TIDMLDSG
RNS Number : 5550Y
Leeds Group PLC
17 January 2022
Issued on behalf of Leeds Group plc
Embargoed: 7.00am
Date: 17 January 2022
Leeds Group plc
("Leeds Group" or the "the Group")
Unaudited Interim Results for the six months ended 30 November
2021
The unaudited interim results of Leeds Group plc ("Leeds Group"
or "the Group") for the six months ended 30 November 2021 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 activities of the Group are that of a wholesaler and
retailer of fabrics and haberdashery and are 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.
As already communicated in our AGM statement of 23 November
2021, the ongoing Covid-19 pandemic continues to impact on the
Group's trading activities. It had been expected that the early
months of this financial year would be difficult but that there
would then be a gradual return to more normal trading levels.
However, the prolonged nature of the pandemic, exacerbated by the
emergence of the Omicron variant in late November 2021, has
impacted consumer confidence and caused many our customers to
become overstocked and reduce demand while they correct that
position. Although there have been no further country-wide
lockdowns in Germany, the German government and other European
governments have introduced restrictions to curb the spread of the
new Omicron variant which directly impact retail operations. Sales
at Hemmers and KMR have consequently reduced by 19% and 33%
respectively compared with the previous year which is consistent
with reductions being reported by competitors in our sector.
The Group turnover in the first six months of the financial year
was GBP15,592,000 (2020: GBP19,956,000): Hemmer's turnover
decreased to GBP12,668,000 (2020: GBP15,598,000) and KMR turnover
decreased to GBP2,924,000 (2020: GBP4,358,000).
Hemmers and KMR management teams are monitoring and managing the
Covid-19 market situation to ensure the cost base and inventories
are aligned over time with the reduced turnover, however, t he
Group made a loss before tax of GBP487,000 (2020: profit of
GBP735,000. Hemmers reported a loss of GBP192,000 (2020: profit of
GBP729,000) and KMR a loss of GBP242,000 (2020: profit of
GBP145,000). Management will take further action in the second half
of the year to reduce costs further and will also apply for further
government financial support.
Group net bank debt, as analysed in note 4, was GBP5,877,000 as
at 30 November 2021 (30 November 2020: GBP4,034,000; 31 May 2021:
GBP3,952,000). Group debt increased in the first half of the year
due to the reduced level of trading and seasonal increased stock
levels.
The short-term business outlook remains difficult to predict
because of the prolonged nature of the pandemic with new variants
continuing to emerge. In the medium term we assume that increased
immunity amongst the population will enable a return to more normal
trading levels and profitability.
Jan G Holmstrom
Chairman
17 January 2022
Unaudited Consolidated Statement of Comprehensive Income
for the six months ended 30 November 2021
6 months 6 months Year to
to to 31 May
30 November 30 November 2021
2021 2020 GBP000
GBP000 GBP000
---------------------------------------- -------------- -------------- --------------------
Continuing operations
Revenue 15,592 19,956 33,013
Cost of sales (12,514) (15,371) (26,700)
Gross profit 3,078 4,585 6,313
Distribution costs (1,250) (1,442) (2,647)
Administrative costs (2,188) (2,293) (4,912)
Other income - - 966
(Loss)/profit from operations (360) 850 (280)
Finance expense (127) (115) (228)
(Loss)/profit before tax (487) 735 (508)
Taxation - - 42
(Loss)/profit for the period/year
attributable to the equity holders
of the Parent Company (487) 735 (466)
Other comprehensive loss for the
period/year (101) (63) (556)
Total comprehensive (loss)/profit
for the period/year attributable
to the equity holders of the Company (588) 672 (1,022)
======================================== ============== ============== ====================
(Loss)/earnings 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 2021
2021 2020
------------------------------------------ -------------- -------------- ----------
Basic and diluted total (loss)/earnings
per share (pence) (1.8)p 2.6p (1.7)p
========================================== ============== ============== ==========
Unaudited Consolidated Statement of Financial Position
at 30 November 2021
As at As at As at
30 November 30 November 31 May
2021 2020 2021
GBP000 GBP000 GBP000
----------------------------------- -------------- -------------- ---------
Assets
Non-current assets
Property, plant and equipment 7,631 8,104 7,750
Right-of-use assets 2,175 1,962 2,453
Intangible assets 57 66 58
Total non-current assets 9,863 10,132 10,261
----------------------------------- -------------- -------------- ---------
Current assets
Inventories 12,446 10,851 10,287
Trade and other receivables 3,755 3,862 2,867
Corporation tax recoverable 61 77 136
Cash on demand and on short term
deposit 216 905 670
Total current assets 16,478 15,695 13,960
----------------------------------- -------------- -------------- ---------
Total assets 26,341 25,827 24,221
=================================== ============== ============== =========
Liabilities
Non-current liabilities
Loans and borrowings (987) (1,751) (1,498)
Lease liabilities (1,006) (1,075) (1,856)
Total non-current liabilities (1,993) (2,826) (3,354)
----------------------------------- -------------- -------------- ---------
Current liabilities
Trade and other payables (3,649) (2,532) (2,265)
Loans and borrowings (5,102) (3,188) (2,926)
Lease liabilities (1,524) (893) (1,015)
Derivative financial liability - (33) -
Provisions (100) (100) (100)
Total current liabilities (10,375) (6,746) (6,306)
----------------------------------- -------------- -------------- ---------
Total liabilities (12,368) (9,572) (9,660)
=================================== ============== ============== =========
TOTAL NET ASSETS 13,973 16,255 14,561
=================================== ============== ============== =========
Capital and reserves attributable
to
equity holders of the company
------------------------------------ -------- -------- --------
Share capital 3,279 3,792 3,279
Capital redemption reserve 1,113 600 1,113
Treasury share reserve - (807) -
Foreign exchange reserve 2,084 2,678 2,185
Retained earnings 7,497 9,992 7,984
TOTAL EQUITY 13,973 16,255 14,561
==================================== ======== ======== ========
Unaudited Consolidated Cash Flow Statement
for the six months ended 30 November 2021
6 months 6 months Year to
to to 31 May
30 November 30 November 2021
2021 2020 GBP000
GBP000 GBP000
---------------------------------------------- -------------- -------------- ---------
Cash flows from operating activities
(Loss)/profit for the period/year (487) 735 (466)
Adjustments for:
Government assistance credit - - (966)
Depreciation of property, plant and
equipment 334 381 624
Depreciation of right-of-use assets 461 447 1,062
Impairment of right-of-use assets - - 333
Amortisation of intangible assets - - 6
Finance expense - interest on bank
loans 89 80 154
Finance expense - interest lease
liabilities 38 35 74
Movement in derivative financial - 33 -
assets
Gain on sale of fixed assets - (30) (14)
Taxation credit - - (42)
Cash flows generated from operating
activities before changes in working
capital and provisions 435 1,681 765
Increase in inventories (2,254) (713) (571)
(Increase)/decrease in trade and
other receivables (677) (416) 718
Increase/(decrease) in trade and
other payables 1,386 (323) (599)
Cash (used in)/generated from operating
activities (1,110) 229 313
Taxation received 73 134 110
Net cash flows (used in)/generated
from operating activities (1,037) 363 423
============================================== ============== ============== ===========
Investing activities
Purchase of property, plant and equipment (283) (347) (562)
Proceeds from sale of fixed assets - 38 21
Net cash used in investing activities (283) (309) (541)
============================================== ============== ============== ===========
Financing activities
Bank borrowings drawn 2,272 339 787
Bank borrowings repaid (564) - (771)
Repayment of principal on lease liabilities (519) (475) (985)
Repayment of interest on lease liabilities (38) (35) (74)
Bank interest paid (89) (80) (154)
Government assistance received - - 705
Net cash generated from/(used in)
financing activities 1,062 (251) (492)
============================================== ============== ============== ===========
Net decrease in cash and cash equivalents (258) (197) (610)
Translation loss on cash and cash
equivalents (2) (2) (22)
Cash and cash equivalents at beginning
of period/year 472 1,104 1,104
Cash and cash equivalents at end
of period/year 212 905 472
============================================== ============== ============== ===========
Cash on demand or on short term deposit 216 905 670
Bank overdrafts (4) - (198)
============================================== ============== ============== ===========
Cash and cash equivalents at end
of period/year 212 905 472
============================================== ============== ============== ===========
Unaudited Consolidated Statement of Changes in Equity
for the six months ended 30 November 2021
Share Capital Treasury Foreign Retained Total
capital redemption share exchange earnings equity
reserve reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------- ---------- ------------- ---------- ----------- ----------- ---------
At 1 June 2021 3,279 1,113 - 2,185 7,984 14,561
Loss for the period - - - - (487) (487)
Other comprehensive
loss - - - (101) - (101)
At 30 November 2021 3,279 1,113 - 2,084 7,497 13,973
====================== ========== ============= ========== =========== =========== =========
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 2020 3,792 600 (807) 2,741 9,257 15,583
Cancellation of treasury
shares (513) 513 807 - (807) -
Loss for the year - - - - (466) (466)
Other comprehensive
income - - - (556) - (556)
At 31 May 2021 3,279 1,113 - 2,185 7,984 14,561
=========================== ========== ============= ========== =========== =========== =========
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 reserve Gains/(losses) arising on retranslation of
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 2021
1. General information
Leeds Group plc is an AIM listed public company, limited by
shares and incorporated in England and Wales under the Companies
Act and its number is 00067863. The address of the registered
office is Craven House, 14-18 York Road, Leeds, Wetherby, LS22
6SL.
The interim results for the six months ended 30 November 2021
and 30 November 2020 are unaudited. The interim financial
statements have been prepared using accounting policies consistent
with International Accounting Standards in conformity with the
Companies Act 2006. 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 2021 does
not constitute the full statutory accounts for that period. The
Annual Report and Financial Statements for the year ended 31 May
2021 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 2021 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. Accounting policies
Basis of preparation
This announcement has been prepared using accounting policies
consistent with International Financial Reporting Standards (IFRS)
and in conformity with the Companies Act 2006.
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 2023, 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 have been prepared for the period to 31 May 2024 which
indicates a return to profit over the period. These forecasts are
based on the current Covid-19 conditions and assume that there will
be no protracted periods of country-wide lockdowns. Both Hemmers
and KMR are located in Germany and have been affected by
restrictions imposed by the German and other European governments.
Management continues to work hard to manage the effects of the
ongoing pandemic on both businesses. In the medium term we assume
that increased immunity amongst the population will enable a return
to more normal trading levels and profitability.
Bank debt has increased as expected in the first half of the
year. Both 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 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 working capital facilities, the
Directors are of the opinion that it is appropriate to apply the
going concern basis of preparation to the financial statements.
2. (Loss)/earnings 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 2021
2021 2020
------------------------------ -------------- -------------- ------------
Number of shares (basic and
diluted) 27,320,843 27,320,843 27,320,843
============================== ============== ============== ============
3. Segmental information
Group external revenue 6 months 6 months Year to
to to 31 May
30 November 30 November 2021
2021 2020 GBP000
GBP000 GBP000
------------------------- -------------- -------------- ----------
Continuing operations
Hemmers 12,668 15,598 27,669
KMR 2,924 4,358 5,344
Group external revenue 15,592 19,956 33,013
========================= ============== ============== ==========
Group (loss)/profit before tax 6 months 6 months Year to
to to 31 May
30 November 30 November 2021
2021 2020 GBP000
GBP000 GBP000
--------------------------------- -------------- -------------- ---------
Continuing operations
Hemmers (192) 621 (21)
KMR (242) 145 (311)
Holding company (53) (31) (176)
Group (loss)/profit before tax (487) 735 (508)
================================= ============== ============== =========
Group net assets As at As at As at
30 November 30 November 31 May
2021 2020 2021
GBP000 GBP000 GBP000
------------------------ -------------- -------------- ----------
Continuing operations
Hemmers 9,931 11,779 10,214
KMR 1,292 1,541 1,545
Holding company 2,750 2,935 2,802
Group net assets 13,973 16,255 14,561
======================== ============== ============== ==========
4. Analysis of net bank debt
As at As at As at
30 November 30 November 31 May
2021 2020 2021
GBP000 GBP000 GBP000
-------------------------------------- -------------- -------------- ---------
Cash on demand and on short
term deposit 216 905 670
Bank overdrafts (4) - (198)
Current loans and borrowings (5,102) (3,188) (2,926)
Non - current loans and borrowings (987) (1,751) (1,498)
Net bank debt at end of period/year (5,877) (4,034) (3,952)
====================================== ============== ============== =========
Current loans and borrowings
At 30 November 2021 current loans and borrowings of GBP5,102,000
(2020: GBP3,188,000) comprise short term loans of GBP4,804,000 and
instalments due on long term loans detailed below of GBP298,000.
The interest rate on the short-term loans ranges from 1.5% to 3%
(2020: 1.25% to 3%) and these loans are secured on working capital
of Hemmers and KMR. The short-term loans are drawn down by Hemmers
against short-term borrowing facilities of up to a maximum of
GBP9.8m (EUR11.5m) and by KMR against short-term borrowing
facilities of GBP0.9m (EUR1m).
Non-current loans and borrowings
A non-current loan was drawn down in 2007 from Kreissparkasse to
finance the freehold extension of the warehouse in Nordhorn. This
has been repaid early during the first half of the year and
refinanced by short term debt at lower interest rates. In 2016 and
2017 further loans were drawn down to finance developments at
Nordhorn.
The Group's loans and borrowings are within the accounts of
Hemmers. They are denominated in Euros, and their principal terms
are as follows:
Fixed Repayment Final As at As at As at
interest profile repayment 30 November 30 November 31 May
rate date 2020 2020 2021
GBP000 GBP000 GBP000
Equal
Loan monthly September
1 4.07% instalments 2027 - 400 353
Equal
Loan quarterly September
2 1.65% instalments 2025 710 995 835
Equal
Loan quarterly March
3 1.05% instalments 2026 277 356 310
Non-current loans 987 1,751 1,498
==================================== ============ ================ ================ ===========
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.
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