Share Name Share Symbol Market Type Share ISIN Share Description
Leeds Group Plc LSE:LDSG London Ordinary Share GB0005100606 ORD 12P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 18.00p 16.00p 20.00p 18.00p 18.00p 18.00p 0 07:43:02
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Financial 41.5 0.9 2.0 9.0 5

Leeds Group PLC Half-year Report

28/01/2019 7:00am

UK Regulatory (RNS & others)


Leeds (LSE:LDSG)
Historical Stock Chart

1 Year : From Oct 2018 to Oct 2019

Click Here for more Leeds Charts.

TIDMLDSG

RNS Number : 2006O

Leeds Group PLC

28 January 2019

Leeds Group plc

("Leeds Group" or the "the Group")

Interim Results for the six months ended 30 November 2018

Leeds Group is pleased to report the Company's interim results for the six months ended 30 November 2018.

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.

Enquiries:

   Leeds Group plc                                                    Cairn Financial Advisers LLP 
   Dawn Henderson - 07747 777055                        Tony Rawlinson / Liam Murray - 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"), Stoff-Ideen-KMR GmbH ("KMR"), a subsidiary of Hemmers based in Germany and by Chinoh-Tex Limited ("Chinoh-Tex"), a subsidiary of Hemmers based in Shanghai. These trading companies sell both basic commodity fabrics and also fabrics from their own fashion collections. Approximately 70% of sales are to retailers, with the remaining sales activities divided between the wholesale and garment manufacturing sectors.

The Group achieved sales in the period of GBP21,880,000 (2017: GBP22,180,000). Market conditions have been challenging with increased competition in a reduced market place. However, despite the reduction in turnover, the Group made a profit after tax of GBP939,000 (2017: GBP404,000). Earnings per share were 3.4 pence (2017: 1.5 pence).

Sales at Hemmers decreased to EUR19,718,000 (2017: EUR23,087,000) mainly due to decreased demand in its main markets. However, profit before interest remained at a similar level as last year at EUR1,041,000 (2017: EUR1,043,000). Profit levels have been maintained by an ongoing cost cutting exercise to reduce fixed overheads and improve efficiencies. This will continue in to the second half of the year with the objective of ensuring that profitability is maintained at a similar level to last year.

On 5(th) July 2018, Hemmers became 100% owners of KMR following the buyout of our Joint Venture partner. The consideration was GBP444,000 partly paid in cash GBP222,000 and the balance being three shops valued at GBP222,000. The accounting effect of both transactions resulted in a gain on sale of the joint venture of GBP118,000 and negative goodwill arising on consolidation of GBP380,000 both of which have been credited to the profit and loss account. KMR will be consolidated as a subsidiary company in the Group for eleven months of this financial year. Sales at KMR decreased slightly to EUR4,904,000 (2017: EUR5,334,000) as the retail sector saw reduced demand in particular through the hot summer months. Thus, there was an operating loss for KMR in the first half year of EUR315,000 (2017: loss of EUR126,000). The loss is expected to be reduced for the full financial year due to reduced costs in the second half of the year.

Chinoh-Tex, the subsidiary of Hemmers which is based in Shanghai, achieved external sales revenue of EUR1,938,000 (2017: EUR2,134,000). Despite the reduced turnover, Chinoh-Tex achieved a pre-tax profit of EUR144,000 (2017: loss of EUR32,000). Although trading has been somewhat difficult, the infrastructure and administrative costs were reduced last year to align to the expected reduction in demand and this has continued into this financial year.

Group net debt was GBP6,830,000 at 30 November 2018 (30 November 2017: GBP6,347,000; 31 May 2018: GBP4,485,000). The increase in this financial period is due to the purchase of the shares in KMR and consolidating debt in the KMR balance sheet.

The Board continues to believe that the result for the full year will be at a higher level to last year despite the challenging market conditions. The Group have implemented a number of cost reduction and efficiency plans throughout to ensure cost bases are reduced in accordance to the current market conditions to ensure the companies remain profitable.

I would like to offer thanks to our employees throughout the Group for their continued hard work and support.

Jan G Holmstrom,

Chairman

28 January 2019

Unaudited Consolidated Statement of Comprehensive Income

for the 6 months ended 30 November 2018

 
                                                6 months        6 months      Year to 
                                                      to              to       31 May 
                                             30 November     30 November         2018 
                                                    2018            2017       GBP000 
                                                  GBP000          GBP000 
----------------------------------------  --------------  --------------  ----------- 
   Revenue                                        21,880          22,180       41,538 
   Cost of sales                                (16,440)        (17,320)     (32,526) 
----------------------------------------  --------------  --------------  ----------- 
   Gross profit                                    5,440           4,860        9,012 
   Distribution costs                            (1,776)         (1,413)      (2,722) 
   Administrative expenses                       (2,881)         (2,684)      (5,188) 
   Other income                                       15               -           50 
   Profit from operations                            798             763        1,152 
   Finance expense                                  (92)            (88)        (160) 
   Share of post-tax loss of joint 
    venture                                         (34)            (47)        (107) 
   Gain on termination of joint venture              118               -            - 
   Negative goodwill arising from                    380               -            - 
    acquisition 
   Profit before tax                               1,170             628          885 
   Tax expense                                     (231)           (224)        (340) 
----------------------------------------  --------------  --------------  ----------- 
   Profit for the period attributable 
    to the equity holders of the Parent 
    Company                                          939             404          545 
========================================  ==============  ==============  =========== 
   Other comprehensive income: 
   Translation differences on foreign 
    operations                                        95             143          141 
  Other comprehensive income for 
   the period                                         95             143          141 
----------------------------------------  --------------  --------------  ----------- 
 
 Total comprehensive income for 
  the period attributable to the 
  equity holders of the Company                    1,034             547          686 
========================================  ==============  ==============  =========== 
 

The results shown in the income statement derive wholly from continuing operations.

There is no tax effect relating to other comprehensive income.

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       2018 
                                        2018            2017 
----------------------------  --------------  --------------  --------- 
 
  Basic and diluted (pence)             3.4p            1.5p       2.0p 
============================  ==============  ==============  ========= 
 

Unaudited Consolidated Statement of Financial Position

at 30 November 2018

 
                                           As at           As at      As at 
                                     30 November     30 November     31 May 
                                            2018            2017       2018 
                                          GBP000          GBP000     GBP000 
--------------------------------  --------------  --------------  --------- 
  Assets 
  Non-current assets 
  Property, plant and equipment            8,872           8,470      7,755 
  Investment property                        560               -        564 
  Intangible assets                        1,291           1,068      1,057 
  Investment in joint venture                  -             795        734 
 
  Total non-current assets                10,723          10,333     10,110 
--------------------------------  --------------  --------------  --------- 
 
  Current assets 
  Inventories                             13,266          10,948      9,621 
  Trade and other receivables              6,168           6,820      6,252 
  Corporation tax recoverable                569             245        386 
  Derivative financial asset                  27               4          - 
  Cash and cash equivalents                1,139           1,286        572 
 
  Total current assets                    21,169          19,303     16,831 
--------------------------------  --------------  --------------  --------- 
 
  Total assets                            31,892          29,636     26,941 
================================  ==============  ==============  ========= 
 
  Liabilities 
  Non-current liabilities 
  Loans and borrowings                   (4,402)         (3,885)    (3,708) 
  Deferred tax                             (279)           (280)      (277) 
 
  Total non-current liabilities          (4,681)         (4,165)    (3,985) 
--------------------------------  --------------  --------------  --------- 
 
  Current liabilities 
  Trade and other payables               (3,631)         (2,874)    (2,619) 
  Loans and borrowings                   (3,567)         (3,748)    (1,349) 
 
  Total current liabilities              (7,198)         (6,622)    (3,968) 
--------------------------------  --------------  --------------  --------- 
 
  Total liabilities                     (11,879)        (10,787)    (7,953) 
================================  ==============  ==============  ========= 
 
  TOTAL NET ASSETS                        20,013          18,849     18,988 
================================  ==============  ==============  ========= 
 
 
  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)     (798)     (798) 
  Foreign exchange reserve               2,585     2,492     2,490 
  Retained earnings                     13,843    12,763    12,904 
 
  TOTAL EQUITY                          20,013    18,849    18,988 
====================================  ========  ========  ======== 
 

Unaudited Consolidated Cash Flow Statement

for the 6 months ended 30 November 2018

 
                                                 6 months        6 months    Year to 
                                                       to              to     31 May 
                                              30 November     30 November       2018 
                                                     2018            2017     GBP000 
                                                   GBP000          GBP000 
-----------------------------------------  --------------  --------------  --------- 
  Cash flows from operating activities 
  Profit for the period                               939             404        545 
  Adjustments for: 
  Depreciation of property, plant 
   and equipment                                      393             331        586 
  Depreciation of investment property                   9               -         19 
  Amortisation of intangible assets                    10               -          6 
  Finance expense                                      92              88        160 
  Movement in derivative financial 
   assets                                            (28)            (52)       (48) 
  Share of post-tax loss of joint 
   venture                                             34              47        107 
  Gain on termination of joint venture              (118)               -          - 
  Negative goodwill arising from                    (380)               -          - 
   acquisition 
  Income tax expense                                  231             224        340 
 
  Cash flows from operating activities 
   before 
   changes in working capital and 
   provisions                                       1,182           1,042      1,715 
 
  (Increase)/decrease in inventories                (761)           (716)        597 
  Decrease/(increase) in trade and 
   other receivables                                  194             (6)        583 
  (Decrease) in trade and other payables            (536)           (572)      (835) 
 
  Cash generated/(used) by operating 
   activities                                          79           (252)      2,060 
  Income taxes paid                                 (276)           (152)      (411) 
 
  Net cash flows (to)/from operating 
   activities                                       (197)           (404)      1,649 
=========================================  ==============  ==============  ========= 
 
  Investing activities 
  Purchase of property, plant and 
   equipment                                        (123)           (251)      (400) 
  Purchase of subsidiary net of debt              (1,865)               -          - 
 
  Net cash used in investing activities           (1,988)           (251)      (400) 
=========================================  ==============  ==============  ========= 
 
  Financing activities 
  Purchase of treasury shares                         (9)               -          - 
  Net drawdown/(repayment) of bank 
   borrowings                                       2,868             464    (2,102) 
  Bank interest paid                                 (92)            (88)      (160) 
 
  Net cash generated/(used) by financing 
   activities                                       2,767             376    (2,262) 
=========================================  ==============  ==============  ========= 
 
  Net increase/(decrease) in cash 
   and cash equivalents                               582           (279)    (1,013) 
 
  Translation (loss)/gain on cash 
   and cash equivalents                              (15)             (2)         18 
 
  Cash and cash equivalents at beginning 
   of the period                                      572           1,567      1,567 
 
  Cash and cash equivalents at end 
   of the period                                    1,139           1,286        572 
=========================================  ==============  ==============  ========= 
 

Unaudited Consolidated Statement of Changes in Equity

for the six months ended 30 November 2018

 
                               Share        Capital    Treasury      Foreign     Retained      Total 
                             capital     redemption       share     exchange     earnings     equity 
                                            reserve     reserve      reserve 
                              GBP000         GBP000      GBP000       GBP000       GBP000     GBP000 
------------------------  ----------  -------------  ----------  -----------  -----------  --------- 
 
  At 1 June 2018               3,792            600       (798)        2,490       12,904     18,988 
  Profit for the period            -              -           -            -          939        939 
  Other comprehensive 
   income                          -              -           -           95            -         95 
  Transaction with 
   shareholders: 
  Purchase of treasury 
   shares                          -              -         (9)            -            -        (9) 
 
  At 30 November 2018          3,792            600       (807)        2,585       13,843     20,013 
========================  ==========  =============  ==========  ===========  ===========  ========= 
 
 
                               Share        Capital    Treasury      Foreign     Retained      Total 
                             capital     redemption       share     exchange     earnings     equity 
                                            reserve     reserve      reserve 
                              GBP000         GBP000      GBP000       GBP000       GBP000     GBP000 
------------------------  ----------  -------------  ----------  -----------  -----------  --------- 
 
  At 1 June 2017               3,792            600       (798)        2,349       12,359     18,302 
  Profit for the period            -              -           -            -          404        404 
  Other comprehensive 
   income                          -              -           -          143            -        143 
 
  At 30 November 2017          3,792            600       (798)        2,492       12,763     18,849 
========================  ==========  =============  ==========  ===========  ===========  ========= 
 
 
                             Share        Capital    Treasury      Foreign     Retained      Total 
                           capital     redemption       share     exchange     earnings     equity 
                                          reserve     reserve      reserve 
                            GBP000         GBP000      GBP000       GBP000       GBP000     GBP000 
----------------------  ----------  -------------  ----------  -----------  -----------  --------- 
 
  At 1 June 2017             3,792            600       (798)        2,349       12,359     18,302 
  Profit for the year            -              -           -            -          545        545 
  Other comprehensive 
   income                        -              -           -          141            -        141 
 
  At 31 May 2018             3,792            600       (798)        2,349       12,904     18,988 
======================  ==========  =============  ==========  ===========  ===========  ========= 
 

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 2018

1. 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 2018 and 30 November 2017 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 directors have adopted the following accounting standards which became effective for periods beginning on or after 1 January 2018:

IFRS 9 (Financial instruments)

IFRS 15 (Revenue from contracts with customers)

There has been no financial impact of these accounting standards and therefore the 2017 comparative figures have not been restated.

The directors will adopt the following forthcoming accounting standard which becomes effective for periods beginning on or after 1 January 2019:

IFRS 16 (Leases)

Under IFRS 16, the Group will be required to recognise a right-of-use asset and a lease liability for future lease commitments (excluding low value leases and leases less than 12 months) on the consolidated balance sheet and replace straight line operating lease rental charges with depreciation of right-to-use assets and an interest charge on the lease liabilities in the consolidated income statement. The directors are currently evaluating the impact of applying this new standard and any changes, as a result of this new standard, will impact the comparative results shown in the 31 May 2020 financial statements.

The financial information for the year ended 31 May 2018 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for the year ended 31 May 2018 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 2018 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. 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          2018 
           2018            2017 
 --------------  --------------  ------------ 
 
     27,340,679      27,350,843    27,350,843 
 ==============  ==============  ============ 
 

3. Reconciliation of movements in net bank debt

 
                                          6 months        6 months    Year to 
                                                to              to     31 May 
                                       30 November     30 November       2018 
                                              2018            2017     GBP000 
                                            GBP000          GBP000 
----------------------------------  --------------  --------------  --------- 
 
  Increase/(decrease) in cash 
   & cash equivalents                          582           (279)    (1,013) 
  Translation (loss)/gain on cash 
   and cash equivalents                       (15)             (2)         18 
  (Increase)/decrease in loans             (2,868)           (464)      2,102 
  Translation loss on loans                   (44)            (82)       (72) 
 
  Net cash (outflow)/inflow                (2,345)           (827)      1,035 
  Net bank debt at beginning of 
   period                                  (4,485)         (5,520)    (5,520) 
 
  Net bank debt at end of period           (6,830)         (6,347)    (4,485) 
==================================  ==============  ==============  ========= 
 

4. Analysis of net bank debt

 
                                         6 months        6 months    Year to 
                                               to              to     31 May 
                                      30 November     30 November       2018 
                                             2018            2017     GBP000 
                                           GBP000          GBP000 
---------------------------------  --------------  --------------  --------- 
 
  Cash                                      1,139           1,286        572 
  Loans repayable in less than 
   one year                               (4,420)         (3,748)    (1,349) 
  Loans repayable in more than 
   one year                               (3,549)         (3,885)    (3,708) 
 
  Net bank debt at end of period          (6,830)         (6,347)    (4,485) 
=================================  ==============  ==============  ========= 
 

5. Segmental information

 
                                       6 months        6 months    Year to 
                                             to              to     31 May 
                                    30 November     30 November       2018 
                                           2018            2017     GBP000 
                                         GBP000          GBP000 
-------------------------------  --------------  --------------  --------- 
  External revenue 
  Hemmers Europe                         16,640          20,501     38,299 
  Hemmers China                           1,583           1,679      3,239 
  KMR                                     3,657               -          - 
 
  Total Group external revenue           21,880          22,180     41,538 
===============================  ==============  ==============  ========= 
 
 
                                         6 months        6 months    Year to 
                                               to              to     31 May 
                                      30 November     30 November       2018 
                                             2018            2017     GBP000 
                                           GBP000          GBP000 
---------------------------------  --------------  --------------  --------- 
  Profit before tax 
  Hemmers Europe (local GAAP)                 747             722      1,123 
  KMR                                       (233)               -          - 
  Share of post-tax loss of JV               (34)            (47)      (107) 
  IFRS adjustment - financial 
   derivatives                                 28               4          - 
 
  Hemmers Europe (IFRS)                       508             679      1,016 
  Hemmers China                               128            (29)       (86) 
  Unrealised profit in stock                   16               -       (13) 
  Holding company                              20            (22)       (32) 
  Gain on termination of joint                118               -          - 
   venture 
  Negative goodwill arising from              380               -          - 
   acquisition 
 
  Group profit before tax                   1,170             628        885 
=================================  ==============  ==============  ========= 
 
 
                                                  6 months        6 months    Year to 
                                                        to              to     31 May 
                                               30 November     30 November       2018 
                                                      2018            2017     GBP000 
                                                    GBP000          GBP000 
------------------------------------------  --------------  --------------  --------- 
  Net assets 
  Hemmers Europe (local GAAP)                       13,426          14,024     14,197 
  KMR                                                1,743               -          - 
  IFRS adjustment - financial 
   derivatives                                          27               3          - 
  IFRS adjustment - goodwill amortisation              709             705        703 
 
  Hemmers Europe (IFRS)                             15,905          14,732     14,900 
  Hemmers China                                      1,130           1,056      1,049 
  Unrealised profit in stock                          (21)            (25)       (37) 
  Holding company                                    2,999           3,086      3,076 
 
  Group net assets                                  20,013          18,849     18,988 
==========================================  ==============  ==============  ========= 
 

6. Acquisition of KMR

On 5(th) July 2018 Hemmers became 100% owners of KMR following the buyout of our joint venture partner. The consideration was EUR500,000 (GBP444,000) comprising EUR250,000 (GBP222,000) paid in cash and the balance being three shops at a value of EUR250,000 (GBP222,000). Hemmers invested a further EUR370,000 (GBP329,000) in the company during the period. KMR is a retailer of fabric and haberdashery, operating shops located throughout Germany.

The joint venture investment was accounted for in the consolidated financial statements of Leeds Group using the equity accounting method and at 30 June 2018, was held at a cost of EUR796,000 (GBP707,000).

The directors continue to assess the acquisition accounting entries and the below represents provisional figures, which will be finalised during the remainder of the measurement period.

Accounting for the step acquisition of KMR requires the directors to fair value the original 50% joint venture investment, with the resulting gain credited to the profit and loss as follows:

 
                                                   EUR000    GBP000 
-----------------------------------------------  --------  -------- 
 
  As at 30 June 2018: 
  Fair value share of original joint venture          929       825 
  Carrying value of investment in consolidated 
   financial statements                               796       707 
 
  Gain on fair valuing of joint venture 
   investment                                         133       118 
===============================================  ========  ======== 
 

Upon obtaining 100% control of the KMR entity, the cost of the investment for the purposes of determining the goodwill is calculated as follows:

 
                                              EUR000    GBP000 
------------------------------------------  --------  -------- 
 
  Fair value share of original 50% joint 
   venture                                       929       825 
  Fair value of the consideration paid to 
   obtain control                                500       444 
 
  Cost of investment                           1,429     1,269 
==========================================  ========  ======== 
 

The net assets of the newly acquired subsidiary are as follows:

 
                                              EUR000     GBP000 
-----------------------------------------  ---------  --------- 
 
  Fair value of net assets as at 30 June 
   2018: 
  Fixed assets                                 1,745      1,549 
  Stock                                        3,436      3,050 
  Cash                                           259        230 
  Debtors                                        335        297 
  Creditors                                  (1,731)    (1,537) 
  Loans                                      (2,186)    (1,940) 
 
  Fair value of assets acquired                1,858      1,649 
=========================================  =========  ========= 
 

The directors consider that the book values of the new assets acquired approximate to the fair value of the new assets and that there are no separately identifiable intangible assets.

Goodwill on consolidation is calculated as follows:

 
                                                 EUR000    EUR000 
---------------------------------------------  --------  -------- 
 
  Cost of investment                              1,429     1,269 
  Fair value of net assets acquired               1,858     1,649 
 
  Negative goodwill arising on consolidation        429       380 
=============================================  ========  ======== 
 

This negative goodwill is credited to the profit and loss account.

The cash flow effect of the step acquisition is as follows:

 
                               EUR000                     GBP000 
--------------------------  ---------  ------------------------- 
 
  Cash                            335                        297 
  Further cash investment         370                        329 
  Loans                       (2,186)                    (1,940) 
 
  Net debt                    (1,481)                    (1,314) 
  Cost of purchase            (1,080)                      (959) 
  Further cash investment       (370)                      (329) 
 
  Total investment            (1,450)                    (1,288) 
==========================  =========  ========================= 
  Net cash effect             (2,931)                    (2,602) 
==========================  =========  ========================= 
 

The amounts of revenue and profit before tax included in the consolidated statement of comprehensive income in respect of KMR's trading since the acquisition date are shown in note 5.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

IR UBRORKBAAUAR

(END) Dow Jones Newswires

January 28, 2019 02:00 ET (07:00 GMT)

1 Year Leeds Chart

1 Year Leeds Chart

1 Month Leeds Chart

1 Month Leeds Chart
Your Recent History
LSE
LDSG
Leeds
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:gb D:20191017 21:20:59