Leeds Group Regulatory News (LDSG)

2 Jun 2008 07:00



Issued on behalf of Leeds Group plc Embargoed: 7.00am

Date: 2 June 2008

Leeds Group plc

Interim Results for the six months ended 31st March 2008

STATEMENT BY THE GROUP CHAIRMAN, EWEN WIGLEY

Group Results

I am pleased to report that the group's profit before tax for the six months ended 31 March 2008 was £361,000, which compares with £393,000 in the corresponding period of last year.

This is the first set of reported results prepared in accordance with International Financial Reporting Standards ("IFRS"). Comparative results for the six months ended 31 March 2007 and the year ended 30 September 2007 have been restated in accordance with IFRS and restated profit before tax for these periods is higher by £43,000 and £70,000 respectively than the figures previously announced under UK GAAP. The transition to IFRS represents an accounting change only and the underlying performance of the group and its cash flows are unaffected. The Restatement of Financial Information under IFRS released by the group on 30 May 2008 can be seen on the group's website and contains full reconciliations between UK GAAP and IFRS balance sheets at 1 October 2006, 31 March 2007 and 30 September 2007 and between UK GAAP and IFRS income statements for the six months ended 31 March 2007 and the year ended 30 September 2007, together with the accounting policies that have been adopted. 

In the 2007 Report & Accounts, I referred to the opportunity available to the Hemmers-Itex business as a result of the demise of a competitor. Hemmers-Itex has undertaken selective recruitment of experienced staff at its headquarters and agents, both inside and outside Germany, in order to achieve growth in sales. The warehousing and office facilities in Nordhorn, Germany have been expanded to accommodate all personnel on site and improve stock handling. I am pleased to report that sales grew by 15.8% in Euro terms to EUR 14,239,000 (2007: EUR 12,291,000). The increased overhead and interest charges at Hemmers-Itex held back profitability, but the Board believes that the investment is for future growth and will bring rewards in due course.

With the sole operating business of the company based in Germany, the strength of the Euro against Sterling has had a positive impact on the group's results. Over the six month period covered by this report, the Euro appreciated against Sterling by some 12.4%, increasing on re-translation the group's opening net assets by £927,000, and increasing Hemmers-Itex sales and profits by £1,407,000 and £25,000 respectively. 

The earnings per share of 1.0 pence per share (2007: 0.7 pence) reflects a lower effective tax rate arising because a higher proportion of profits were made in parts of the Group where no tax was payable, as well as a reduction in the weighted average number of shares in issue.

The company has continued with its share buyback programme, purchasing 380,000 shares in the first six months of the year. Following the renewal of the authority to buy back shares at the Annual General Meeting the Board intends to continue to make purchases whenever the opportunity arises. In line with the Board's previous decisions, it does not propose an interim dividend.

On 22 May 2008 the Company announced it had acquired approximately 29% of Dawson International plc. During the period, the company also made an investment in one million shares of European Equity Tranche Income Ltd. These investments are consistent with the intention of the Board to maximise the long-term value of the group, and we continue to look for other acquisitions or investments that will strengthen the group and benefit shareholders.

Leeds Group plc

Interim Results

Consolidated Income Statement

Leeds Group plc

Interim Results

Consolidated Balance Sheet

Leeds Group plc

Interim Results

Consolidated Cash Flow Statement

Leeds Group plc

Interim Results

Notes to the accounts

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 2008 and 31 March 2007 are unaudited. The comparative figures for the financial year ended 30 September 2007 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. Comparative results for the six months ended 31 March 2007 and the year ended 30 September 2007 have been restated in accordance with International Financing Reporting Standards (IFRS). Full reconciliations between UK GAAP and IFRS balance sheets at 1 October 2006, 31 March 2007 and 30 September 2007 and between UK GAAP and IFRS income statements for the six months ended 31 March 2007 and for the year ended 30 September 2007, together with the accounting policies adopted, are set out in the Restatement of Financial Information under IFRS released by the group on 30 May 2008.

3. Earnings per share have been calculated on an average of 31,377,138 (2007: 34,669,647) ordinary shares of 12 pence each in issue during the period.

 4. The table below sets out a reconciliation of movement in equity