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Half Yearly Report

15 Jun 2011 07:00

RNS Number : 4444I

Leeds Group PLC

15 June 2011

LEEDS GROUP PLC

Interim Results for the six months ended 31st March 2011

STATEMENT BY THE GROUP CHAIRMAN, KATHRYN DAVENPORT

I am pleased to report that Leeds Group plc ("the Group") made a profit after tax of £627,000 in the six month period ended 31st March 2011, compared with £534,000 in the corresponding period of last year. It is particularly pleasing to report such positive news after a disappointing performance in the second half of the previous financial year. Earnings per share increased to 2.2 pence (2010: 1.8 pence) reflecting the increased profit and the reduced number of shares in issue.

Revenue at Hemmers Europe, the Group's German based operating subsidiary, increased to £14,641,000 (2010: £13,990,000). Sales volumes were marginally down on last year, and the increase in revenue reflects sales prices on average 10% higher than in 2010. There has been a substantial increase in the price of cotton goods, but our sales price increases have made it possible to preserve margins at close to last year's level. This, together with modest reductions in overhead expense, led to a profit before tax for Hemmers Europe of £947,000 (2010: £715,000), which included a gain on valuation of financial derivatives of £220,000 (2010: £193,000).

Although external revenue at Hemmers China was lower than last year, total revenue grew by 18% as Hemmers Europe sourced a substantially greater volume of its purchases from its Chinese operation. The directors remain satisfied with the progress being made in China.

Net asset value per share (excluding shares held in treasury) at 31st March 2011 was 46.6 pence (2010: 46.8 pence) inclusive of goodwill. During the period lower stockholding contributed to a reduction of £1,996,000 in the aggregate debt of Hemmers Europe and Hemmers China, whilst cash balances held by the holding company at the period end were £1,751,000 (2010: £2,025,000).

At 31st March 2011, the Group continues to hold an investment in Dawson International Plc ("Dawson"). The Board noted the interim results for Dawson issued in May 2011, which showed cash resources in excess of £11 million, but also a significant liability in a defined benefit pension scheme. Whilst Dawson has been active in restructuring itself during the last couple of years, the Leeds Group Board believes that any growth in the value of Dawson's shares will be subject to a satisfactory resolution of the pension scheme issues.

The Board is proceeding with a further appeal against the decision by Leeds City Council to classify the land owned by the Group at Haw Lane, Yeadon as a town or village green and a charge of £125,000 relating to the costs of the action that is expected to be heard in the near future has been made in the accounts of the parent company.

The Company has continued to use the authority granted to it to buy back shares into Treasury, although liquidity in Leeds Group shares has been limited. During the six month period, the Company purchased 250,000 shares into Treasury, and cancelled a further 500,000 shares in order to comply with Companies Act 2006 requirements. In line with previous decisions, the Board does not propose an interim dividend.

The months of April and May represent the low point in the annual business cycle when losses are to be anticipated before activity picks up in June and July and reaches a crescendo in the very busy months of August, September and October. With this in mind, the Board has decided to change the Group's accounting reference date from 30 September to 31 May so that the work involved in stocktaking, accounts preparation and audit can be accommodated with significantly less disruption to sales activity. The next Annual Report will therefore cover the eight months ending 31 May 2011.

The economic environment remains challenging, and the large increase in the price of cotton goods has led to a current order book that is less full than twelve months ago. We have taken action on sales prices aimed at protecting margins: it remains to be seen whether order levels pick up as the year progresses and it becomes clearer to customers that current price levels are not a short term phenomenon that can be avoided by delaying orders.

As ever, thanks are due to staff throughout the Group for their unstinting efforts in the period covered by this report.

Kathryn Davenport

Chairman

14 June 2011

Enquiries:
Leeds Group plc	Citigate Dewe Rogerson	Seymour Pierce Limited

Kathryn Davenport, Chairman	Fiona Tooley	Sarah Jacobs
07921 261254	Tel: 0121 362 4035 or 07785 703523	Tel: 020 7107 8000

Malcolm Wilson, Company Secretary
Tel: 07801 224618

Unaudited Consolidated Statement of Comprehensive Income

for the 6 months ended 31 March 2011

6 months to

31 March

2011

£000

6 months to

31 March

2010

£000

12 months to

30 September 2010

£000

Revenue

15,315

14,829

27,655

Cost of sales

(11,415)

(10,892)

(21,378)

Gross profit

3,900

3,937

6,277

Distribution costs

(1,162)

(1,124)

(2,064)

Administrative expenses

(1,772)

(1,969)

(3,632)

Profit from operations

966

844

581

Finance expense

(78)

(108)

(289)

Finance income

Profit before tax

895

744

307

Tax expense

(268)

(210)

(176)

Profit for the period, attributable

to the equity holders of the parent

627

534

131

Other comprehensive income:

Translation differences on foreign operations

275

(189)

(498)

Unrealised loss taken to available-for-sale reserve

(324)

Other comprehensive income for the period

275

(189)

(822)

Total comprehensive income for the period

902

345

(691)

The results shown in the income statement derive wholly from continuing operations.

There is no tax effect relating to other comprehensive income

Earnings per share for profit attributable

to the equity holders of the Company

6 months to

31 March

2011

6 months to

31 March

2010

12 months to

30 September 2010

Basic and diluted (pence)

2.2p

1.8p

0.5p

Unaudited Consolidated Balance Sheet

at 31 March 2011

	As at 31 March 2011 £000	As at 31 March 2010 £000	As at 30 September 2010 £000
Assets
Non-current assets
Property, plant and equipment	2,219	2,322	2,197
Intangible assets	987	994	959
Available-for-sale investments	971	1,295	971

Total non-current assets	4,177	4,611	4,127

Current assets
Inventories	6,205	5,900	7,377
Trade and other receivables	7,707	6,946	7,240
Derivative financial assets	-	4	-
Cash available on demand	2,332	2,533	2,192

Total current assets	16,244	15,383	16,809

Total assets	20,421	19,994	20,936

Liabilities
Non-current liabilities
Loans and borrowings	(2,161)	(2,224)	(2,150)

Total non-current liabilities	(2,161)	(2,224)	(2,150)

Current liabilities
Trade and other payables	(1,884)	(1,568)	(1,469)
Loans and borrowings	(2,628)	(2,655)	(4,394)
Corporation tax liability	(215)	(19)	(29)
Derivative financial liabilities	(186)	-	(402)

Total current liabilities	(4,913)	(4,242)	(6,294)

Total liabilities	(7,074)	(6,466)	(8,444)

TOTAL NET ASSETS	13,347	13,528	12,492

Capital and reserves attributable to equity holders of the company
Share capital	3,792	3,852	3,852
Capital redemption reserve	600	540	540
Treasury share reserve	(510)	(572)	(572)
Available-for-sale reserve	(10)	314	(10)
Foreign exchange reserve	2,043	2,077	1,768
Retained earnings	7,432	7,317	6,914

TOTAL EQUITY	13,347	13,528	12,492

Unaudited Consolidated Cash Flow Statement

for the 6 months ended 31 March 2011

	6 months to 31 March 2011 £000	6 months to 31 March 2010 £000	12 months to 30 September 2010 £000
Cash flows from operating activities
Profit for the period	627	534	131
Adjustments for:
Depreciation	114	122	221
Foreign exchange differences	(220)	(193)	228
Translation gain/(loss) on cash and cash equivalents	13	3	(19)
Finance expense	78	108	289
Finance income	(7)	(8)	(15)
Loss on sale of property, plant and equipment	17	-	10
Income tax expense	268	210	176

Cash flows from operating activities before changes in working capital and provisions	890	776	1,021

Decrease/(increase) in inventories	1,339	621	(1,088)
Increase in trade and other receivables	(266)	(108)	(642)
Increase in trade and other payables	361	238	214

Cash generated from operating activities	2,324	1,527	(495)
Income taxes paid	(88)	(186)	(147)

Net cash flows from operating activities	2,236	1,341	(642)

Investing activities
Purchase of property, plant and equipment	(118)	(143)	(224)
Sale of property, plant and equipment	23	-	21
Bank interest received	7	8	15

Net cash used in investing activities	(88)	(135)	(188)

Financing activities
Purchase of treasury shares	(47)	(49)	(49)
Proceeds from bank borrowings	-		790
Repayment of bank borrowings	(1,883)	(1,086)	-
Bank interest paid	(78)	(108)	(289)

Net cash used in financing activities	(2,008)	(1,243)	452

Net increase/(decrease) in cash and cash equivalents	140	(37)	(378)

Cash and cash equivalents at beginning of the period	2,192	2,570	2,570

Cash and cash equivalents at end of the period	2,332	2,533	2,192

Unaudited Consolidated Statement of Changes in Equity

for the six months ended 31 March 2011

	Share capital £000	Capital redemption reserve £000	Treasury share reserve £000	Available- for- sale reserve £000	Foreign exchange reserve £000	Retained earnings £000	Total equity £000

At 1 October 2010	3,852	540	(572)	(10)	1,768	6,914	12,492
Total comprehensive income*	-	-	-	-	275	627	902
Purchase of treasury shares	-	-	(47)	-	-	-	(47)
Cancellation of treasury shares	(60)	60	-	-	-	-	-
Cost of shares cancelled	-	-	109	-	-	(109)	-

At 31 March 2011	3,792	600	(510)	(10)	2,043	7,432	13,347

	Share capital £000	Capital redemption reserve £000	Treasury share reserve £000	Available- for- sale reserve £000	Foreign exchange reserve £000	Retained earnings £000	Total equity £000

At 1 October 2009	3,897	495	(605)	314	2,266	6,865	13,232
Total comprehensive income*	-	-	-	-	(189)	534	345
Purchase of treasury shares	-	-	(49)	-	-	-	(49)
Cancellation of treasury shares	(45)	45	-	-	-	-	-
Cost of shares cancelled	-	-	82	-	-	(82)	-

At 31 March 2010	3,852	540	(572)	314	2,077	7,317	13,528

	Share capital £000	Capital redemption reserve £000	Treasury share reserve £000	Available- for- sale reserve £000	Foreign exchange reserve £000	Retained earnings £000	Total equity £000

At 1 October 2009	3,897	495	(605)	314	2,266	6,865	13,232
Total comprehensive income*	-	-	-	(324)	(498)	131	(691)
Purchase of treasury shares	-	-	(49)	-	-	-	(49)
Cancellation of treasury shares	(45)	45	-	-	-	-	-
Cost of shares cancelled	-	-	82	-	-	(82)	-

At 30 September 2010	3,852	540	(572)	(10)	1,768	6,914	12,492

* The components of total comprehensive income are disclosed on page 2

The following describes the nature and purpose of each reserve within equity:

Reserve	Description and purpose

Capital redemption reserve	Amounts transferred from share capital on redemption of issued shares
Treasury share reserve	Cost of own shares held in treasury
Available-for-sale reserve	Gains/(losses) arising on financial assets classified as available-for-sale
Foreign exchange reserve	Gains/(losses) arising on retranslation of the net assets of overseas operations into sterling
Retained earnings	Cumulative net gains/(losses) recognised in the consolidated statement of comprehensive income

Interim results

for the 6 months ended 31 March 2011

Notes to the accounts

1. The financial information in this report does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.

The interim results for the six months ended 31 March 2011 and 31 March 2010 are unaudited.

The financial information for the year ended 30 September 2010 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for the year ended 30 September 2010 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for the year ended 30 September 2010 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

2. Ordinary shares of 12 pence each used in the calculation of earnings per share:

6 months to

31 March

2011

6 months to

31 March

2010

12 months to

30 September 2010

28,877,474

29,158,573

29,033,616

3. Reconciliation of movements in net debt

	6 months to 31 March 2011 £000	6 months to 31 March 2010 £000	12 months to 30 September 2010 £000

Increase/(decrease) in cash & cash equivalents	140	(37)	(378)
Proceeds from bank borrowings	-	-	(790)
Repayment of bank borrowings	1,883	1,086	-
Foreign currency translation differences on loans	(128)	127	338

Net decrease/(increase) in net debt	1,895	1,176	(830)
Net debt at beginning of period	(4,352)	(3,522)	(3,522)

Net debt at end of period	(2,457)	(2,346)	(4,352)

4. Analysis of net debt

	6 months to 31 March 2011 £000	6 months to 31 March 2010 £000	12 months to 30 September 2010 £000

Cash	2,332	2,533	2,192
Loans repayable in less than one year	(2,628)	(2,655)	(4,394)
Loans repayable in between one and five years	(2,161)	(2,224)	(2,150)

Net debt at end of period	(2,457)	(2,346)	(4,352)

Interim results

for the 6 months ended 31 March 2011

Notes to the accounts (continued)

5. Segmental information

	6 months to 31 March 2011 £000	6 months to 31 March 2010 £000	12 months to 30 September 2010 £000
External revenue
Hemmers Europe	14,641	13,990	26,301
Hemmers China	674	839	1,354

Total Group external revenue	15,315	14,829	27,655

	6 months to 31 March 2011 £000	6 months to 31 March 2010 £000	12 months to 30 September 2010 £000
Profit before tax
Hemmers Europe (local GAAP)	669	462	506
IFRS adjustment - financial derivatives	220	193	(228)
IFRS adjustment - goodwill amortisation	58	60	118

Hemmers Europe (IFRS)	947	715	396
Hemmers China	66	115	75
Unrealised profit in stock	(3)	13	5
Holding companies	(115)	(99)	(169)

Group profit before tax	895	744	307

	As at 31 March 2011 £000	As at 31 March 2010 £000	As at 30 September 2010 £000
Net assets
Hemmers Europe (local GAAP)	8,161	7,696	7,507
IFRS adjustment - financial derivatives	(186)	4	(402)
IFRS adjustment - goodwill amortisation	541	423	468

Hemmers Europe (IFRS)	8,516	8,123	7,573
Hemmers China	185	188	150
Unrealised profit in stock	(29)	(20)	(26)
Holding companies	4,675	5,237	4,795

Group net assets	13,347	13,528	12,492

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR SFAFMLFFSEIM

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19th Dec 2007	7:01 am	RNS	Final Results
15th Oct 2007	12:34 pm	RNS	Director/PDMR Shareholding
28th Sep 2007	5:20 pm	RNS	Transaction in Own Shares
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31st Mar 2006	12:01 pm	RNS	Transaction in Own Shares
27th Mar 2006	10:09 am	RNS	Transaction in Own Shares
9th Mar 2006	10:33 am	RNS	Transaction in Own Shares
1st Mar 2006	7:02 am	RNS	Transaction in Own Shares
27th Jan 2006	5:02 pm	RNS	Directorate Change
26th Jan 2006	12:55 pm	RNS	AGM Statement
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31st Oct 2005	3:08 pm	RNS	Result of EGM
14th Oct 2005	7:00 am	RNS	Disposal
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10th Jun 2005	3:39 pm	RNS	Transaction in Own Shares
27th May 2005	7:30 am	RNS	Interim Results
28th Apr 2005	4:02 pm	RNS	Holding(s) in Company

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Leeds Group Regulatory News (LDSG)

Half Yearly Report

Unaudited Consolidated Statement of Comprehensive Income

Earnings per share for profit attributable

Unaudited Consolidated Balance Sheet

Interim results

Interim results

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