REG - Pittards PLC - Trading Update

PittardsAnnouncement

23/02/2023 14:15

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RNS Number : 8916Q  Pittards PLC  23 February 2023

 

 

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

 

 

23 February 2023

PITTARDS PLC

("Pittards", "Company" or "the Group")

 

Trading Update

 

Pittards plc (AIM : PTD), the specialist producer of technically advanced
leather and luxury leather goods for retailers, manufacturers and
distributors, announces a trading update in respect of its financial results
for the year ended 31 December 2022 ("FY2022"), the full results of which are
expected to be announced during April 2023.

 

End of year summary

The majority of 2022 showed a steady recovery from the COVID years.  However,
the latter part of the year was affected by a number of factors which have had
an impact on the performance for the end of the year, and whilst the Group
generated an EBITDA for the year, its profit before tax will fall short of
market expectations.

 

Following the UK mini budget in September 2022, the GBP weakened dramatically
over a very short period.  This significant one-off event had a progressive
impact on our UK business due to the $US overdraft and maturing hedges, which
had to be unwound with a net negative effect of c£1.5m on cash.  US dollar
revenues make up a high proportion of sales and the Group's hedging strategy
involves a combination of forward $US hedges and a $US overdraft, which is
aimed at allowing the business time to adjust selling prices and costs in the
event of a change in the value of the GBP.

 

Sales were weaker in the last quarter of the year.  This was in part a result
of customers destocking prior to Christmas and an early Chinese New Year.
This market circumstance has continued into the first months of 2023.
However, our order book remains stable.

 

UK inventory was reduced throughout the year by c2m sq ft as a result of a
planned unwinding of strategic post COVID stock, to off-set supply chain
challenges.  However, the replacement cost of new stock has increased as a
result of inflationary pressures, in particular transport and energy
increases. As a result, the overall value of Group stocks increased.

 

Our net debt at the year-end stood at c£11.9m (H1 was £11.2m).

 

In accordance with our strategy, our businesses in Ethiopia have successfully
focused upon more local sales and finished products, including shoes
and gloves.  An important political event has been the signing of the
Peace Treaty on 2 November 2022, between the Government of Ethiopia and the
Tigray People's Liberation Front, leading to a cessation of hostilities. Our
businesses had remained open throughout the conflict, but this peace deal
allows a return to more normalized trading.

 

As a consequence of a high inflationary environment in Ethiopia we have
undertaken a revaluation of our assets there, subsequently we have revalued
our assets across the Group.  This will result in a significant uplift to our
assets.

 

 

Forward outlook

There remains some uncertainty around sales volumes and inflationary pressures
for 2023, along with some continued supply chain challenges.  However, we
anticipate that the financial impact of any lower sales volumes will be
partially mitigated both by the lowering of the Group's cost base and the
continuing weakness of GBP.

 

 

 

For further information, please contact:

 Pittards plc            www.pittards.com
                         (https://url.avanan.click/v2/___https:/urldefense.proofpoint.com/v2/url?u=http-3A__www.pittards.com&d=DwMFAw&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=7Um2a7LLyUH5SxHgl6zdagatUzGQxXwYgU_CeVAgL9Q&m=dcxSX44rdBUfn6sOWMPfQnBnCJtou4u4IKqv6fz9X7A&s=rFM_1ZGKBHfxhkHpVSXLSt0x8mI_pHwBTYmsp
                         -PFAYY&e=___.YXAxZTp3aGlyZWxhbmRwbGMyOmE6bzo0Y2UwZTIwNGM5YWVlMmJlOTIzMmFjMmE5ZjllMWU2OTo1OjRmZjI6YmY3ZjYxYThjZWYwZGIzMjMyZTFiNDQxNDgxODU3YmU2N2M1YTA2NzRkMDlhN2YxY2U3YWI0M2FmOWJlMWVmNDpoOk4)
 Stephen Yapp, Chairman  +44 (0) 1935 474 321

 Reg Hankey, CEO

 Alan Burgess, CFO
 WH Ireland Limited      www.whirelandcb.com
                         (https://url.avanan.click/v2/___https:/urldefense.proofpoint.com/v2/url?u=http-3A__www.whirelandcb.com&d=DwMFAw&c=euGZstcaTDllvimEN8b7jXrwqOf
                         -v5A_CdpgnVfiiMM&r=7Um2a7LLyUH5SxHgl6zdagatUzGQxXwYgU_CeVAgL9Q&m=dcxSX44rdBUfn6sOWMPfQnBnCJtou4u4IKqv6fz9X7A&s=uwWmqYjtNZPcS8QukoDxtHweFZxHlswL4tFk_in3gJE&e=___.YXAxZTp3aGlyZWxhbmRwbGMyOmE6bzo0Y2UwZTIwNGM5YWVlMmJlOTIzMmFjMmE5ZjllMWU2OTo1OmU3YmQ6YjdjOTRlOTZiODg5ZGUyMmUwYjUxMTdkZWQzNjRiMDViODM2MzEzMjBmZGQ3ODMyMmIyZThlYzg4ZDE1NDIzODpoOk4)
 Mike Coe, Sarah Mather  +44 (0)20 7220 1666
 Walbrook PR             pittards@walbrookpr.com
 Paul Vann, Joe Walker   +44 (0)20 7933 8780/ +44 (0)7768 807631

 

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