(Alliance News) - Leeds Group PLC on Friday said Covid-19 restrictions in Germany have hurt its earnings in the second half of financial 2020 but has seen the effect of prior year cost cutting measures on its performance.
The Leeds, England-based distributor of imported fabrics reported in the six months ended November 30, it swung to a pretax profit of GBP735,000 from a GBP880,000 loss the year prior. Total group revenue in the period was GBP19,956, a 7.3% increase from GBP18,600 the previous year.
Shares in Leeds Group were up 48% at 27.40 pence in London on Friday.
Leeds Group said the profit for its German trading subsidiary Hemmers/Itex Textil Import Export GmbH for the half-year was GBP729,000, compared to a loss of GBP515,000 in 2019 and the profit for Stoff-Ideen-KMR GmbH, a subsidiary of Hemmers also based in Germany, for the same period was GBP145,000, compared to a loss of GBP251,000 the year prior.
The company said this was due to further countrywide restrictions imposed by the German government since the half-year end, which is expected to initially affect trading in both businesses from December 16 to January 31. KMR shops will be closed during this period and the business of Hemmers will be reduced, although online business will still be able to continue, it added.
"The effect of prior year cost cutting measures is now evident with a reduction in costs. Management is focused on aligning the business with sales demand and competing in markets where it can make acceptable margins," Leeds Group said.
Regarding the impact of Brexit, the company said its directors do not believe it will affect the group as its business is conducted entirely by Germany-based Hemmers and KMR, and their exports to the UK account for only 3% of group revenue.
By Zoe Wickens; zoewickens@alliancenews.com
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