Last checked at 17 Dec 2014 11:30
Leeds Group PLC
17 December 2014
Investment in Joint Venture
Leeds Group plc
(the "Company")
Leeds Group plc announces that its German subsidiary, Hemmers/Itex Textil Import Export GmbH ("Hemmers") has reached agreement to acquire 50% of the issued share capital of Stoff-Ideen-KMR GmbH ("KMR") for a consideration of €500,000 (£400,000), to be paid in cash. The transaction will be completed on 31 December 2014.
KMR is a retailer of fabric and haberdashery, operating a total of fourteen leased shops located in the states of Rhineland-Palatinate (5 shops), Baden-Württemberg (4 shops), Hesse (3 shops), Lower Saxony (1 shop) and North Rhine-Westphalia (1 shop). KMR's sales revenue in the year ended 31 December 2013 was €6,181,000, and its pre-tax profit was €392,000. The balance sheet of KMR at 31 December 2013 may be summarised as:
€
Fixed assets 86,000
Inventory and receivables 2,024,000
Trade and other payables (643,000)
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1,467,000
Net bank debt (428,000)
Shareholder loans (100,000)
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Net Assets 939,000
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The 50% shareholding not acquired by Hemmers is owned by Mr Eric Maat, and he and Mr Jörg Hemmers, the managing director of Hemmers, will comprise the board of KMR. Each has many years' experience of managing fabric retailing businesses. KMR will be operated as a joint venture and will be accounted for by Leeds Group under the equity method.
The directors of Leeds Group regard this joint venture as a logical addition to the existing fabric wholesale operations of Hemmers. KMR is a successful business which sources approximately 30% of its purchase requirements from Hemmers. That proportion may well grow over time, and there will be opportunities for synergistic savings and efficiencies from sharing warehousing facilities.
Enquiries:
Malcolm Wilson Tel: 07801 224618 Tony Rawlinson Tel: 020 7148 7900
Leeds Group plc Cairn Financial Advisers LLP