TIDMLDSG
RNS Number : 7530L
Leeds Group PLC
15 January 2021
Issued on behalf of Leeds Group plc Embargoed: 7.00am
Date: 15 January 2021
Leeds Group plc
("Leeds Group" or the "the Group")
Unaudited Interim Results for the six months ended 30 November
2020
The unaudited interim results of Leeds Group plc ("Leeds Group"
or "the Group") for the six months ended 30 November 2020 are
presented as follows:
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 (MAR) and has been arranged
for release by Jan G Holmstrom, Chairman. The Directors of the
Company accept responsibility for the content of this
announcement.
Enquiries:
Leeds Group plc Cairn Financial Advisers LLP
Dawn Henderson - 01937 547877 Liam Murray/Sandy Jamieson - 020 7213 0880
Chairman's Statement
The business of the Group is that of a wholesaler and retailer
of fabrics and haberdashery and is conducted by its German trading
subsidiary Hemmers/Itex Textil Import Export GmbH ("Hemmers") and
Stoff-Ideen-KMR GmbH ("KMR"), a subsidiary of Hemmers also based in
Germany. The Chinese subsidiary of Hemmers, Chinoh-Tex Ltd
("Chinoh-Tex") ceased trading in November 2019 and was liquidated
in the financial year to 31 May 2020, as such it has been regarded
as a discontinued operation in the previous year's figures within
these financial statements.
The Group achieved sales from continuing operations in the
period of GBP19,956,000 (2019: GBP18,600,000). Even though the
Covid-19 situation is still impacting the global economy, sales for
Hemmers and KMR in the first six months of the financial year have
been higher than expected, with sales at Hemmers increasing to
GBP15,598,000 (2019: GBP14,525,000) and KMR sales increasing to
GBP4,358,000 (2019: GBP4,075,000). Since the half year end, there
have been further countrywide restrictions imposed by the German
government, which at present is expected to initially affect
trading in both businesses from 16 December 2020 to 31 January
2021. KMR shops will be closed during this period and the business
of Hemmers will be reduced, although online business will still be
able to continue. Hemmers and KMR management will work hard to
manage the situation and reduce all costs as far as possible given
the reduced level of trading and both companies should benefit from
any government financial support provided.
The Group made a profit from continuing operations after tax of
GBP735,000 (2019: loss of GBP712,000). The earnings per share from
continuing activities was 2.6 pence (2019: loss per share 2.6
pence). The profit for Hemmers for the half year was GBP729,000
(2019: loss of GBP515,000) and the profit for KMR for the half year
was GBP145,000 (2019: loss of GBP251,000). The effect of prior year
cost cutting measures is now evident with a reduction in costs.
Management is focused on aligning the business with sales demand
and competing in markets where it can make acceptable margins.
On 31 December 2020, the UK left the European Union having
secured a deal acceptable to both the UK and the European Union. As
advised in previous announcements, the Directors' do not believe
this will impact the Group as the business of Leeds Group is
conducted entirely by Hemmers and KMR both of which are
incorporated in Germany, and their exports to the UK account for
only approximately 3% of Group revenue.
Group net bank debt, as analysed in note 3, was GBP4,034,000 as
at 30 November 2020 (30 November 2019: GBP6,843,000; 31 May 2020:
GBP3,517,000). In accordance with the newly introduced IFRS 16 with
regard to accounting for leases, right-of-use assets, finance lease
liabilities of GBP1,968,000 have been recognised as at 30 November
2020. (30 November 2019: GBP2,707,000; 31 May 2020:
GBP2,405,000).
I would like to thank all employees throughout the Group for
their continued hard work and support.
Jan G Holmstrom
Chairman
15 January 2021
Unaudited Consolidated Statement of Comprehensive Income
for the six months ended 30 November 2020
6 months 6 months Year to
to to 31 May
30 November 30 November 2020
2020 2019 GBP000
GBP000 GBP000
------------------------------------------- -------------- -------------- --------------------
Continuing operations
Revenue 19,956 18,600 35,067
Cost of sales (15,371) (15,039) (29,039)
Gross profit 4,585 3,561 6,028
Distribution costs (1,442) (1,561) (2,876)
Administrative costs (2,293) (2,741) (4,908)
Profit/(loss) from operations 850 (741) (1,756)
Finance expense (115) (139) (260)
Profit/(loss) before tax 735 (880) (2,016)
Taxation - 168 (6)
Profit/(loss) from continuing operations 735 (712) (2,022)
Discontinued operations (Loss)
from discontinued operations - (416) (332)
Profit/(loss) for the period/year
attributable to the equity holders
of the Parent Company 735 (1,128) (2,354)
Other comprehensive (loss)/income
for the period/year (63) (406) 196
Total comprehensive profit/(loss)
for the period/year attributable
to the equity holders of the Company 672 (1,534) (2,158)
=========================================== ============== ============== ====================
Earnings/(loss) per share for profit attributable to the equity
holders of the Company
6 months 6 months Year to
to to 31 May
30 November 30 November 2020
2020 2019
------------------------------------------ -------------- -------------- ----------
Basic and diluted total earnings/(loss)
per share (pence) 2.6p (4.1)p (8.6)p
========================================== ============== ============== ==========
Basic and diluted earnings/(loss)
from continuing operations per
share (pence) 2.6p (2.6)p (7.4)p
========================================== ============== ============== ==========
Basic and diluted (loss)
from discontinued operations per
share (pence) - (1.5)p (1.2)p
========================================== ============== ============== ==========
Unaudited Consolidated Statement of Financial Position
at 30 November 2020
As at As at As at
30 November 30 November 31 May
2020 2019 2020
GBP000 GBP000 GBP000
--------------------------------- -------------- -------------- ----------
Assets
Non-current assets
Property, plant and equipment 8,104 8,043 8,183
Right-of-use assets 1,962 2,695 2,374
Investment property - 965 -
Intangible assets 66 69 67
Total non-current assets 10,132 11,772 10,624
--------------------------------- -------------- -------------- ----------
Current assets
Inventories 10,851 12,245 10,188
Trade and other receivables 3,862 4,486 3,464
Corporation tax recoverable 77 778 206
Derivative financial asset - 5 -
Cash and cash equivalents 905 1,331 1,104
Total current assets 15,695 18,845 14,962
--------------------------------- -------------- -------------- ----------
Total assets 25,827 30,617 25,586
================================= ============== ============== ==========
Liabilities
Non-current liabilities
Loans and borrowings (1,751) (2,027) (1,950)
Lease liabilities (1,075) (1,747) (1,478)
Total non-current liabilities (2,826) (3,774) (3,428)
--------------------------------- -------------- -------------- ----------
Current liabilities
Trade and other payables (2,532) (3,429) (2,877)
Loans and borrowings (3,188) (6,147) (2,671)
Lease liabilities (893) (960) (927)
Derivative financial liability (33) - -
Provisions (100) (100) (100)
Total current liabilities (6,746) (10,636) (6,575)
--------------------------------- -------------- -------------- ----------
Total liabilities (9,572) (14,410) (10,003)
================================= ============== ============== ==========
TOTAL NET ASSETS 16,255 16,207 15,583
================================= ============== ============== ==========
Capital and reserves attributable
to
equity holders of the company
------------------------------------ ---- -------- -------- --------
Share capital 3,792 3,792 3,792
Capital redemption reserve 600 600 600
Treasury share reserve (807) (807) (807)
Foreign exchange reserve 2,678 2,139 2,741
Retained earnings 9,992 10,483 9,257
TOTAL EQUITY 16,255 16,207 15,583
===================================== ============= ======== ========
Unaudited Consolidated Cash Flow Statement
for the six months ended 30 November 2020
6 months 6 months Year to
to to 31 May
30 November 30 November 2020
2020 2019 GBP000
GBP000 GBP000
------------------------------------------ -------------- -------------- -----------
Cash flows from operating activities
Profit/(loss) for the period/year 735 (1,128) (2,354)
Adjustments for:
Depreciation of property, plant
and equipment 381 393 723
Depreciation of right-of-use assets 447 448 876
Depreciation of investment property - 9 13
Amortisation of intangible assets - - 6
Finance expense - interest on bank
loans 80 95 174
Finance expense - interest lease
liabilities 35 44 86
Movement in derivative financial
assets 33 (5) -
(Gain)/loss on sale of fixed assets (30) 5 (32)
Taxation (credit)/expense - (168) 6
Cash flows generated from/(used
in) operating activities before
changes in working capital and
provisions 1,681 (307) (502)
(Increase)/decrease in inventories (713) (944) 1,735
(Increase)/decrease in trade and
other receivables (416) (159) 965
(Decrease)/increase in trade and
other payables (323) 888 38
Cash generated from/(used in) operating
activities 229 (522) 2,236
Taxation received 134 93 519
Net cash flows generated from/(used
in) operating activities 363 (429) 2,755
========================================== ============== ============== =============
Investing activities
Purchase of property, plant and
equipment (347) (217) (560)
Proceeds from sale of fixed assets 38 6 1,317
Net cash (used in)/generated from
investing activities (309) (211) 757
========================================== ============== ============== =============
Financing activities
Bank borrowings drawdown/(repaid) 339 1,533 (2,378)
Repayment of principal on lease
liabilities (475) (436) (840)
Repayment of interest on lease
liabilities (35) (44) (86)
Bank interest paid (80) (95) (174)
Net cash (used by)/generated from
financing activities (251) 958 (3,478)
========================================== ============== ============== =============
Net (decrease)/increase in cash
and cash equivalents (197) 318 34
Translation (loss)/gain on cash
and cash equivalents (2) (52) 5
Cash and cash equivalents at beginning
of period/year 1,104 1,065 1,065
Cash and cash equivalents at end
of period/year 905 1,331 1,104
========================================== ============== ============== =============
Unaudited Consolidated Statement of Changes in Equity
for the six months ended 30 November 2020
Share Capital Treasury Foreign Retained Total
capital redemption share exchange earnings equity
reserve reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------ ---------- ------------- ---------- ----------- ----------- ---------
At 1 June 2020 3,792 600 (807) 2,741 9,257 15,583
Profit for the period - - - - 735 735
Other comprehensive
loss - - - (63) - (63)
At 30 November 2020 3,792 600 (807) 2,678 9,992 16,255
======================== ========== ============= ========== =========== =========== =========
Share Capital Treasury Foreign Retained Total
capital redemption share exchange earnings equity
reserve reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------- ---------- ------------- ---------- ----------- ----------- ----------
At 1 June 2019 3,792 600 (807) 2,545 11,611 17,741
Loss for the period - - - - (1,128) (1,128)
Other comprehensive
loss - - - (406) - (406)
At 30 November 2019 3,792 600 (807) 2,139 10,483 16,207
====================== ========== ============= ========== =========== =========== ==========
Share Capital Treasury Foreign Retained Total
capital redemption share exchange earnings equity
reserve reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------- ---------- ------------- ---------- ----------- ----------- ---------
At 1 June 2019 3,792 600 (807) 2,545 11,611 17,741
Loss for the year - - - - (2,354) (2,354)
Other comprehensive
income - - - 196 - 196
At 31 May 2020 3,792 600 (807) 2,741 9,257 15,583
====================== ========== ============= ========== =========== =========== =========
The following describes the nature and purpose of each reserve
within equity:
Reserve Description and purpose
------------------------ -----------------------------------------------------
Capital redemption Amounts transferred from share capital on redemption
reserve of issued shares
Treasury share reserve Cost of own shares held in treasury
Foreign exchange Gains/(losses) arising on retranslation of
reserve the net assets of overseas operations into
sterling
Retained earnings Cumulative net gains/(losses) recognised in
the consolidated statement of comprehensive
income after deducting the cost of cancelled
treasury shares
Notes to the Interim Results
for the six months ended 30 November 2020
1. Basis of preparation
This announcement has been prepared in accordance with
International Financial Reporting Standards, International
Accounting Standards and Interpretations (collectively IFRS) issued
by the International Accounting Standards Board (IASB) as adopted
by the European Union ("adopted IFRS"), and with the Companies Act
2006 applicable to companies reporting under IFRS.
Going Concern
When considering its opinion about the application of the going
concern basis of preparation of the interim results, the Directors
have given due consideration to the historic performance of the
Group, the robustness of forecasts prepared for the period to 31
May 2022, the ongoing impact of the Covid-19 pandemic on the
business, its suppliers and its customers, the financing facilities
available to the Group and the circumstances in which these could
be limited or withdrawn.
Forecasts were prepared for the period to 31 May 2022 which
indicate a return to profit over the period. These forecasts were
prepared in the knowledge of current Covid-19 conditions and
assumed that there would be no protracted period of total lockdown.
Both Hemmers and KMR are located in Germany and both businesses
responded well to the Covid-19 outbreak in March 2020, KMR was
directly impacted by the first countrywide lockdown measures put in
place in Germany with all stores having to close. After the first
lockdown, KMR stores performed ahead of both last year and
forecast. Hemmers saw significantly reduced demand during the first
lockdown but like KMR, has traded strongly in the first half of the
current year, ahead of last year and forecast. Since the
countrywide lockdown on 16 December 2020, KMR stores have closed
again and Hemmers have again seen reduced trading. Hemmers and KMR
management are now working hard to manage the effects on the
businesses of the second lockdown in the same way as they did
during the first lockdown and will again benefit from any
government financial support provided.
Bank debt has reduced in the first half and the businesses are
trading within their banking facilities. The Directors have
prepared sensitivities on these forecasts and will continually
review the current situation with regard to the Covid-19 pandemic,
but the Directors are of the currently available facilities will be
sufficient for all the various scenarios.
Considering the progress made to restructure the Group, the
trading results in the first half of the current financial year,
the likely ongoing impact of the Covid-19 pandemic and the headroom
available on the Hemmers working capital facility, the Directors
are of the opinion that it is appropriate to apply the going
concern basis of preparation to the financial statements.
2. Profit/(loss) per share
Ordinary shares of 12 pence each used in the calculation of
earnings per share:
6 months 6 months Year to
to to 31 May
30 November 30 November 2020
2020 2019
------------------------------ -------------- -------------- ------------
Number of shares (basic and
diluted) 27,320,843 27,320,843 27,320,843
============================== ============== ============== ============
3. Analysis of net bank debt
6 months 6 months Year to
to to 31 May
30 November 30 November 2020
2020 2019 GBP000
GBP000 GBP000
-------------------------------------- -------------- -------------- ---------
Cash 905 1,331 1,104
Loans repayable in less than
one year (3,188) (6,147) (2,671)
Loans repayable in more than
one year (1.751) (2,027) (1,950)
Net bank debt at end of period/year (4,034) (6,843) (3,517)
====================================== ============== ============== =========
4. Segmental information
Chinoh-Tex, Hemmer's China based subsidiary, ceased trading in
November 2019 and, therefore, has been reported as a discontinued
operation.
Group external revenue 6 months 6 months Year to
to to 31 May
30 November 30 November 2020
2020 2019 GBP000
GBP000 GBP000
-------------------------- -------------- -------------- ----------
Continuing operations
Hemmers 15,598 14,525 27,060
KMR 4,358 4,075 8,007
19,956 18,600 35,067
Discontinued operations
Chinoh-Tex - 493 488
Group external revenue 19,956 19,093 35,555
========================== ============== ============== ==========
Group profit/(loss) before tax 6 months 6 months Year to
to to 31 May
30 November 30 November 2020
2020 2019 GBP000
GBP000 GBP000
--------------------------------- -------------- -------------- -----------
Continuing operations
Hemmers 729 (515) (1,593)
KMR 145 (251) (331)
Holding company (139) (114) (92)
735 (880) (2,016)
Discontinued operations
Chinoh-Tex - (416) (332)
Group profit/(loss) before tax 735 (1,296) (2,348)
================================= ============== ============== ===========
Group net assets 6 months 6 months Year to
to to 31 May
30 November 30 November 2020
2020 2019 GBP000
GBP000 GBP000
-------------------------- -------------- -------------- ----------
Continuing operations
Hemmers 11,779 11,180 11,211
KMR 1,729 1,865 1,394
Holding company 2,747 2,956 2,978
16,255 16,001 15,583
Discontinued operations
Chinoh-Tex - 206 -
Group net assets 16,255 16,207 15,583
========================== ============== ============== ==========
5 . Forward-Looking Statements
Certain statements made in this announcement are forward-looking
statements. These forward-looking statements are not historical
facts but rather are based on the Company's current expectations,
estimates, and projections about its industry; its beliefs; and
assumptions. Words such as 'anticipates,' 'expects,' 'intends,'
'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions
are intended to identify forward-looking statements. These
statements are not a guarantee of future performance and are
subject to known and unknown risks, uncertainties, and other
factors, some of which are beyond the Company's control, are
difficult to predict, and could cause actual results to differ
materially from those expressed or forecasted in the
forward-looking statements. The Company cautions security holders
and prospective security holders not to place undue reliance on
these forward-looking statements, which reflect the view of the
Company only as of the date of this announcement. The
forward-looking statements made in this announcement relate only to
events as of the date on which the statements are made. The Company
will not undertake any obligation to release publicly any revisions
or updates to these forward-looking statements to reflect events,
circumstances, or unanticipated events occurring after the date of
this announcement except as required by law or by any appropriate
regulatory authority.
6. Other information
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 30 November 2020
and 30 November 2019 are unaudited. The interim financial
statements have been prepared using accounting policies consistent
with International Financial Reporting Standards (IFRS) and
International Financial Reporting Interpretations Committee (IFRIC)
interpretations as endorsed by the European Union. The same
accounting policies, presentation and methods of computation have
been followed in the preparation of these results as were applied
in the Company's latest annual audited financial statements. The
Group has chosen not to comply with IAS 34 'Interim Financial
Statement' in these interim financial statements.
The financial information for the year ended 31 May 2020 does
not constitute the full statutory accounts for that period. The
Annual Report and Financial Statements for the year ended 31 May
2020 have been filed with the Registrar of Companies. The
Independent Auditor's Report on the Annual Report and Financial
Statements for the year ended 31 May 2020 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.
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END
IR USRSRABUAAAR
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January 15, 2021 02:00 ET (07:00 GMT)
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