Final Results

RNS Number : 4998C

Pittards PLC

18 March 2014

 

PITTARDS plc

(AIM:PTD)

Preliminary announcement of results for the year ended 31 December 2013

	Year ended  31 December 2013			Year ended 31 December 2012
		£m			£m
Revenue		35.8			37.0
Percentage export		91%			93%
Profit on operations before finance costs		2.0			0.6
Finance costs		(0.3)			(0.3)
Profit before taxation		1.7			0.3
Net assets		16.9			15.8

Financial highlights

-               Revenue down 3%

-               Profit from trading activities before finance costs up to £2.0m (2012: £0.6m)

-               Profit before tax up to £1.7m (2012: £0.3m)

-               EBITDA up to £2.364m (2012: £1.310m)

-               Cash used in operating activities of £0.7m (2012: generated £0.2m)

-               Net assets increased to £16.9m (2012: £15.8m)

-               Gearing now 42% (2012: 36%)

Stephen Boyd, Chairman of Pittards, commented:

I am pleased to report that the recovery noted in my interim statement, following the turbulence of 2012, continued throughout 2013.

- ends -

For further information, please contact:

Stephen Boyd, Chairman                                                    Pittards plc                            Tel: [phone]

Reg Hankey, CEO                                                                Pittards plc                            Tel: [phone]

Jill Williams, Finance Director                                            Pittards plc                            Tel: [phone]

John Wakefield                                                                    WH Ireland                           Tel: [phone]

Preliminary announcement of results

For year ended 31 December 2013

Chairman's statement

I am pleased to report that the recovery noted in my interim statement, following the turbulence of 2012, continued throughout 2013.

Turnover of £35.8m represented a reduction from £37.0m in 2012, and was due to a lower proportion of commodity style leather sales where high skin prices in early 2013 had made us temporarily uncompetitive, hence the mix of products sold in 2013 produced a higher gross margin of 20.4% compared to 17.4% in 2012.  This was achieved despite hide prices staying firm all year.  This, coupled with tight control of costs in the business, led to a profit from operations before finance costs of £2.004m compared to £0.574m in 2012.

The dollar was stronger in the first half of 2013 than it had been in 2012 which was beneficial given our level of dollar denominated export sales, but the decline to nearly $1.65 at the end of the year had an adverse effect on both turnover in the final quarter and the balance sheet, which tempered the overall result somewhat.

Net finance costs were slightly higher than last year due to high skin prices in the first half of the year leading to higher borrowings in Ethiopia where interest rates are higher than in the UK, but skin prices eased to more normal levels in the second half of the year.  Profit before tax was £1.712m (2012: £0.300m) and EBITDA therefore improved to £2.364m from £1.310m in 2012.

There is a taxation charge of £0.265m for the year (2012: £0.030m representing withholding tax only).  This is principally due to the effect of changes in UK tax rate on the deferred taxation asset but as we have brought forward tax losses no tax will actually be payable in the near future.

Net assets increased again to £16.912m from £15.795m with inventory and receivables up following a busy December.  Net debt therefore rose from £5.7m to £7.1m but gearing of 41.9% (2012: 35.8%) remained well within our target of below 50%.  Our banking relationships with Lloyds in UK and Commercial Bank of Ethiopia remain strong and supportive.

Following the balance sheet restructuring in February 2013 we now have positive retained earnings of £7.492m.  The share consolidation exercise on a 1:50 basis was approved by shareholders at a general meeting in January 2014; hence we have included some statistics on both bases within this Report.  As indicated previously, payment of a dividend is now feasible as soon as it is felt appropriate for the business.

Both industrial glove and dress glove production at our Pittards Product Manufacturing (PPM) factory in Ethiopia increased and are becoming more significant to our total turnover as efficiencies continue to improve and we train more staff.

The Design Centre in Yeovil is now a fully fledged production unit making for both our Pittards and Daines & Hathaway brands and we were delighted to recently receive a New to Apprentices award in the Somerset Apprenticeship awards to reflect our efforts in recruiting apprentices for this new area of the business.  We are now looking to add to our retail presence as recognition of our brand continues to grow and the Made In Britain movement advances still further.

Our combined workforce of over 1300 across the UK and Ethiopian factories has shown great commitment during the year and it is pleasing to see our results reflect this level of effort.

Louise Cretton stepped down as a non-executive director at the end of 2013 after 12 years' valuable service and I thank her for the valuable contribution she made to the business during that time.  We were pleased to welcome Godfrey Davis, Chairman of Mulberry, onto the board in February this year and look forward to receiving his insights, particularly on the luxury leathergoods market.

The global trading situation looks brighter than it has since the recession and should provide many opportunities to grow the business and continue with our core strategy in the future.  The current relative weakness of the dollar is a concern but we will seek to mitigate its effect wherever possible.

Stephen Boyd

Chairman

17 March 2014

CONSOLIDATED INCOME STATEMENT

for the year ended 31 December 2013

	Note	2013 £'000		2012 £'000
Continuing operations:
Revenue		35,813		37,029
Cost of sales		(28,487)		(30,590)
Gross profit		7,326		6,439
Distribution costs		(2,279)		(2,389)
Administrative expenses	6	(3,043)		(3,152)
Administrative expenses - exceptional restructuring costs	6	-		(324)
Profit from operations before finance costs		2,004		574
Finance costs		(350)		(335)
Finance income		58		61
Profit before taxation		1,712		300
Taxation		(265)		(30)
Profit  for the year after taxation		1,447		270
Profit attributable to:
Owners of the parent		1,449		270
Non controlling interest		(2)		-
		1,447		270
Earnings per share attributable to the owners of the parent
Basic	3	0.31p		0.06p
Diluted	3	0.31p		0.06p

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2013

		2013 £'000		2012 £'000
Profit for the year after taxation Other comprehensive income (expense)		1,447		270
Items that will not be reclassified to profit or loss
Revaluation of land and buildings		139		266
		139		266
Items that may be subsequently reclassified to profit or loss
Unrealised exchange loss on translation of overseas subsidiaries		(469)		(776)
		(469)		(776)
Other comprehensive expenses		(330)		(510)
Total comprehensive income (expenses) for the year		1,117		(240)
Total comprehensive income (expenses) attributable to:
Owners of the parent		1,131		(215)
Non controlling interest		(14)		(25)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2013

		Share capital	Share premium account	Capital redemption reserve	Share options reserve	Capital reserve	Retained earnings	Translation reserve	Shares held by ESOP	Revaluation reserve	Total attributable to owners of the parent	Non-controlling interest	Total equity
		£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 January 2012		4, 410	5,250	8,158	48	6,475	(7,683)	(1,773)	(495)	1,211	15,601	213	15,814
Comprehensive income for the year
Profit for the year after taxation		-	-	-	-	-	270	-	-	-	270	-	270
Other comprehensive income
Gain on the revaluation of buildings		-	-	-	-	-	-	-	-	262	262	4	266
Unrealised exchange loss on  translation of foreign subsidiaries		-	-	-	-	-	-	(644)	-	(103)	(747)	(29)	(776)
Total other comprehensive (expense)  income		-	-	-	-	-	-	(644)	-	159	(485)	(25)	(510)
Total comprehensive income (expense) for the year		-	-	-	-	-	270	(644)	-	159	(215)	(25)	(240)
Transactions with owners
Proceeds from shares issued		221	-	-	-	-	-	-	-	-	221	-	221
Total transactions with owners		221	-	-	-	-	-	-	-	-	221	-	221
At 1 January 2013		4,631	5,250	8,158	48	6,475	(7,413)	(2,417)	(495)	1,370	15,607	188	15,795
Comprehensive income for the year
Profit (loss) for the year after taxation		-	-	-	-	-	1,449	-	-	-	1,449	(2)	1,447
Other comprehensive income
Gain (loss) on the revaluation of buildings		-	-	-	-	-	-	-	-	148	148	(9)	139
Unrealised exchange loss on  translation of foreign subsidiaries		-	-	-	-	-	-	(374)	-	(92)	(466)	(3)	(469)
Total other comprehensive (expense)  income		-	-	-	-	-	-	(374)	-	56	(318)	(12)	(330)
Total comprehensive income (expense) for the year		-	-	-	-	-	1,449	(374)	-	56	1,131	(14)	1,117
Transactions with owners
Reserves transfer		-	(5,250)	(8,158)	(48)	-	13,456	-	-	-	-	-	-
Total transactions with owners		-	(5,250)	(8,158)	(48)	-	13,456	-	-	-	-	-	-
At 31 December 2013		4,631	-	-	-	6,475	7,492	(2,791)	(495)	1,426	16,738	174	16,912

BALANCE SHEETS

As at 31 December 2013

			2013	2012
		Note	£'000	£'000
ASSETS
Non-current assets
Property, plant and equipment			6,095	6,165
Intangible assets			164	112
Deferred income tax asset		5	1,194	1,602
Available for sale financial instruments			2	5
Total non-current assets			7,455	7,884
Current assets
Inventories			15,441	14,287
Trade and other receivables			5,312	4,534
Cash and cash equivalents			522	817
Current income tax recoverable			84	30
Deferred income tax asset		5	606	403
Total current assets			21,965	20,071
Total assets			29,420	27,955
LIABILITIES
Current liabilities
Deferred income tax liability			(27)	-
Trade and other payables			(4,868)	(5,681)
Current income tax liability			-	-
Interest bearing loans, borrowings and overdrafts			(6,196)	(5,373)
Total current liabilities			(11,091)	(11,054)
Non-current liabilities
Interest bearing loans, borrowings and overdrafts			(1,417)	(1,106)
Total non-current liabilities			(1,417)	(1,106)
Total liabilities			(12,508)	(12,160)
Net assets			16,912	15,795
EQUITY
Share capital			4,631	4,631
Share premium account			-	5,250
Capital redemption reserve			-	8,158
Capital reserve			6,475	6,475
Shares held by ESOP			(495)	(495)
Retained earnings			7,492	(7,413)
Translation reserve			(2,791)	(2,417)
Revaluation reserve			1,426	1,370
Share options reserve			-	48
Total equity attributable to owners of the parent			16,738	15,607
Non-controlling interest			174	188
TOTAL EQUITY			16,912	15,795

STATEMENT OF CASH FLOWS

for the year ended 31 December 2013

		2013	2012
	Note	£'000	£'000
Cash flows from operating activities
Cash (used in) generated from operations	4	(685)	170
Tax paid		(63)	(69)
Interest paid		(334)	(343)
Net cash used in operating activities		(1,082)	(242)
Cash flows from investing activities
Purchases of property, plant and equipment		(358)	(639)
Purchases of intangible assets		(57)	(103)
Net cash used in investing activities		(415)	(742)
Cash flows from financing activities
Proceeds from borrowings		1,265	1,638
Repayment of bank loans		(1,029)	(609)
Repayment of obligations under finance leases and hire purchase obligations		(38)	-
Proceeds from issue of shares		-	221
Net cash generated from financing activities		198	1,250
(Decrease) increase in cash and cash equivalents		(1,299)	266
Cash and cash equivalents at beginning of the year		(3,105)	(3,412)
Exchange gains on cash and cash equivalents		16	41
Cash and cash equivalents at end of the year		(4,388)	(3,105)

   

Notes

1.         The figures for the years ended 31 December 2013 and 2012 do not constitute statutory accounts within the meaning of s434 of the Companies Act 2006.  The figures for the year ended 31 December 2013 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 2012, 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 2014.

2.             Basis of preparation

The consolidated financial statements have 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 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 2013 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.             Earnings per ordinary share

	2013	2012
	£'000	£'000
Analysis of the profit in the year
Profit for the year attributable to owners of the parent	1,449	270
Weighted average number of ordinary shares in issue (excluding the shares owned by the Pittards Employee Share Ownership Trust)	'000's	'000's
Basic	462,150	442,031
Diluted	462,150	444,188
Basic earnings per ordinary 1p share	0.31p	0.06p
Diluted earnings per ordinary 1p share	0.31p	0.06p
After share consolidation
Basic earnings per ordinary 50p share	15.68p	3.00p
Diluted earnings per ordinary 50p share	15.68p	3.00p

4.             Cash (used in) generated from operations

	GROUP
	2013	2012
	£'000	£'000
Profit before taxation	1,712	300
Adjustments for:
Depreciation of property, plant and equipment	355	730
Amortisation	5	6
Bank and other interest charges	334	343
Other non-cash items in Income Statement	(44)	104
Operating cash flows before movement in working capital	2,362	1,483
Movements in working capital (excluding exchange differences on consolidation):
Increase in inventories	(1,541)	(440)
Increase in receivables	(963)	(1,039)
(Decrease) increase in payables	(543)	166
Cash (used in) generated from operations	(685)	170

Notes - continued

5.             Taxation

The Group has recognised a deferred tax asset of £1.800m (2012: £2.005m)in respect of losses out of a total potential deferred tax asset of £2.271m (2012: £2.716m). The element of the deferred tax asset not yet recognised would be available to be utilised against future UK taxable profits. 

There was a tax charge of £0.265m (2012: £0.030m) representing the effect on the deferred taxation asset of changes in UK Corporation tax rates and withholding tax on payments of royalties from Ethiopia.

6.             Administrative expenses

Exceptional restructuring costs

The imposition of the crust tariff in Ethiopia in 2011 necessitated a redundancy exercise for production staff in 2012 plus various other exceptional costs of reorganisation which totalled £0.324m.

There were no exceptional restructuring costs in 2013.

7.             Copies of the 2013 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 15 May 2014.

 

END

 

 

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