PTD.L Regulatory News (PTD)

PITTARDS plc

(AIM:PTD)

Preliminary announcement of results for the year ended 31 December 2012

Pittards plc ("Pittards" or "the Company"), the specialist producer of technically advanced leather and luxury leather goods for sale to retailers, manufacturers and distributors, is pleased to report its audited results for the year ended 31 December 2012.

Financial highlights

- Revenue down 3%

- Profit from trading activities before restructuring costs £0.9m (2011: £3.1m)

- Profit from trading after restructuring costs £0.6m

- Cash generated by operating activities of £0.2m (2011: used £0.4m)

- Net assets stable at £15.8m

- Gearing now 36% (2011: 31%)

Stephen Boyd, Chairman of Pittards, commented:

"2012 proved to be a year of transition following the major structural changes to the business as we moved more of our core manufacturing to a lower cost location. This was accelerated by the introduction of the crust tariff in Ethiopia in late 2011 and the necessary speed of change, coupled with changes to the Ethiopian customs system (which delayed receipt of key chemicals), presented a number of challenges. These were however overcome with commitment and determination and the benefits will accrue during 2013 and beyond."

For further information, please contact:

Stephen Boyd, Chairman Pittards plc Tel: 01935 474321

Reg Hankey, CEO Pittards plc Tel: 01935 474321

Jill Williams, Finance Director Pittards plc Tel: 01935 474321

John Wakefield WH Ireland Tel: 0117 945 3470

Preliminary announcement of results

For year ended 31 December 2012

Chairman's statement

The year 2012 proved to be a year of transition following major structural changes to the business as we moved more of our core manufacturing to our lower cost operation, ETSC, in Ethiopia. These changes were accelerated by the introduction of the crust tariff in Ethiopia in late 2011 and the necessary speed of change, coupled with changes to the Ethiopian customs system (which delayed receipt of key chemicals), presented a number of challenges. These were however overcome with commitment and determination and the benefits will accrue during 2013 and beyond.

A disappointing profit of £0.9m (2011: £3.1m) was achieved before restructuring costs. There was a significant global increase in hide and skin prices over the previous year, including Ethiopian sheepskins as highlighted in our interim statement, and this adversely impacted gross margins. Prices did however progressively ease back in the second half which therefore yielded an improved performance compared to the first half.

Distribution costs of £2.4m showed improvement over 2011 (£2.8m) due in part to slightly reduced revenue but also reflecting the benefit of greater efficiencies in shipping leather direct from our Ethiopian factories to customers in the Far East, rather than via the UK. Restructuring costs arising from the structural changes totalled £0.3m leading to a profit before finance costs of £0.6m (2011: £3.1m). Finance costs of £0.335m were slightly higher than £0.292m in 2011 as the structural changes delayed some revenue income in the early part of the year and higher skin prices had to be financed but this is expected to improve in 2013.

The depreciation of the Ethiopian birr against sterling led to an unrealised exchange loss on translation of £0.776m in Other Comprehensive Income but this was partly offset by a revaluation gain of £0.266m on our three freehold properties in Ethiopia.

The small tax charge of £0.03m represents withholding tax suffered on payments of royalties from the Ethiopian business. Revenue of £37.0m shows a 3% reduction against 2011 due to delays in shipments in the early part of the year whilst we trained our Ethiopian workforce in taking leather to the finished stage and reorganised supply chains but revenue in the second half was actually 5% higher than in 2011 as we caught up the backlog of orders. Our customers bore with us through the changes and have been more than satisfied with the consistent quality of leather being produced around the group. The Yeovil factory has made good use of its extensive contacts for purchasing raw materials around the world. We are gearing up to start production of aviation leathers in the Yeovil factory in the near future which will be a useful additional income stream, and will include new technically innovative products. We will be launching our new aviation products at the Aircraft Interiors Expo in Hamburg in April.

Net assets remained consistent at £15.8m at both 2012 and 2011 year ends, with similar values for inventory and assets. Net debt rose slightly from £5.0m to £5.7m but the gearing ratio of 35.8% was in line with expectations (2011: 31.3%) and well within the target range for the business. At the end of 2012 the Company's banking relationship transferred from RBS to Lloyds TSB and included an increase in facilities of £0.5m. These enlarged facilities should enable the business to pursue opportunities for profitability more promptly.

As noted in previous statements we were working with our lawyers to restructure our balance sheet to enable the payment of dividends in the future and I am pleased to report that this process was completed and approved by the Companies Court on 27 February 2013. It is therefore not yet reflected in the balance sheet but a proforma balance sheet is included in Note 29 to the accounts. The Company is now in a position to be able to pay a dividend at such time as the Board considers it appropriate to do so from retained distributable reserves.

Our Design Centre in Yeovil continues to add to our range of premium leathergoods products branded as both Pittards and Daines & Hathaway and we are working on some exciting new collaborative ranges with UK retailers and plan to grow this area in 2013.

The workforce at our PPM glove making factories in Ethiopia is still growing and is becoming highly skilled such that we have now added dress glove making alongside the production of industrial gloves and we intend to further expand this side of the business. We have received several distinguished visitors in recent months (including Mark Simmonds, UK Minister for Africa ), all of whom are very impressed with this development in our business.

Our increasing workforce of over 1,200 employees in UK and Ethiopia continues to integrate well and I thank them for their considerable efforts and achievements during this year of key transition.

Global economic uncertainty remains a concern for all businesses but we are confident that our strong customer relationships, investment in our brands and advances into new markets will stand us in good stead as we continue to develop the Pittards business. With trading in the current year to date in line with management expectations, we are optimistic that our core strategy will lead to improved performance in the near future.

Stephen Boyd

Chairman

18 March 2012

CONSOLIDATED INCOME STATEMENT

for the year ended 31 December 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2012

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2012

 BALANCE SHEETS

As at 31 December 2012

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31 December 2012

Notes

1. The figures for the years ended 31 December 2012 and 2011 do not constitute statutory accounts within the meaning of s434 of the Companies Act 2006. The figures for the year ended 31 December 2012 have been extracted from the statutory accounts for that year which have yet to be delivered to the Registrar of Companies and on which the auditor has issued an unqualified audit report. A full Report and Accounts for the year ended 31 December 2011, on which the auditor has issued an unqualified audit report has been delivered to the Registrar of Companies. No statement has been made by the auditor under Section 498(2) or (3) of the Companies Act 2006 in respect of either of these sets of accounts.

This preliminary announcement was approved by the board of directors and authorised for issue on 18 March 2013.

2. Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards adopted by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB (together "IFRS") as endorsed by the European Union.

The consolidated financial statements have been prepared in accordance with the Companies Act 2006, applicable to companies reporting under IFRS.

The information in this preliminary statement has been extracted from the audited financial statements for the year ended 31 December 2012 and as such, does not contain all the information required to be disclosed in the financial statements prepared in accordance with the International Financial Reporting Standards ('IFRS').

3. Earnings per ordinary share

4. Cash generated from (used in) operations

5. Taxation

The Group has recognised a deferred tax asset of £2.005m (2011: £2.005m)in respect of losses out of a total potential deferred tax asset of £2.716m (2011: £3.138m). The element of the deferred tax asset not yet recognised would be available to be utilised against future UK taxable profits.

There was a small tax charge of £0.030m representing withholding tax on payments of royalties from Ethiopia.

6. Administrative expenses

Exceptional restructuring costs

The imposition of the crust tariff in Ethiopia in 2011 necessitated a redundancy exercise for production staff in 2012 plus various other exceptional costs of reorganisation which totalled £0.324m.

Adjustment to acquisition impairment

In 2011 the remaining provisions of £0.398m established on the acquisition of ETSC were released to the Income Statement as not required.

7. Copies of the 2012 Annual Report and Accounts will be posted to shareholders in April and will be available on the Company's website at www.pittardsleather.com. Further copies may be obtained by contacting the Company Secretary at Pittards plc, Sherborne Road, Yeovil, Somerset, BA21 5BA. The annual general meeting is to be held at the registered office on 16 May 2013.