Last checked at 21 May 2009 07:00
Issued on behalf of Leeds Group plc Embargoed: 7.00am
Date: 21 May 2009
LEEDS GROUP plc
Interim Results for the six months ended 31st March 2009
STATEMENT BY THE GROUP CHAIRMAN, EWEN WIGLEY
In the six month period ending on 31st March 2009, I can report that Leeds Group made a profit after tax of £134,000 (2008: £315,000). I am pleased to note that Revenue in the period increased to £13,230,000 (2008: £11,337,000). This growth arose from increased sales in our European markets, new sales from our recently established Chinese subsidiary and the effect of the weaker pound when translating overseas results. However, the challenging economic climate in which the Group operates led to reduced margins and resulted in the decrease in profitability.
The Net Assets of the Group increased by £2,081,000 during the six month period. The increase in valuation of overseas assets arising from the depreciation in sterling accounted for £1,440,000 of the Net Asset growth whilst the increase in value of the Group's holding in Dawson International Plc contributed a further £564,000. The Net Asset Value per share (excluding shares held in treasury) grew in the period by 18.9% to 47.9 pence as at 31st March 2009 (30th September 2008: 40.3 pence).
In the light of the difficult economic environment, Hemmers-Itex, the Group's sole operating business, has continued to maximise efficiency and reduce costs in order to remain competitive. The Chinese subsidiary, whilst set up as a strategic move, is already contributing to the Group's profitability and the Board considers that it should have a promising future.
At 31st March 2009 Leeds Group had investments in Dawson International Plc and European Equity Tranche Income Limited ("EETI"), both of whose shares are traded on AIM. The Board was pleased to note the improved financial results for the 2008 financial year, issued by Dawson in March 2009, and the increase in the share price. EETI announced a capital restructuring in January 2009 in order to reduce its debt and after careful consideration Leeds Group made a further investment of £200,000 as part of that process.
The Company seeks to continue to use the authority granted to it to buy back shares into Treasury, although the stock market has not presented many opportunities. During the six month period, the company purchased 400,000 shares into Treasury, and cancelled a further 450,000 shares in order to comply with Companies Act 2006 requirements.
Whilst the Board continues to look for further investments, it also remains focused on ensuring Hemmers Itex continues to perform in difficult times. In line with the Board's previous decisions, it does not propose an interim dividend.
The Board remains grateful for the hard work put in by all staff within the Group.
Given the general expectation that the European economies are unlikely to improve in the short term, the outlook for the remainder of the financial year is likely to remain challenging.
Ewen Wigley
Chairman
| Enquiries: | ||
| Leeds Group plc | Citigate Dewe Rogerson | Seymour Pierce Limited |
| Ewen Wigley, Chairman | Fiona Tooley | Sarah Jacobs |
| Tel: 07815 134466 | Tel: 0121 455 8370 or 07785 703523 | Tel: 020 7107 8000 |
| Malcolm Wilson, Company Secretary | ||
| Tel: 0113 391 9000 or 07801 224618 |
Consolidated Income Statementfor the 6 months ended 31 March 2009
| 6 months to 31 March 2009 £000 | 6 months to 31 March 2008 £000 | 12 months to 30 September 2008 £000 | |
| Revenue | 13,230 | 11,337 | 21,974 |
| Cost of sales | (10,293) | (8,644) | (16,819) |
| Gross profit | 2,937 | 2,693 | 5,155 |
| Distribution costs | (1,003) | (775) | (1,615) |
| Administrative expenses | (1,676) | (1,567) | (3,015) |
| Profit from operations | 258 | 351 | 525 |
| Finance expense | (149) | (117) | (219) |
| Finance income | 30 | 127 | 216 |
| Profit before tax | 139 | 361 | 522 |
| Tax expense | (5) | (46) | (73) |
| Profit for the year, attributable to the equity holders of the parent | 134 | 315 | 449 |
The results shown in the income statement derive wholly from continuing operations.
Earnings per share for profit attributable
to the equity holders of the company
| 6 months to 31 March 2009 | 6 months to 31 March 2008 | 12 months to 30 September 2008 | |
| Basic and diluted (pence) | 0.5 | 1.0 | 1.4 |
Consolidated Statement of Recognised Income and Expensefor the 6 months ended 31 March 2009
| 6 months to 31 March 2009 £000 | 6 months to 31 March 2008 £000 | 12 months to 30 September 2008 £000 | |
| Translation differences on foreign operations | 1,440 | 927 | 898 |
| Unrealised gains taken to available-for-sale reserve | 564 | - | 74 |
| Net income recognised directly in equity | 2,004 | 927 | 972 |
| Profit for the period | 134 | 315 | 449 |
| Total recognised income and expense for the period | 2,138 | 1,242 | 1,421 |
Consolidated Balance Sheetat 31 March 2009
| As at 31 March 2009 £000 | As at 31 March 2008 £000 | As at 30 September 2008 £000 | |
| Assets | |||
| Non-current assets | |||
| Property, plant and equipment | 2,521 | 1,755 | 2,053 |
| Intangible assets | 1,038 | 889 | 883 |
| Available-for-sale investments | 1,757 | 276 | 1,100 |
| Total non-current assets | 5,316 | 2,920 | 4,036 |
| Current assets | |||
| Inventories | 6,193 | 5,386 | 6,573 |
| Trade and other receivables | 7,294 | 5,554 | 6,662 |
| Corporation tax recoverable | 44 | 58 | 125 |
| Derivative financial assets | - | - | 28 |
| Cash available on demand | 2,222 | 3,800 | 2,486 |
| Total current assets | 15,753 | 14,798 | 15,874 |
| Total assets | 21,069 | 17,718 | 19,910 |
| Liabilities | |||
| Non-current liabilities | |||
| Loans and borrowings | (2,327) | (1,990) | (1,977) |
| Total non-current liabilities | (2,327) | (1,990) | (1,977) |
| Current liabilities | |||
| Trade and other payables | (1,384) | (1,214) | (1,676) |
| Loans and borrowings | (3,257) | (2,339) | (4,244) |
| Derivative financial liabilities | (7) | (115) | - |
| Total current liabilities | (4,648) | (3,668) | (5,920) |
| Total liabilities | (6,975) | (5,658) | (7,897) |
| TOTAL NET ASSETS | 14,094 | 12,060 | 12,013 |
| Capital and reserves attributable to equity holders of the company | |||
| Share capital | 3,918 | 4,188 | 3,972 |
| Capital redemption reserve | 474 | 204 | 420 |
| Treasury share reserve | (624) | (840) | (667) |
| Available-for-sale reserve | 638 | - | 74 |
| Foreign exchange reserve | 2,505 | 1,094 | 1,065 |
| Retained earnings | 7,183 | 7,414 | 7,149 |
| TOTAL EQUITY | 14,094 | 12,060 | 12,013 |
Consolidated Cash Flow Statementfor the 6 months ended 31 March 2009
| 6 months to 31 March 2009 £000 | 6 months to 31 March 2008 £000 | 12 months to 30 September 2008 £000 | |
| Cash flows from operating activities | |||
| Profit for the period | 134 | 315 | 449 |
| Adjustments for: | |||
| Depreciation | 108 | 79 | 161 |
| Impairment of available-for-sale investment | 107 | - | 231 |
| Foreign exchange (gain)/loss | 36 | 85 | (54) |
| Translation gain/(loss) on cash and cash equivalents | 13 | 98 | 67 |
| Finance expense | 149 | 117 | 219 |
| Finance income | (30) | (127) | (216) |
| Loss/(gain) on sale of property, plant and equipment | 4 | - | (2) |
| Income tax expense | 5 | 46 | 73 |
| Cash flows from operating activities before changes in working capital and provisions | 526 | 613 | 928 |
| Decrease/(increase) in inventories | 1,437 | 519 | (684) |
| Decrease/(increase) in trade and other receivables | 505 | (597) | (1,701) |
| (Decrease)/increase in trade and other payables | (642) | (339) | 124 |
| Cash generated from operating activities | 1,826 | 196 | (1,333) |
| Income taxes recovered/(paid) | 92 | (133) | (222) |
| Net cash flows from operating activities | 1,918 | 63 | (1,555) |
| Investing activities | |||
| Purchase of property, plant and equipment | (207) | (1,482) | (1,812) |
| Sale of property, plant and equipment | - | - | 5 |
| Purchase of available-for-sale investments | (200) | (276) | (1,257) |
| Dividend from available-for-sale investment | - | 12 | 21 |
| Bank interest received | 30 | 115 | 195 |
| Net cash used in investing activities | (377) | (1,631) | (2,848) |
| Financing activities | |||
| Purchase of treasury shares | (57) | (74) | (300) |
| Proceeds from bank borrowings | - | 716 | 4,201 |
| Repayment of bank borrowings | (1,524) | - | (1,606) |
| Bank interest paid | (149) | (117) | (219) |
| Net cash used in financing activities | (1,730) | 525 | 2,076 |
| Net (decrease)/increase in cash and cash equivalents | (189) | (1,043) | (2,327) |
| Cash and cash equivalents at beginning of the period | 2,367 | 4,694 | 4,694 |
| Cash and cash equivalents at end of the period | 2,178 | 3,651 | 2,367 |
Interim results
for the 6 months ended 31 March 2009
Notes to the accounts
1. The financial information in this report does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The interim accounts for the six months ended 31 March 2009 and 31 March 2008 are unaudited. The comparative figures for the financial year ended 30 September 2008 are not the group's statutory accounts, but have been extracted from those accounts, which have been filed with the Registrar of Companies and on which the group's auditor gave an unqualified report that did not include reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain statements under section 237 (2) or (3) of the Companies Act 1985.
2. Ordinary shares of 12 pence each used in the calculation of earnings per share:
| 6 months to 31 March 2009 | 6 months to 31 March 2008 | 12 months to 30 September 2008 | |
| 29,669,946 | 31,377,138 | 31,050,281 |
3. Statement of changes to shareholders' equity
| 6 months to 31 March 2009 £000 | 6 months to 31 March 2008 £000 | 12 months to 30 September 2008 £000 | |
| Opening shareholders' equity | 12,013 | 10,892 | 10,892 |
| Translation differences on foreign operations | 1,440 | 927 | 898 |
| Unrealised gains taken to available-for-sale reserve | 564 | - | 74 |
| Profit for the period | 134 | 315 | 449 |
| Purchase of own shares for treasury | (57) | (74) | (300) |
| Closing shareholders' equity | 14,094 | 12,060 | 12,013 |
4. Reconciliation of movements in net debt
| 6 months to 31 March 2009 £000 | 6 months to 31 March 2008 £000 | 12 months to 30 September 2008 £000 | |
| (Decrease)/increase in cash & cash equivalents | (189) | (1,043) | (2,327) |
| Proceeds from bank borrowings | - | (716) | (4,201) |
| Repayment of bank borrowings | 1,524 | - | 1,606 |
| Foreign currency translation differences on loans | (962) | (430) | (473) |
| Movement in net debt | 373 | (2,189) | (5,395) |
| Net (debt)/cash at beginning of period | (3,735) | 1,660 | 1,660 |
| Net (debt)/cash at beginning of period | (3,362) | (529) | (3,735) |