REG - Leeds Group PLC - Half-year Report
29/02/2024 07:00
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RNS Number : 8686E Leeds Group PLC 29 February 2024
Issued on behalf of Leeds Group
plc
Embargoed: 7.00am
Date: 29 February 2024
Leeds Group plc
("Leeds Group" or "the Group" or "the Company'')
Unaudited Interim Results for the six months ended 30 November 2023
The unaudited interim results of Leeds Group for the six months ended 30
November 2023 are presented as follows.
This announcement contains inside information for the purposes of UK Market
Abuse Regulation 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 Sandy Jamieson / Liam Murray - 020
7213 0880
Chairman's Statement
On 15 December 2023, the Board announced that they had conditionally agreed to
sell the entire issued share capital of its subsidiary, Hemmers-Itex Textil
Import Export GmbH ('Hemmers'), to a subsidiary of Nooteboom Bidco GmbH
('purchaser'). The cash consideration will be approximately £569,000 and is
based on the net assets of Hemmers at 30 November 2023, excluding its
properties, less an agreed discount. This figure differs from the figure
stated in the circular as Hemmers made larger than expected losses in
November. Leeds Group will retain three properties currently owned by Hemmers
which have an aggregate net book value of £5,209,000.
The disposal was subject, inter alia, to the approval by Leeds Group
shareholders at a general meeting and competition clearance from the German
Cartel Office. The Leeds Group shareholders approved the proposed sale at a
general meeting held on 9 January 2024 and on 22 January 2024, the Company
received confirmation that the German Cartel Office had cleared the
transaction to proceed. The Company is currently waiting for the purchaser to
complete the refinancing of the existing Hemmers loans in order for the
proposed sale to be completed. This is expected in March 2024. The assets of
Hemmers have, therefore, been shown in the accounts as an asset held for sale
and its operations have been classified as a discontinued operation.
Going forward the Company will have no trading activities as such although
through LG Nordhorn Property GmbH ('LG Nordhorn'), it will own the three
properties transferred from Hemmers and these properties will be leased back
to Hemmers generating an expected average rental income of approximately
£440,000 per annum over the next five years, which will cover the operating
expenses of the Company for those five years.
Following the proposed sale, the Board will consider the future of the Group
given the Group will be classed as an AIM Rule 15 Cash Shell. As such, the
Company must make an acquisition or acquisitions which constitute a reverse
takeover under Rule 14 of the AIM Rules within six months of Completion or be
re-admitted to trading on AIM as an investing company under the AIM Rules
(which requires the raising of at least £6 million) failing which the
Ordinary Shares would then be suspended from trading on AIM pursuant to Rule
40 of the AIM Rules. Admission to trading on AIM would be cancelled six months
from the date of suspension, should the reason for the suspension not have
been rectified.
Jan G Holmstrom
Chairman
29 February 2024
Consolidated Statement of Comprehensive Income
for the six months ended 30 November 2023
Unaudited Unaudited Audited
6 months to 30 November 2023 6 months to 30 November 2022 Year to 31 May 2023
Continuing Discontinued Total Continuing Discontinued Total Continuing Discontinued Total
operations operations operations operations operations operations
£000 £000 £000 £000 £000 £000 £000 £000 £000
Revenue - 11,042 11,042 - 15,575 15,575 - 27,817 27,817
(8,413) (8,413)
Cost of sales - - (12,666) (12,666) - (22,383) (22,383)
Gross profit - 2,629 2,629 - 2,909 2,909 - 5,434 5,434
Other income - - - - 75 75 - 171 171
Distribution costs - (743) (743) - (1,363) (1,363) - (2,203) (2,203)
Impairment charge (note 5)
- (4,487) (4,487) - - - - - -
Gain on discontinued operation
- - - - - - - 138 138
Administrative costs
(215) (1,951) (2,166) (88) (1,576) (1,664) (229) (3,820) (4,049)
Total administrative costs
(215) (6,438) (6,653) (88) (1,576) (1,664) (229) (3,682) (3,911)
Operating (loss)/profit
(215) (4,552) (4,767) (88) 45 (43) (229) (280) (509)
Finance income/(costs)
103 (354) (251) 103 (284) (181) 208 (592) (384)
(Loss)/profit before taxation
(112) (4,906) (5,018) 15 (239) (224) (21) (872) (893)
Taxation - - - - 113 113 - 53 53
(Loss)/profit for the period/year
(112) (4,906) (5,018) 15 (126) (111) (21) (819) (840)
Other comprehensive income for the period/year*
- 30 30 - 130 130 - 102 102
Total comprehensive (loss)/profit for the period/year attributable to the equity holders of the Company
(112) (4,876) (4,988) 15 4 19 (21) (717) (738)
Basic and diluted (loss)/profit per share
(0.4)p (17.8)p (18.2)p 0.1p (0.5)p (0.4)p (0.1)p (3.0)p (3.1)p
*Other comprehensive income for the period/year relates it items that are or
may be reclassified subsequently to profit or loss
Foreign operations - foreign currency translation differences
Consolidated Statement of Financial Position
at 30 November 2023
Unaudited Unaudited Audited
As at As at As at
30 November 30 November 31 May
2023 2022 2023
£000 £000 £000
Assets
Non-current assets
Property, plant and equipment 5,209 6,689 6,487
Right-of-use assets - 173 207
Intangible assets - 53 46
Total non-current assets 5,209 6,915 6,740
Current assets
Inventories - 11,227 8,218
Trade and other receivables 17 3,472 3,199
Cash and cash equivalents 94 1,845 234
Assets held for sale (note 5) 8,169 - -
Total current assets 8,280 16,544 11,651
Total assets 13,489 23,459 18,391
Liabilities
Non-current liabilities
Loans and borrowings - (697) (544)
Lease liabilities - (953) (112)
Total non-current liabilities - (1,650) (656)
Current liabilities
Trade and other payables (93) (2,699) (1,353)
Loans and borrowings - (7,279) (5,502)
Lease liabilities - (635) (97)
Provisions (345) - (344)
Liabilities directly associated with the assets held for sale (note 5)
(7,600) - -
Total current liabilities (8,038) (10,613) (7,296)
Total liabilities (8,038) (12,263) (7,952)
TOTAL NET ASSETS 5,451 11,196 10,439
Capital and reserves attributable to
equity holders of the Company
Share capital 3,279 3,279 3,279
Capital redemption reserve 1,113 1,113 1,113
Foreign exchange reserve 2,182 2,180 2,152
(Accumulated losses)/retained earnings (1,123) 4,624 3,895
TOTAL EQUITY 5,451 11,196 10,439
Consolidated Cash Flow Statement
for the six months ended 30 November 2023
Unaudited Unaudited Audited
6 months to 6 months to Year to
30 November 30 November 31 May
2023 2022 2023
£000 £000 £000
Cash flows from operating activities
Loss for the period/year (5,018) (111) (840)
Adjustments for:
Government assistance credit - - (59)
Depreciation of property, plant and equipment 294 399 608
Depreciation of right-of-use assets 43 56 103
Amortisation of intangible assets - - 6
Impairment charge 4,487 - -
Finance expense - interest on bank loans 248 153 347
Finance expense - interest on lease liabilities 3 28 37
Gain on sale of property - (138) (142)
Loss on sale of right-of-use assets - - 3
Gain on discontinued operation, net of tax - - (138)
Taxation credit - (113) (53)
57 274 (128)
Changes in:
Inventories (60) 947 2,744
Trade and other receivables 15 (1,169) (404)
Trade and other payables 254 499 (101)
Cash generated from operating activities 266 551 2,111
Interest paid on bank loans (248) (153) (347)
Interest paid on lease liabilities (3) (28) (37)
Receipt from government grant - - 59
Taxation received/(paid) - 28 (32)
Net cash from operating activities 15 398 1,754
Cash flows from investing activities
Acquisition of property, plant and equipment (19) (22) (51)
Proceeds from sale of property, plant and equipment 86 517 521
Net cash generated from investing activities 67 495 470
Cash flows from financing activities
Proceeds from bank loans - 1,515 -
Proceeds from bank loans disposed of - - 868
Repayment of bank loans (165) (150) (539)
Repayment of lease liabilities (45) (542) (661)
Net cash (used in)/generated from financing activities (210) 823 (332)
Net (decrease)/increase in cash and cash equivalents (128) 1,716 1,892
Cash and cash equivalents at beginning of period/year 234 126 126
Effect of movements in exchange rates on cash held - 3 (3)
Cash and cash equivalents disposed of - - (1,781)
Cash and cash equivalents at end of period/year 106 1,845 234
Cash and cash equivalents 94 1,845 234
Cash held in assets held for sale 12 - -
Cash and cash equivalents at end of period/year 106 1,845 234
Consolidated Statement of Changes in Equity
for the six months ended 30 November 2023
Unaudited Share capital Capital redemption reserve Foreign exchange reserve (Accumulated losses)/ Total equity
retained earnings
£000 £000 £000
£000 £000
At 1 June 2023 3,279 1,113 2,152 3,895 10,439
Loss for the period - - - (5,018) (5,018)
Other comprehensive income - - 30 - 30
At 30 November 2023 3,279 1,113 2,182 (1,123) 5,451
Unaudited Share capital Capital redemption reserve Foreign exchange reserve (Accumulated losses)/ Total equity
retained earnings
£000 £000 £000
£000 £000
At 1 June 2022 3,279 1,113 2,050 4,735 11,177
Loss for the period - - - (111) (111)
Other comprehensive income - - 130 - 130
At 30 November 2022 3,279 1,113 2,180 4,624 11,196
Audited Share capital Capital redemption reserve Foreign exchange reserve (Accumulated losses)/ Total equity
retained earnings
£000 £000 £000
£000 £000
At 1 June 2022 3,279 1,113 2,050 4,735 11,177
Loss for the year - - - (840) (840)
Other comprehensive income - - 102 - 102
At 31 May 2023 3,279 1,113 2,152 3,895 10,439
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
(Accumulated losses)/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 2023
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 2023 and 30 November
2022 are unaudited. The interim financial statements have been prepared in
accordance with the recognition and measurement principles of International
Financial Reporting Standards as adopted in the United Kingdom ("UK adopted
IFRS") using the accounting policies and methods of computation that were
applied when preparing the most recent financial statements for the year ended
31 May 2023. The Group has chosen not to comply with IAS 34 'Interim Financial
Statement' in these interim financial statements.
The information presented for the year ended 31 May 2023 does not constitute
the Company's statutory accounts but are extracted from the audited accounts.
The financial statements for the year ended 31 May 2023 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 2023 was qualified
on the basis that they were unable to obtain sufficient audit evidence in
respect of the subsidiary KMR and its performance, as stated within the
Consolidated Statement of Comprehensive Income under discontinued operations.
Except for the qualification noted above the Independent Auditor's Report on
the Annual Report and Financial Statements for the year ended 31 May 2023 did
not contain a statement under section 498(2) of the Companies Act 2006 or
section 498(3).
2. Accounting policies
Going Concern
When considering its opinion about the application of the going concern basis
of preparation of the financial statements, the Directors have assumed that
the proposed sale completes in March 2024. They have also prepared other
forecasts and sensitivities in case the proposed sale does not complete. Based
on all scenarios, the Directors are of the opinion that it is appropriate to
apply the going concern basis of preparation to the financial statements.
2. Loss per share
Ordinary shares of 12 pence each used in the calculation of earnings
per share:
Unaudited Unaudited Audited
6 months to 6 months to Year to
30 November 30 November 31 May
2023 2022 2023
£000 £000 £000
Number of shares (basic and diluted) 27,320,843 27,320,843 27,320,843
3. Segmental information
Group external revenue Unaudited Unaudited Audited
6 months to 6 months to Year to
30 November 30 November 31 May
2023 2022 2023
£000 £000 £000
Discontinued operations
Hemmers 11,042 12,679 24,290
KMR - 2,896 3,527
Group external revenue 11,042 15,575 27,817
Group loss before tax Unaudited Unaudited Audited
6 months to 6 months to Year to
30 November 30 November 31 May
2023 2022 2023
£000 £000 £000
Continuing operations
Holding company (112) 15 (21)
Discontinued operations
Hemmers (419) (164) (793)
Hemmers impairment charge (note 5) (4,487) - -
KMR - (75) (79)
(4,906) (239) (872)
Group loss before tax (5,018) (224) (893)
Group net assets Unaudited Unaudited Audited
As at As at As at
30 November 30 November 31 May
2023 2022 2023
£000 £000 £000
Continuing operations
Holding company 2,262 2,770 2,719
Discontinued operations
Hemmers 3,189 9,604 7,720
KMR - (1,178) -
3,189 8,426 7,720
Group net assets 5,451 11,196 10,439
4. Analysis of net bank debt
Unaudited Unaudited Audited
As at As at As at
30 November 30 November 31 May
2023 2022 2023
£000 £000 £000
Cash on demand and on short term deposit
Cash and cash equivalents 94 1,845 234
Cash held in assets for sale 12 - -
Total cash on demand and on short term deposit 106 1,845 234
Loans and borrowings
Loans and borrowings
Current loans and borrowings - (7,279) (5,502)
Non-current loans and borrowings - (697) (544)
- (7,976) (6,046)
Liabilities associated with assets held for sale
Current loans and borrowings (5,509) - -
Non-current loans and borrowings (396) - -
(5,905) - -
Total loans and borrowings (5,905) (7,976) (6,046)
Net bank debt at end of period/year (5,799) (6,131) (5,812)
5. Disposal subsidiary held for sale
On 15 December 2023, the Board signed a conditional agreement to sell
the entire share capital of Hemmers, its trading subsidiary in Germany.
Accordingly, the net assets of Hemmers have been presented as a subsidiary
held for sale in these financial statements and classified as a discontinued
operation. The sale is expected to complete in March 2024.
Impairment
The proposed sale price for Hemmers is based on the net assets as at 30
November 2023 excluding freehold properties with a net book value of
£5,209,000, and its intercompany loan with the holding company of £2,589,000
less an agreed discount of £4,487,000. The non-monetary assets of Hemmers as
at 30 November 2023 have, therefore, been written down by the amount of the
discount which has been allocated on a pro-rata basis.
Assets and liabilities of subsidiary held for sale
At 30 November 2023, the subsidiary was stated at fair value and
comprised the following assets and liabilities:
Unaudited
As at
30 November
2023
£000
Assets held for sale
Plant and equipment 497
Right-of-use-assets 87
Intangible assets 23
Stock 4,372
Cash 12
Trade and other receivables 3,178
Assets held for sale 8,169
Liabilities associated with assets held for sale
Trade and other payables (1,530)
Loans and borrowings (5,905)
Lease liabilities (165)
Liabilities associated with assets held for sale (7,600)
Net fair vale 569
6. 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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