Final Results

RNS Number : 6537S

Pittards PLC

21 March 2016

 

21 March 2016

Pittards plc

("Pittards" or "the Company")

Preliminary Results

for the year ended 31 December 2015

Pittards plc, the specialist producer of technically advanced leather and luxury leather goods for sale to retailers, manufacturers and distributors today announces its results for the year ended 31 December 2015.

Results in brief

	2015 £m	2014 £m
Revenue	30.5	34.7
Profit before exceptional restructuring costs and taxation	1.0	1.6
Profit before taxation	0.7	1.6
EBITDA	1.6	2.4
Net debt	6.5	7.6
Net assets	24.3	18.3
	Pence per share
Per weighted average share
Profit (basic)	3.98	12.06
Net assets per share	204.45	197.99
Gearing	27%	42%

Strategic and operational highlights:

·      Successful placing and open offer raised net £5.3m.

·      Secured the purchase of the freehold of the Group's UK manufacturing and head office site in Yeovil.

·      Board restructured.

Stephen Boyd, Chairman commented:

"2015 was a pivotal year for Pittards in which we made significant strategic and operational progress.

"Financially, we delivered a resilient performance and remained profitable despite a challenging macro environment throughout the year, which is testament to our tight cost controls.

"The Board's aim continues to be to deliver shareholder value. It is expected that the short term performance will reflect the reduced demand for leather. However, the Company now has the financial resources to invest in delivering its strategic priorities and the Board remains confident that the steps the Company is taking will enable it to better address challenges and grasp future growth opportunities."

For further information please contact: 

Pittards plc	www.pittardsleather.com
Stephen Boyd, Chairman	[phone]
Reg Hankey, CEO
Jill Williams, Finance Director
WH Ireland Limited	www.wh-ireland.co.uk
John Wakefield/Ed Allsopp	[phone]

CHAIRMAN'S STATEMENT TO SHAREHOLDERS

2015 was a pivotal year for Pittards in which we made significant strategic and operational progress. Financially, we delivered a resilient performance and remained profitable despite a challenging macro environment throughout the year, which is testament to our tight cost controls.

The net £5.3m raised through a placing and open offer in June 2015 enabled the Company to take advantage of the opportunity to secure the freehold of the Group's UK manufacturing and head office site in Yeovil and removed previous investment constraints by generating more headroom within our banking facilities. It also refreshed our shareholder register.

RESULTS

Revenue was down 12% to £30.5m in part due the continued lack of demand for dress glove leathers as a consequence of the unprecedented fourth mild winter globally in the period leading up to Christmas.  In addition military and sports leather demand was subdued. However, the UK Consumer division experienced a small improvement in turnover this year to £1.2m versus £1.05m in 2014. During the year we re-launched the website and opened a new shop towards the end of the year. The nascent success of both of these validates our strategy to raise the profile of our consumer brand.

The exceptional restructuring costs relate to the consolidation of the UK Consumer Division on the Yeovil site (including the costs of closing the Walsall site), the costs of restructuring the main board and some residual expenses relating to the purchase of the Ethiopian Leather Division business in 2009.

The tax charge reduced from £0.479m to £0.184m as there was a one-off charge in Ethiopia last year as explained in the 2014 Chairman's Statement. This year the charge mainly relates to deferred tax arising from a reduction in UK tax rate.

Post the fundraising, gearing has fallen to 27% from 42% in 2014. The Company ended the year with net debt reducing to £6.5m (2014: £7.6m) of which the mortgage relating to the purchase of the Yeovil factory was £2m (2014: nil).

MARKET CONDITIONS

In 2015, global economic activity remained subdued. Growth in emerging market and developing economies declined for the fifth consecutive year, while a modest recovery continued in advanced economies. According to the IMF's World Economic Outlook, global growth is projected to be up from 3.1% in 2015 to 3.4% in 2016 and 3.6 % in 2017 with the pickup projected to be more gradual in emerging market and developing economies.

The demand for leather has continued to be impacted by these trends and is currently muted. However, we are beginning to see the benefits from lower raw material prices.

TEAM

It has been a privilege to work within the Company and in my final letter as Chairman, I would like to express my gratitude to all staff and management for their support, advice and contribution during my 12 years in this role. The successes and progress made over recent years reflect the dedication and passion of Pittards' employees

BOARD CHANGES

There were a significant number of changes to the Board during the year.

Jan Holmstrom, who had been a non-executive director for 5 years, stepped down from the Board in May 2015. Louise Cretton joined the Board in August 2015, strengthening its marketing experience.

As previously announced, Stephen Yapp will become my successor as Chairman in May 2016. He joined the Board as a non-executive director in June 2015 bringing with him a wealth of experience of working as a plc Chairman, which will serve the Company well in the future.

In February 2016, Jill Williams announced her intention to resign as Group Finance Director after 8 years in the post and 26 years in the Company. Jill will remain until a suitable successor can be recruited to ensure an orderly transition. She will then become a non-executive director and the Board is delighted that her experience will be retained.

The Board restructuring is now complete and I am confident that this has the right mix of skills and experience to take the Company through its next phase of development.

OUTLOOK

The Board's aim continues to be to deliver shareholder value. It is expected that the short term performance will reflect the reduced demand for leather. However, the Company now has the financial resources to invest in delivering its strategic priorities and the Board remains confident that the steps the Company is taking will enable it to better address challenges and grasp future growth opportunities.

Stephen Boyd

Chairman

18 March 2016

CONSOLIDATED INCOME STATEMENT

for the year ended 31 December 2015

	Note	2015 £'000		2014 £'000
Continuing operations:
Revenue		30,523		34,729
Cost of sales		(23,902)		(27,696)
Gross profit		6,621		7,033
Distribution costs		(1,919)		(2,001)
Administrative expenses		(3,275)		(3,061)
Administrative expenses - exceptional restructuring costs	3	(312)		-
Profit from operations before finance costs		1,115		1,971
Finance costs		(484)		(427)
Finance income		24		45
Profit before taxation		655		1,589
Taxation	6	(184)		(479)
Profit  for the year after taxation		471		1,110
Profit attributable to:
Owners of the parent		474		1,115
Non controlling interest		(3)		(5)
		471		1,110
Earnings per share attributable to the owners of the parent
Basic	4	3.98p		12.06p
Diluted	4	3.88p		12.06p

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2015

		2015 £'000		2014 £'000
Profit for the year after taxation Other comprehensive income		471		1,110
Items that will not be reclassified to profit or loss
Revaluation of land and buildings		195		245
		195		245
Items that may be subsequently reclassified to profit or loss
Unrealised exchange gain on translation of overseas subsidiaries		58		41
		58		41
Other comprehensive income		253		286
Total comprehensive income for the year		724		1,396
Total comprehensive income (expense) attributable to:
Owners of the parent		717		1,398
Non controlling interest		7		(2)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2015

	Share capital	Share premium account	Capital reserve	(Accumulated losses) Retained earnings	Translation reserve	Shares held by ESOP	Revaluation reserve	Total equity attributable to owners of the parent	Non-controlling interest	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 January 2014	4,631	-	6,475	7,492	(2,791)	(495)	1,426	16,738	174	16,912
Comprehensive income for the year:
Profit (loss) for the year after taxation	-	-	-	1,115	-	-	-	1,115	(5)	1,110
Other comprehensive income:
Gain on the revaluation of buildings	-	-	-	-	-	-	242	242	3	245
Unrealised exchange gain on  translation of foreign subsidiaries	-	-	-	-	41	-	-	41	-	41
Total other comprehensive income	-	-	-	-	41	-	242	283	3	286
Total comprehensive income (expense) for the year	-	-	-	1,115	41	-	242	1,398	(2)	1,396
At 1 January 2015	4,631	-	6,475	8,607	(2,750)	(495)	1,668	18,136	172	18,308
Comprehensive income for the year:
Profit (loss) for the year after taxation	-	-	-	474	-	-	-	474	(3)	471
Other comprehensive income:
Gain on the revaluation of buildings	-	-	-	-	-	-	172	172	10	182
Unrealised exchange gain on  translation of foreign subsidiaries	-	-	-	-	58	-	13	71		71
Total other comprehensive income	-	-	-	-	58	-	185	243	10	253
Total comprehensive income for the year	-	-	-	474	58		185	717	7	724
Transactions with owners
Proceeds from shares issued	2,313	2,984	-	-	-	-	-	5,297	-	5,297
Total transactions with owners	2,313	2,984	-	-	-	-	-	5,297	-	5,297
At 31 December 2015	6,944	2,984	6,475	9,081	(2,692)	(495)	1,853	24,150	179	24,329

BALANCE SHEET

As at 31 December 2015

		2015	2014
	Note	£'000	£'000
ASSETS
Non-current assets
Property, plant and equipment		10,679	6,560
Intangible assets		273	187
Deferred income tax asset	6	1,586	1,636
Available for sale financial instruments		-	2
Total non-current assets		12,538	8,385
Current assets
Inventories		18,872	17,796
Trade and other receivables		4,017	4,896
Cash and cash equivalents		485	529
Current income tax recoverable		26	-
Deferred income tax asset	6	90	164
Total current assets		23,490	23,385
Total assets		36,028	31,770
LIABILITIES
Current liabilities
Deferred income tax liability		(92)	(64)
Trade and other payables		(4,664)	(5,097)
Current income tax liability		-	(171)
Interest bearing loans, borrowings and overdrafts		(3,806)	(6,877)
Total current liabilities		(8,562)	(12,209)
Non-current liabilities
Interest bearing loans, borrowings and overdrafts		(3,137)	(1,253)
Total non-current liabilities		(3,137)	(1,253)
Total liabilities		(11,699)	(13,462)
Net assets		24,329	18,308
EQUITY
Share capital		6,944	4,631
Share premium		2,984	-
Capital reserve		6,475	6,475
Shares held by ESOP		(495)	(495)
Retained earnings		9,081	8,607
Translation reserve		(2,692)	(2,750)
Revaluation reserve		1,853	1,668
Total equity attributable to owners of the parent		24,150	18,136
Non-controlling interest		179	172
TOTAL EQUITY		24,329	18,308

STATEMENT OF CASH FLOWS

for the year ended 31 December 2015

		2015		2014
	Note	£'000		£'000
Cash flows from operating activities
Cash generated from operations	5	962		744
Tax paid		(183)		(151)
Interest paid		(447)		(451)
Net cash generated from operating activities		332		142
Cash flows from investing activities
Purchases of property, plant and equipment		(4,350)		(607)
Purchases of intangible assets		(108)		(35)
Net cash used in investing activities		(4,458)		(642)
Cash flows from financing activities
Proceeds from borrowings		3,651		1,063
Repayment of bank loans		(1,733)		(680)
New finance lease obligations		35		-
Repayment of obligations under finance leases and hire purchase obligations		(42)		(45)
Proceeds from share issue (net of costs)		5,297		-
Net cash generated financing activities		7,208		338
Increase (decrease) in cash and cash equivalents		3,082		(162)
Cash and cash equivalents at beginning of the year		(4,551)		(4,388)
Exchange gains on cash and cash equivalents		(5)		(1)
Cash and cash equivalents at end of the year		(1,474)		(4,551)

Notes

1.          The figures for the years ended 31 December 2015 and 2014 do not constitute statutory accounts within the meaning of s434 of the Companies Act 2006.  The figures for the year ended 31 December 2015 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.  A full Report and Accounts for the year ended 31 December 2014, on which the auditor has issued an unqualified audit report has been delivered to the Registrar of Companies. No statement has been made by the auditor under Section 498(2) or (3) of the Companies Act 2006 in respect of either of these sets of accounts.

This preliminary announcement was approved by the board of directors and authorised for issue on 18 March 2016.

2.             Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards adopted by the European Union ("IFRS") and IFRIC interpretations in issue at the balance sheet date.

The consolidated financial statements have been prepared in accordance with the Companies Act 2006, applicable to Companies reporting under IFRS.

The information in this preliminary statement has been extracted from the audited financial statements for the year ended 31 December 2015 and as such, does not contain all the information required to be disclosed in the financial statements prepared in accordance with the International Financial Reporting Standards ('IFRS').

3.             Exceptional items

	2015	2014
	£'000	£'000
Administrative expenses - exceptional restructuring costs	312	-

The exceptional restructuring costs relate to the consolidation of the UK Consumer Division on the Yeovil site (including the costs of closing the Walsall site), the costs of restructuring the main board and some residual expenses relating to the purchase of the Ethiopian Leather Division business in 2009.

4.             Earnings per ordinary share

	2015	2014
	£'000	£'000
Analysis of the profit in the year
Profit for the year attributable to owners of the parent	474	1,115
Weighted average number of ordinary shares in issue (excluding the shares owned by the Pittards Employee Share Ownership Trust)	'000's	'000's
Basic	11,900	9,243
Diluted	12,201	9,243

Basic earnings per ordinary 50p share	3.98p	12.06p
Diluted earnings per ordinary 50p share	3.88p	12.06p

Notes - continued

5.             Cash generated from operations

	2015	2014
	£'000	£'000
Profit before taxation	655	1,589
Adjustments for:
Depreciation of property, plant and equipment	456	407
Amortisation	22	12
Bank and other interest charges	447	451
Other non-cash items in Income Statement	(47)	(31)
Operating cash flows before movement in working capital	1,533	2,428
Movements in working capital (excluding exchange differences on consolidation):
Increase in inventories	(1,003)	(2,328)
Decrease in receivables	911	437
(Decrease) increase in payables	(479)	207
Cash generated from operations	962	744

6.                     Taxation

The Group has recognised a deferred tax asset of £1.676m (2014: £1.800m) in respect of losses out of a total potential deferred tax asset of £1.676m (2014: £1.990m).

There was a tax charge of £0.184m (2014: £0.479m) representing a deferred tax charge arising from changes to the UK tax rate and withholding tax on payments of royalties from Ethiopia.

7.             Copies of the 2015 Annual Report and Accounts will be posted to shareholders in April and will be available on the Company's website at www.pittardsleather.com. 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 16 May 2016.

 

END

 

 

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