source leather garments and other
leathergoods, utilising our extensive experience in the global leather market.
We have also begun to operate at the retail level via a factory shop at the
Company's Yeovil premises where we believe we can further leverage the Pittards
brand for high quality leather products.  We continue to explore other
relationships within the leather industry with potential partners.



In the light of the continued uncertainty about the US dollar and the global
economic climate, we inevitably remain cautious in the short term but we are
committed to the further development of our strategy to change the shape of the
business to make it more robust and enable a return to profitability.



SD Boyd

12 March 2008





CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2007
                                                                                    2007              2006
                                                                                                (Restated)
                                                                                   £'000             £'000
Revenue                                                                           28,853            39,444
Cost of sales                                                                   (26,439)          (34,866)

Gross profit                                                                       2,414             4,578
Distribution costs                                                               (2,108)           (2,610)
Administrative expenses                                                          (2,753)           (3,523)
Gain (loss) on foreign currency translation                                          160             (212)
Other operating income                                                               376               369

Operating loss before exceptional items                                          (1,911)           (1,398)
Exceptional items
- Profit on sale of property                                                         428               770
- (Provision) release of provision for fundamental reorganisation                  (300)               250
- Write back of deficit on pension scheme                                              -            26,913

Operating (loss) profit                                                          (1,783)            26,535
Gain on derivatives classified as fair value through income statement                 64             1,801
Finance costs                                                                      (466)             (866)

(Loss) profit before taxation                                                    (2,185)            27,470
Taxation                                                                               -              (13)

(Loss) profit for the year                                                       (2,185)            27,457

Distributable to:
Equity shareholders                                                                    -                 -

(Loss) earnings per share
-                 basic and diluted                                               (1.0p)             18.9p


There were no discontinued operations in 2007 or 2006. Accordingly the results relate to continuing
operations.
(a) The results for 2006 have been restated on an IFRS basis.





CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2007

                                                                                    2007              2006
                                                                                                (Restated)
                                                                                   £'000             £'000

Total equity at beginning of year (as previously stated)                           4,486          (24,530)
Impact of transition to IFRS                                                         487             (374)

Total equity at beginning of year (restated)                                       4,973          (24,904)
(Loss) profit for the year                                                       (2,185)            27,457
Net proceeds of share issue                                                            -             2,420
Issue of warrants                                                                     20                 -

Total equity at end of year attributable to equity shareholders of the             2,808             4,973
parent





CONSOLIDATED BALANCE SHEET
as at 31 December 2007
                                                                         2007                 2006
                                                                                        (Restated)
                                                                        £'000                £'000
ASSETS
Non-current assets
Property, plant and equipment                                           2,481                5,744
Intangible assets                                                         367                  491
Total non-current assets                                                2,848                6,235

Current assets
Inventories                                                             5,654                6,086
Trade & other receivables                                               2,909                3,509
Derivative financial instruments                                            -                  438
Cash & cash equivalents                                                    13                   21
Total current assets                                                    8,576               10,054
Total assets                                                           11,424               16,289
LIABILITIES
Current liabilities
Trade & other payables                                                (4,758)              (5,808)
Interest bearing loans & borrowings                                   (3,187)              (1,984)
Derivative financial instruments                                         (51)                    -
Provisions                                                              (326)                (520)
Total current liabilities                                             (8,322)              (8,312)
Non-current liabilities
Interest bearing loans & borrowings                                     (294)              (3,004)
Total non-current liabilities                                           (294)              (3,004)
Total liabilities                                                     (8,616)             (11,316)
Net assets                                                              2,808                4,973
EQUITY
Called up share capital                                                 2,233                2,233
Share premium account                                                   4,214                4,214
Capital redemption reserve                                              8,158                8,158
Revaluation reserve                                                         -                2,335
Capital reserve                                                         6,475                6,475
Shares held by ESOP                                                     (495)                (495)
Retained earnings                                                    (17,777)             (17,947)
Total equity attributable to equity shareholders of the parent          2,808                4,973




CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2007
                                                                              2007                2006
                                                                                            (Restated)
                                                              Note           £'000               £'000
Cash flows from operating activities

Cash used in operations                                          4         (1,187)             (2,271)
Tax paid                                                                         -                (11)
Interest paid                                                                (466)               (629)

Net cash used in operating activities                                      (1,653)             (2,911)
Cash flows from investing activities
Proceeds on disposal of property, plant and equipment                        3,170               6,830
Purchases of property, plant and equipment                                   (108)               (550)

Net cash generated from investing activities                                 3,062               6,280

Cash flows from financing activities
Repayments of bank loans                                                     (251)               (230)
Repayments of loan from Trustees of pension scheme                         (2,875)               (300)
Repayments of obligations under finance leases
  and hire purchase arrangements                                             (195)               (135)
Net proceeds on issue of shares                                                  -               2,420
New other loans                                                                200                 300

Net cash (used in) generated from financing activities                     (3,121)               2,055

(Decrease) increase in cash and cash equivalents                           (1,712)               5,424

Cash and cash equivalents at beginning of year                               (705)             (5,967)
Effect of foreign exchange rates                                                91               (162)

Cash and cash equivalents at end of year                                   (2,326)               (705)




Notes



 1. The figures for the year ended 31 December 2007 and 2006 do not constitute
    statutory accounts within the meaning of S.240 of the Companies Act 1985.
    The figures for the year ended 31 December 2007 have been extracted from the
    statutory accounts for that year which have yet to be delivered to the
    Registrar of Companies and on which the auditor has issued an unqualified
    audit report.  The figures for the year ended 31 December 2006 have been
    extracted from the statutory accounts for that year which have been
    delivered to the Registrar of Companies and on which the auditor has issued
    an unqualified audit report, having been restated under International
    Financial Reporting Standards.  No statement has been made by the auditor
    under Section 237(2) or (3) of the Companies Act 1985 in respect of either
    of these sets of accounts.  This announcement was approved by the board of
    directors on 12 March 2008.



 2. The consolidated financial statements have, for the first time, been prepared
    in accordance with International Financial Reporting Standards adopted by
    the International Accounting Standards Board ('IASB') and interpretations
    issued by the International Financial Reporting Interpretations Committee of
    the IASB (together 'IFRS') as endorsed by the European Union.  The
    information in this preliminary announcement has been extracted from the
    audited financial statements for the year ended 31 December 2007 and as
    such, does not contain all information required to be disclosed in the
    financial statements prepared in accordance with International Financial
    Reporting Standards ('IFRS').



These financial statements are presented in sterling as that is the currency of
the primary economic environment in which the Group operates.



 3. (Loss) earnings per ordinary share


                                                                                2007       2006
                                                                               £'000      £'000
Analysis of the (loss) earnings in the year
(Loss) profit from continuing operations attributable to ordinary            (2,185)     27,457
shareholders
Weighted average number of ordinary shares in issue (excluding the shares     '000's     '000's
owned by the Pittards Employee Share Ownership Trust)
Basic                                                                        222,294    145,484

In 2007 and 2006 the weighted average number of ordinary shares for the
purpose of calculating the diluted earnings per ordinary share is
identical to that used for basic earnings per ordinary share.

Basic and diluted (loss) earnings per ordinary share from continuing          (1.0p)      18.9p
operations




4.   Note to the statement of cashflows


                                                                            2007           2006
                                                                           £'000          £'000
(Loss)/profit before taxation                                            (2,185)         27,470
Adjustments for:
Depreciation and amortisation                                                776            741
Profit on sale of fixed assets (excluding properties)                      (450)        (1,050)
(Gain) on derivatives                                                       (64)        (1,801)
Foreign exchange loss                                                        462            969
Bank and other interest charges                                              466            628
Issue of warrants                                                             20              -
Net interest on pension scheme liabilities                                     -            238
Provision movement                                                         (194)        (1,820)
Defined benefit cost less contributions paid                                   -       (29,924)
Working capital:
- decrease in inventories                                                    432          1,165
- decrease in receivables                                                    600          2,142
- decrease in payables                                                   (1,050)        (1,029)
Cash used in operations                                                  (1,187)        (2,271)



5.   Copies of the 2007 Annual Report and Accounts will be posted to
shareholders in April. Further copies may be obtained by contacting the Company
Secretary at Pittards plc, Sherborne Road, Yeovil, Somerset, BA21 5BA. The
annual general meeting is to be held at the registered office on 7 May 2008.




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