Last checked at 10 May 2010 07:00
Issued on behalf of Leeds Group plc Embargoed: 7.00am
Date: Monday, 10 May 2010
LEEDS GROUP PLC
Interim Results for the six months ended 31st March 2010
STATEMENT BY THE GROUP CHAIRMAN, EWEN WIGLEY
I am pleased to report that Leeds Group plc ("Leeds Group" or the "Company") made a profit after tax of £534,000 in the six month period ended 31st March 2010, compared with a profit of £134,000 in the corresponding period of last year. It is particularly pleasing to report such positive news after a disappointing performance in the previous financial year. Earnings per share increased to 1.8 pence (2009: 0.5 pence) as a result of both the increased profit and the reduced number of shares in issue.
Revenue at Hemmers-Itex Textil Import Export GmbH ("Hemmers"), Leeds Group's German based operating subsidiary, increased to £14,829,000 (2009: £13,230,000). As I noted in the trading statement issued on 29th March 2010, improved margins were maintained throughout the six month period and the Chinese subsidiary has performed very well. Profit before tax for Hemmers was £843,000 (2009: £147,000), which included a gain on valuation of financial derivatives of £193,000 (2009: loss £36,000) and non-recurring reorganisation costs of £89,000 (2009: nil).
Net asset value per share (excluding shares held in treasury) at 31st March 2010 was 46.8 pence (2009: 47.9 pence) inclusive of goodwill, the reduction being caused in part by the lower valuation of the available-for-sale investments. During the period debt in Hemmers was reduced by £1,161,000, whilst cash balances held by the holding company at the period end were £2,025,000 (2009: £2,047,000).
At 31st March 2010, Leeds Group continues to hold an investment in Dawson International Plc ("Dawson"). The Board noted the 2009 results for Dawson issued in March of this year, which showed an operating profit from continuing operations and a debt free cash generative company, but where there is 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.
In the 2009 Report & Accounts, I noted that the Company was seeking a judicial review of the decision by Leeds City Council to classify the land that Leeds Group owns at Haw Lane, Yeadon as town or village green. The case was heard recently and the decision went against the Company. Whilst the land value has always been treated as negligible, a provision of £61,000 has been included within head office costs to cover the costs of the action. The Board is currently taking legal advice on whether it should appeal against the decision.
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 340,000 shares into Treasury, and cancelled a further 375,000 shares in order to comply with Companies Act 2006 requirements. In line with previous decisions, the Board does not propose an interim dividend.
The Board is grateful for the hard work put in by all staff to produce these improved results, in what has remained a challenging economic environment. Whilst exchange rate movements may not be as favourable in the second half of the financial year, sales have started well and the Board looks forward to the remainder of 2010.
Ewen Wigley
Chairman
10 May 2010
| Enquiries: |
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| Leeds Group plc | Citigate Dewe Rogerson | Seymour Pierce Limited |
| Ewen Wigley, Chairman | Fiona Tooley | David Foreman |
| Malcolm Wilson, Company Secretary | Tel: 0121 362 4035 or 07785 703523 | Tel: 020 7107 8010 |
| Tel: 0113 391 9000 |
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Unaudited Consolidated Statement of Comprehensive Income
for the 6 months ended 31 March 2010|
| 6 months to 31 March 2010 £000 | 6 months to 31 March 2009 £000 | 12 months to 30 September 2009 £000 |
|
Revenue |
14,829 |
13,230 |
25,685 |
|
Cost of sales |
(10,892) |
(10,293) |
(20,114) |
|
Gross profit |
3,937 |
2,937 |
5,571 |
|
Distribution costs |
(1,124) |
(1,003) |
(2,000) |
|
Administrative expenses |
(1,969) |
(1,676) |
(3,365) |
|
Profit from operations |
844 |
258 |
206 |
|
Finance expense |
(108) |
(149) |
(270) |
|
Finance income |
8 |
30 |
40 |
|
Profit/(loss) before tax |
744 |
139 |
(24) |
|
Tax expense |
(210) |
(5) |
(120) |
|
Profit/(loss) for the period, attributable to the equity holders of the parent |
534 |
134 |
(144) |
|
Other comprehensive income: |
|
|
|
|
Translation differences on foreign operations |
(189) |
1,440 |
1,201 |
|
Unrealised gains taken to available-for-sale reserve |
- |
564 |
240 |
|
Other comprehensive income for the period |
(189) |
2,004 |
1,441 |
|
Total comprehensive income for the period |
345 |
2,138 |
1,297 |
The results shown in the income statement derive wholly from continuing operations.
There is no tax effect relating to other comprehensive income
Earnings/(loss) per share for profit/(loss)
attributable to the equity holders of the company
|
| 6 months to 31 March 2010 | 6 months to 31 March 2009 | 12 months to 30 September 2009 |
|
|
|
|
|
| Basic and diluted (pence) | 1.8p | 0.5 | (0.5) |
Unaudited Consolidated Balance Sheet
at 31 March 2010|
| As at 31 March 2010 £000 | As at 31 March 2009 £000 | As at 30 September 2009 £000 |
| Assets |
|
|
|
| Non-current assets |
|
|
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| Property, plant and equipment | 2,322 | 2,521 | 2,350 |
| Intangible assets | 994 | 1,038 | 1,014 |
| Available-for-sale investments | 1,295 | 1,757 | 1,295 |
|
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|
|
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| Total non-current assets | 4,611 | 5,316 | 4,659 |
|
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|
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| Current assets |
|
|
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| Inventories | 5,900 | 6,193 | 6,660 |
| Trade and other receivables | 6,946 | 7,294 | 6,973 |
| Corporation tax recoverable | - | 44 | 52 |
| Derivative financial assets | 4 | - | - |
| Cash available on demand | 2,533 | 2,222 | 2,574 |
|
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|
|
|
| Total current assets | 15,383 | 15,753 | 16,259 |
|
|
|
|
|
| Total assets | 19,994 | 21,069 | 20,918 |
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| Liabilities |
|
|
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| Non-current liabilities |
|
|
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| Loans and borrowings | (2,224) | (2,327) | (2,273) |
|
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| Total non-current liabilities | (2,224) | (2,327) | (2,273) |
|
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| Current liabilities |
|
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| Trade and other payables | (1,568) | (1,384) | (1,350) |
| Loans and borrowings | (2,655) | (3,257) | (3,823) |
| Corporation tax liability | (19) | - | (54) |
| Derivative financial liabilities | - | (7) | (186) |
|
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|
|
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| Total current liabilities | (4,242) | (4,648) | (5,413) |
|
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|
|
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| Total liabilities | (6,466) | (6,975) | (7,686) |
|
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|
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| TOTAL NET ASSETS | 13,528 | 14,094 | 13,232 |
| Capital and reserves attributable to equity holders of the company |
|
|
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| Share capital | 3,852 | 3,918 | 3,897 |
| Capital redemption reserve | 540 | 474 | 495 |
| Treasury share reserve | (572) | (624) | (605) |
| Available-for-sale reserve | 314 | 638 | 314 |
| Foreign exchange reserve | 2,077 | 2,505 | 2,266 |
| Retained earnings | 7,317 | 7,183 | 6,865 |
|
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|
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| TOTAL EQUITY | 13,528 | 14,094 | 13,232 |
Unaudited Consolidated Cash Flow Statement
for the 6 months ended 31 March 2010|
| 6 months to 31 March 2010 £000 | 6 months to 31 March 2009 £000 | 12 months to 30 September 2009 £000 |
| Cash flows from operating activities |
|
|
|
| Profit/(loss) for the period | 534 | 134 | (144) |
| Adjustments for: |
|
|
|
| Depreciation | 122 | 108 | 198 |
| Impairment/(reversal of impairment) of available-for-sale investment |
- |
107 |
(231) |
| Loss on sale of available-for-sale investments | - | - | 269 |
| Foreign exchange differences | (193) | 36 | 214 |
| Translation gain on cash and cash equivalents | 3 | 13 | 18 |
| Finance expense | 108 | 149 | 270 |
| Finance income | (8) | (30) | (40) |
| Loss on sale of property, plant and equipment | - | 4 | 7 |
| Income tax expense | 210 | 5 | 120 |
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|
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| Cash flows from operating activities before changes in working capital and provisions |
776 |
526 |
681 |
|
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|
|
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| Decrease in inventories | 621 | 1,437 | 859 |
| (Increase)/decrease in trade and other receivables | (108) | 505 | 649 |
| Increase/(decrease) in trade and other payables | 238 | (642) | (624) |
|
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| Cash generated from operating activities | 1,527 | 1,826 | 1,565 |
| Income taxes (paid)/recovered | (186) | 92 | 20 |
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| Net cash flows from operating activities | 1,341 | 1,918 | 1,585 |
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| Investing activities |
|
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| Purchase of property, plant and equipment | (143) | (207) | (200) |
| Sale of property, plant and equipment | - | - | 3 |
| Purchase of available-for-sale investments | - | (200) | (200) |
| Sale of available-for-sale investments | - | - | 207 |
| Bank interest received | 8 | 30 | 40 |
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| Net cash used in investing activities | (135) | (377) | (150) |
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| Financing activities |
|
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| Purchase of treasury shares | (49) | (57) | (78) |
| Repayment of bank borrowings | (1,086) | (1,524) | (884) |
| Bank interest paid | (108) | (149) | (270) |
|
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| Net cash used in financing activities | (1,243) | (1,730) | (1,232) |
|
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| Net (decrease)/increase in cash and cash equivalents |
(37) |
(189) |
203 |
|
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|
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| Cash and cash equivalents at beginning of the period | 2,570 | 2,367 | 2,367 |
|
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| Cash and cash equivalents at end of the period | 2,533 | 2,178 | 2,570 |
Interim results
for the 6 months ended 31 March 2010
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 2010 and 31 March 2009 are unaudited.
The financial information for the year ended 30 September 2009 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for the year ended 30 September 2009 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 2009 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 2010 | 6 months to 31 March 2009 | 12 months to 30 September 2009 |
|
|
|
|
|
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| 29,158,573 | 29,669,946 | 29,514,410 |
3. Statement of changes to shareholders' equity
|
| 6 months to 31 March 2010 £000 | 6 months to 31 March 2009 £000 | 12 months to 30 September 2009 £000 |
|
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| Opening shareholders' equity | 13,232 | 12,013 | 12,013 |
| Total comprehensive income for the period | 345 | 2,138 | 1,297 |
| Purchase of own shares for treasury | (49) | (57) | (78) |
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| Closing shareholders' equity | 13,528 | 14,094 | 13,232 |
4. Reconciliation of movements in net debt
|
| 6 months to 31 March 2010 £000 | 6 months to 31 March 2009 £000 | 12 months to 30 September 2009 £000 |
|
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| (Decrease)/increase in cash & cash equivalents | (37) | (189) | 203 |
| Repayment of bank borrowings | 1,086 | 1,524 | 884 |
| Foreign currency translation differences on loans | 127 | (962) | (874) |
|
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| Movement in net debt | 1,176 | 373 | 213 |
| Net debt at beginning of period | (3,522) | (3,735) | (3,735) |
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| Net debt at end of period | (2,346) | (3,362) | (3,522) |