Source - RNS
RNS Number : 2461K
Pittards PLC
20 September 2016
 



 

 

 

20 September 2016

Pittards plc

("Pittards" or "the Company")

 

Interim Results

for the six months ended 30 June 2016

 

Pittards plc, the specialist producer of technically advanced leather and luxury leather goods for sale to retailers, manufacturers and distributors today announces its results for the six months ended 30 June 2016.

 

The key highlights for the half year were as follows:

 

Financial Highlights:

•       Revenue £13.4m (H1 2015: £15.6m)

•       EBITDA £0.8m (H1 2015: £1.0m)

•       Profit before tax of £0.3m (H1 2015: £0.6m)

•       Basic earnings per share of 1.56p (H1 2015: 4.47p), impacted by the share issue in June 2015

•       Net assets £24.8m (H1 2015: £23.8m)

 

Strategic Highlights:

•     Development of strategic roadmap making good progress with a number of medium-term initiatives defined and prioritised investments made

•     Board recruitment completed

Stephen Yapp, Chairman commented: "Pittards has traded profitably in a challenging first half in which we saw a continuation of the depressed demand for leather in similar market conditions to those at the end of 2015.

 

"We have made progress in identifying the Company's medium-term priorities and associated investment requirements, supported by an adequate cash position and solid balance sheet. 

 

"The second half continues to benefit from a favorable currency impact and the Board remains confident that the Company can deliver full year results in line with our expectations and the actions identified will help to build a platform for future growth." 

 

 

For further information please contact: 

 



          Pittards plc

www.pittardsleather.com

Stephen Yapp, Chairman

 

Reg Hankey, CEO

+44 (0) 1935 474 321

Matt O'Rourke, CFO


WH Ireland Limited

www.whirelandplc.com 

John Wakefield/Ed Allsopp

+44 (0) 117 945 3470

 

 

This announcement includes inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

 

 

CHAIRMAN'S STATEMENT

 

INTRODUCTION

 

In my first letter to you as the Chairman of Pittards plc, I am reassured by the fundamentals of its businesses and encouraged about the opportunities that lie ahead. The Company is in a transitional phase and continues to operate in an uncertain economic environment. Against this backdrop, it had a challenging first half of 2016 although we made progress in determining the medium-term priorities.

 

The key highlights for the half year were:

 

Financial Highlights:

•       Revenue  £13.4m (H1 2015: £15.6m)

•       EBITDA £0.8m (H1 2015: £1.0m)

•       Profit before tax of £0.3m (H1 2015: £0.6m)

•       Basic earnings per share of 1.56p (H1: 2015 4.47p), impacted by the share issue in June 2015

•       Net assets £24.8m (H1 2015: £23.8m)

 

Strategic Highlights:

•     Development of strategic roadmap making good progress with a number of key medium-term initiatives defined and prioritised investments made

•     Board recruitment completed

 

MARKET CONDITIONS

 

Volumes in the leather industry remain depressed reflecting reduced demand from China and Russia and high inventories following mild winters which all have a direct impact on our markets.

 

Global leather sales are estimated to be worth over $85bn (source: UKLF). Pittards is targeting the following core markets: performance gloves, footwear, lifestyle and interiors, which play to our sales and manufacturing strengths, optimise our supply chain and give us a balanced portfolio. Golf remains an important market for us with the golf markets (gloves and shoes) in the US and the Rest of the World each worth approximately $500m.

 

RESULTS

 

Revenue declined by 14% to £13.4m. This reflected weaker global demand which affected all divisions with the exception of the Ethiopia Consumer Division which grew revenue year on year due to increased production and sales of work and dress gloves.

 

Gross Margin at 22.7% improved by 1 percentage point year on year mainly due to favourable raw material prices and currency rates. EBITDA was down to £0.8m from £1.0m as a consequence of reduced volumes and our investment in people.

                                                                                      

Profit before tax reduced to £0.3m (H1 2015: £0.6m) and basic earnings per share to 1.56p (H1 2015 4.47p), also impacted by the share issue in June 2015.

 

As at 30 June 2016, net debt was £8.2m (H1 2015: £6.9m) reflecting investment in: the final instalment to buy ETSC (which is a main supplier of Ethiopian skins) of approximately £0.3m, buying out the minority interest in the Ethiopian-based Pittards Global Sourcing for £0.2m and capital investment of £0.8m.

STRATEGIC UPDATE

Pittards, proud of its heritage, is aware of the need to evolve as a business to remain competitive as it develops the next phase of growth.

We aim to extend our competitive edge within the identified markets that play to our strengths via innovation, service, manufacturing and marketing initiatives.  To facilitate this, we have updated the management structure and are recruiting to fill a small number of identified gaps.

The purchase of the freehold of the Yeovil site in 2015 secured the future of our UK manufacturing operations. As mentioned above, further investments were made in the first half to strengthen our Ethiopian operations and help modernise the UK Leather Division.

 

BOARD CHANGES

I was appointed Chairman on 16 May 2016 and would like to thank my predecessor Stephen Boyd for his valuable contribution during his time at the Company.

On 1 June, Matthew O'Rourke was appointed CFO bringing with him a wealth of industry and financial experience. As previously announced, effective from that date, Jill Williams resigned from this role and became a non-executive director.

OUTLOOK

Pittards has traded profitably in a challenging first half in which we saw a continuation of the depressed demand for leather in similar market conditions to those at the end of 2015.

 

We have made progress in identifying the Company's medium-term priorities and associated investment requirements, supported by an adequate cash position and solid balance sheet. 

 

The second half continues to benefit from a favourable currency impact and the Board remains confident that the Company can deliver full year results in line with our expectations and the actions identified will help to build a platform for future growth.

 

 

Stephen Yapp

Chairman

20 September 2016

 

 

 

 

 

 

Consolidated income statement (unaudited) for the six months ended 30 June 2016

 

Year ended

31 December 2015

£'000


Six months ended

30 June 2016

£'000

Six months ended

30 June 2015

£'000






30,523

Revenue


13,373

15,623

(23,902)

Cost of sales


(10,339)

(12,239)

6,621

Gross profit


3,034

3,384

(1,919)

Distribution costs


(857)

(1,016)

(3,275)

Administrative expenses


(1,555)

(1,616)

(312)

Administrative expenses - exceptional restructuring costs


(98)

-

1,115

Profit from operations before finance costs


524

752

(484)

Finance costs


(215)

(218)

24

Finance income


5

21

655

Profit before taxation


314

555

(184)

Taxation charge

(97)

(118)

471

Profit for the period after taxation


217

437


Profit attributable to:




474

Owners of the parent


217

442

(3)

Non-controlling interest


-

(5)

471



217

437


Earnings per share attributable to equity shareholders of the parent



3.98p

- basic                                                             


1.56p

4.47p

3.88p

- diluted  


1.51p

4.47p

 



 

Consolidated statement of comprehensive income (unaudited)

for the six months ended 30 June 2016

 

Year ended

31 December 2015

£'000


Six months ended June 2016

£'000

Six months ended June 2015

£'000

471

Profit for the period after taxation

217

437


Other comprehensive income (expense)

Items that will not be reclassified to profit or loss



182

Revaluation of land and buildings

-

-

13

Revaluation of land and buildings -  unrealised exchange gain (loss)

123

(63)

195


123

(63)


Items that may be subsequently reclassified to profit or loss



58

Unrealised exchange gain (loss) on translation of overseas subsidiaries

353

(178)

58


353

(178)

253

Other comprehensive income (expense)

476

(241)

724

Total comprehensive income for the period

693

196


Total comprehensive income (expense) attributable to:



717

Owners of the parent

693

207

7

Non-controlling interest

-

(11)

                                               



 

Consolidated statement of changes in equity (unaudited)

for the six months ended 30 June 2016

 


Share capital

£'000

Share premium

£'000

Capital reserve

£'000

Retained earnings

£'000

Translation reserve

£'000

Shares held by ESOP

£'000

Revaluation reserve

£'000

Total attributable to owners of the parent

£'000

Non-controlling interest

£'000

Total equity

£'000

At 1 January 2015

4,631

-

6,475

8,607

(2,750)

(495)

1,668

18,136

172

18,308

Comprehensive income for the period











Profit for the period after taxation

-

-

-

442

-

-

-

442

(5)

437

Other comprehensive income











Unrealised exchange loss on translation of foreign subsidiaries

-

-

-

-

(178)

-

(57)

(235)

(6)

(241)

Total other comprehensive income

-

-

-

-

(178)

-

(57)

(235)

(6)

(241)

Total comprehensive income for the period

-

-

-

442

(178)

-

(57)

207

(11)

196

Transactions with owners











Proceeds from share issue

2,313

2,984

-

-

-

-

-

5,297

-

5,297

Total transactions with owners

2,313

2,984

-

-

-

-

-

5,297

-

5,297

At 30 June 2015

6,944

2,984

6,475

9,049

(2,928)

(495)

1,611

23,640

161

23,801

Comprehensive income for the period











Profit for the period after taxation

-

-

-

32

-

-

-

32

2

34

Other comprehensive income











Gain on the revaluation of buildings

-

-

-

-

-

-

172

172

10

182

Unrealised exchange gain on translation of foreign subsidiaries

-

-

-

-

236

-

70

306

6

312

Total other comprehensive income

-

-

-

-

236

-

242

478

16

494

Total comprehensive income for the period

-

-

-

32

236

-

242

510

18

528

At 31 December 2015

6,944

2,984

6,475

9,081

(2,692)

(495)

1,853

24,150

179

24,329

Comprehensive income for the period











Profit for the period after taxation

-

-

-

217

-

-

-

217

-

217

Other comprehensive income











Unrealised exchange gain on translation of foreign subsidiaries

-

-

-

-

353

-

123

476

-

476

Total other comprehensive income

-

-

-

-

353

-

123

476

-

476

Total comprehensive income for the period

-

-

-

217

353

-

123

693

-

693

Transactions with owners











Purchase of non-controlling interest

-

-

-

-

-

-

-

-

(179)

(179)

Total transactions with owners

-

-

-

-

-

-

-

-

(179)

(179)

At 30 June 2016

6,944

2,984

6,475

9,298

(2,339)

(495)

1,976

24,843

-

24,843

 

 

 

Consolidated balance sheet (unaudited)

as at 30 June 2016

 

31 December 2015

 

£'000


30 June 2016

 

£'000

30 June 2015

 

£'000


ASSETS





Non-current assets




10,679

Property, plant and equipment


11,448

10,170

273

Intangible assets


257

176

1,586

Deferred income tax asset

1,394

1,363

12,538

Total non-current assets


13,099

11,709


Current assets




18,872

Inventories


20,139

18,378

4,017

Trade and other receivables


4,307

5,165

485

Cash and cash equivalents


358

249

                26

Current income tax recoverable


54

38

90

Deferred income tax asset

234

321

23,490

Total current assets


25,092

24,151

36,028

Total assets


38,191

35,860


LIABILITIES





Current liabilities




(92)

Deferred income tax liability

-

(62)

(4,664)

Trade and other payables


(4,660)

(4,881)

-

Current income tax liability


(13)

-

(3,806)

Interest bearing loans, borrowings and overdrafts


(5,503)

(3,216)

(8,562)

Total current liabilities


(10,176)

(8,159)


Non-current liabilities




-

Deferred income tax liability

(106)

-

(3,137)

Interest bearing loans, borrowings and overdrafts


(3,066)

(3,900)

(3,137)

Total non-current liabilities


(3,172)

(3,900)

(11,699)

Total liabilities


(13,348)

(12,059)

24,329

Net assets


24,843

23,801


EQUITY




6,944

Share capital


6,944

6,944

2,984

Share premium


2,984

2,984

6,475

Capital reserve


6,475

6,475

(495)

Shares held by ESOP


(495)

(495)

9,081

Retained earnings


9,298

9,049

(2,692)

Translation reserve


(2,339)

(2,928)

1,853

Revaluation reserve


1,976

1,611

24,150

Total equity attributable to owners of the parent


24,843

23,640

179

Non-controlling interest


-

161

24,329

Total equity


24,843

23,801

 

                              

               



 

 

 

Statement of cash flows (unaudited)

for the six months ended 30 June 2016

 

 

Year ended

31 December 2015

 

£'000


 

 

 

Note

Six months ended

30 June 2016

 

£'000

Six months ended

30 June 2015

 

£'000


Cash flows from operating activities




962

Cash generated from (used in) operations

4

(394)

(292)

(183)

Tax paid


(53)

(202)

(447)

Interest paid


(212)

(191)

332

Net cash generated from (used in) operating activities


(659)

(685)


Cash flows from investing activities




(4,350)

Purchases of property, plant and equipment


(736)

(3,978)

(108)

Purchases of intangible assets


(1)

-

-

Purchase of investments


(191)

-

(4,458)

Net cash used in investing activities


(928)

(3,978)


Cash flows from financing activities




3,651

Proceeds from borrowings


340

3,922

(1,733)

Repayment of bank loans


(376)

(957)

35

New finance lease obligations


337

35

(42)

Repayment of obligations under finance leases


(13)

(20)

5,297

Proceeds from share issue


-

5,297

7,208

Net cash generated from financing activities


288

8,277

3,082

Increase (decrease) in cash and cash equivalents


(1,299)

3,614

(4,551)

Cash and cash equivalents at beginning of period


(1,474)

(4,551)

(5)

Exchange (losses) gains on cash and cash equivalents


8

14

(1,474)

Cash and cash equivalents at end of period


(2,765)

(923)

                              



 

 

Notes (unaudited)

 

1.  Earnings per share attributable to equity shareholders of the parent

     In the period to 30 June 2016, no new shares were issued (June 2015: 4,626,651).

 

     (a)  Basic

     Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the year excluding the shares owned by the Pittards employee share ownership trust.

 

Year ended

31 December 2015

 

£'000


Six months ended

30 June 2016

 

£'000

Six months ended

30 June 2015

 

£'000

474

Profit attributable to equity holders of the company

217

442

Shares

'000


Shares

'000

Shares

'000

11,900

Weighted average number of ordinary shares in issue

13,870

9,886

 

 

(b)  Diluted

     Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares by the shares issued under the 2015 Long Term Incentive Plan (LTIP).

 

Year ended

31 December 2015

 

£'000


Six months ended

30 June 2016

 

£'000

Six months ended

30 June 2015

 

£'000

474

Profit attributable to equity holders of the company

217

442

Shares

'000


Shares

'000

Shares

'000

12,201

Weighted average number of ordinary shares in issue

14,341

9,886


                              

2.  Taxation

 

Year ended

31 December 2015

 

£'000


Six months ended

30 June 2016

 

£'000

Six months ended

30 June 2015

 

£'000


Analysis of the charge in the period

The charge based on the profit for the year comprises:



2

Corporation tax on profit for the year

-

-

30

Foreign tax on profit for the year

13

13

-

Foreign tax related to prior years

27

-

32

Total current tax

40

13


Deferred tax



(28)

Origination and reversal of temporary differences

57

105

180

Impact of change in UK tax rate

-

-

152

Total deferred tax

57

105

184

Income tax charge

97

118

 



 

 

3.  Deferred taxation

     The Group has recognised and unrecognised deferred tax assets in respect of temporary differences and losses.

Year ended

31 December 2015

 

£'000


Six months ended

30 June 2016

 

£'000

Six months ended

30 June 2015

 

£'000


Deferred tax assets



1,586

Deferred tax asset to be recovered after more than 12 months                

1,394

1,363

90

Deferred tax asset to be recovered within 12 months

234

321

1,676


1,628

1,684


Deferred tax liabilities



(92)

Deferred tax liability to be realised after more than 12 months                

(106)

(62)

-

Deferred tax liability to be realised within 12 months

-

-

(92)


(106)

(62)

1,584

Deferred tax assets (net)

1,522

1,622

 

4. Cash used in operations

Year ended

31 December 2015

£'000

 


Six months ended

30 June 2016

£'000

Six months ended

30 June 2015

£'000

655

Profit before taxation

314

555


Adjustments for:



456

Depreciation of property plant and equipment

283

215

22

Amortisation

17

11

447

Bank and other interest charges

210

191

(47)

Other non-cash items in Income Statement

(10)

7

1,533

Operating cash flows before movement in working capital

814

979


Movements in working capital (excluding exchange differences on consolidation)



(1,003)

Increase in inventories

(651)

(835)

911

Decrease (increase) in trade and other receivables

(213)

(378)

(479)

Decrease in trade and other payables

(344)

(58)

962

Cash used in operations

 

(394)

(292)

                              

                                                                                                                                                                                                                             


 

5. Basis of preparation

     The financial information contained in this interim statement has not been audited or reviewed by the Company's auditor and does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The directors approved and authorised this interim statement for issue on 20 September 2016. The financial information for the full preceding year is extracted from the statutory accounts for the financial year ended 31 December 2015. Those accounts, upon which the auditor issued an unqualified opinion, have been delivered to the Registrar of Companies. The auditor's report did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

     Pittards plc is a public limited company incorporated and domiciled under the Companies Act 2006 in England. It is quoted on the Alternative Investment Market ("AIM").

     These financial statements are presented in sterling as that is considered to be the functional currency of the primary economic environment in which the Group operates.

     As permitted this interim report has been prepared in accordance with UK AIM listing rules and not in accordance with IAS 34 "Interim Financial Reporting" therefore it is not fully in compliance with IFRS.

 

6. Availability of interim report

     The interim report will be available at the Company's website www.pittards.com, in accordance with AIM Rule 20.

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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