REG - Leeds Group PLC - Half-year Report
17/01/2022 07:05
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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
£15,592,000 (2020: £19,956,000): Hemmer's turnover decreased to £12,668,000
(2020: £15,598,000) and KMR turnover decreased to £2,924,000 (2020:
£4,358,000).
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, the Group made a loss before tax of
£487,000 (2020: profit of £735,000. Hemmers reported a loss of £192,000
(2020: profit of £729,000) and KMR a loss of £242,000 (2020: profit of
£145,000). 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 £5,877,000 as at 30 November
2021 (30 November 2020: £4,034,000; 31 May 2021: £3,952,000). 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 to 6 months to Year to
30 November 30 November 31 May
2021 2020 2021
£000 £000 £000
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 to 6 months to Year to
30 November 30 November 31 May
2021 2020 2021
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
£000 £000 £000
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 to 6 months to Year to
30 November 30 November 31 May
2021 2020 2021
£000 £000 £000
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 assets - 33 -
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 Capital redemption reserve Treasury share reserve Foreign exchange reserve Retained earnings Total equity
£000 £000 £000
£000 £000 £000
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 Capital redemption reserve Treasury share reserve Foreign exchange reserve Retained earnings Total equity
£000 £000 £000
£000 £000 £000
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 Capital redemption reserve Treasury share reserve Foreign exchange reserve Retained earnings Total equity
£000 £000 £000
£000 £000 £000
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 reserve Amounts transferred from share capital on redemption 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 to 6 months to Year to
30 November 30 November 31 May
2021 2020 2021
Number of shares (basic and diluted) 27,320,843 27,320,843 27,320,843
3. Segmental information
Group external revenue 6 months to 6 months to Year to
30 November 30 November 31 May
2021 2020 2021
£000 £000 £000
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 to 6 months to Year to
30 November 30 November 31 May
2021 2020 2021
£000 £000 £000
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
£000 £000 £000
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
£000 £000 £000
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 £5,102,000 (2020:
£3,188,000) comprise short term loans of £4,804,000 and instalments due on
long term loans detailed below of £298,000. 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 £9.8m (€11.5m) and by KMR against short-term borrowing
facilities of £0.9m (€1m).
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 2021
rate date 2020 2020 £000
£000 £000
Loan 1 4.07% Equal September - 400 353
monthly instalments 2027
Loan 2 1.65% Equal September 2025 710 995 835
quarterly instalments
Loan 3 1.05% Equal March 277 356 310
quarterly instalments 2026
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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