RNS Number : 5236A
Pittards PLC
26 September 2022
 

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.

 

Pittards plc

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

Interim results for the six months ended 30 June 2022

 ("First Half" or "H1 2022")

 

Positive trading momentum maintained

 

Continued growth in revenue and profitability, stable order book

Interim Dividend declared

 

Pittards plc, the specialist producer of technically advanced leather and luxury leather goods for retailers, manufacturers and distributors, today announces its interim results for the six month ended 30 June 2022.

Commenting on the results, Chairman, Stephen Yapp, said:

"I am pleased to report a solid performance in the First Half with profitability and EBITDA consistent with the achievement of market expectations for the year as a whole. This has been achieved against the backdrop of a turbulent global trading environment including inflation, increasing energy costs and supply chain reliability challenges. The whole team has responded with vigour and flexibility, and I thank them for their efforts."

"The Directors are pleased to declare an interim dividend of 0.5p per share, which we plan to pay in January 2023."

Highlights: Financial

·    Group revenues up 7% to £10.37m (H1 2021: £9.66m)

·    Gross margin of 30% (H1 2021: 28%)

·    EBITDA of £0.83m positive (H1 2021: £0.75m) an 11% improvement

·    Profit before taxation up 31% to £0.34m (H1 2021: £0.26m)

·    Net debt of £11.18 (H1 2021: £10:04m)

·    Earnings per share (basic) up 63% to 2.54 pence (H1 2021: 1.55 pence)

·    Interim dividend declared of 0.5 pence per share (H1 2021: 0.5 pence per share)

 

Highlights: Operational

·    Continued strengthening of the management team

·    Sales order book continues to be steady

·    Acquisition of Hill and Friends adds another luxury brand to portfolio

·    A diversified portfolio of products and markets enabling future growth opportunities

·    Ethiopian business steadily recovering post COVID-19

Commenting on the outlook for the Full Year, Reg Hankey, Chief Executive said:

"The Group is continuing to make good progress implementing its strategy. The global inflationary climate and complexity of supply chains, together with the current energy crisis, is making the trading environment more challenging. The close management of cash remains a priority under these circumstances."

"We continue to see more opportunities than risk in the current climate and are cautiously optimistic looking forward.  Our investment in staff and the strengthening of our management form a solid foundation for sustained growth and the delivery of strategic opportunities. Whilst the global economic and geo-political environment remains challenging, I am proud of our staff's dedication and commitment which reflects our heritage of 200 years."

For further information, please contact:

Pittards plc

www.pittards.com

Stephen Yapp, Chairman

Reg Hankey, CEO

Alan Burgess, Group Finance Director

+44 (0) 1935 474 321

 

WH Ireland Limited

www.whirelandcb.com

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

 

 

 

Chief Executive Officer's report

Overview

We have delivered against our key objectives in H1 2022, with solid financial results and clear strategic progress made.

The Group performed well in the First Half, with sales revenue of £10.4m, an increase of 7% compared to H1 2021 and a 4% rise compared to H2 2021.  PBT at £0.34m also improved over H1 2021 (£0.26m) and (H2 2021: -£0.16m).

This performance has been delivered against a backdrop of macroeconomic trading conditions that are very complex, particularly the unreliability of supply of materials into our businesses, together with increasing costs, requiring us to adjust processes and plans continuously.

Our agile and responsive team approach is well adapted to adjust to these challenging conditions, and we are nurturing many new opportunities, building upon our strategy which is serving us well.

90% of our sales revenue was from export markets and 80% of this revenue was denominated in $USD.  The continued strengthening of the $USD will be beneficial to our business in the medium term, but as reported in our full year 2021 accounts we have a hedging policy in place which protects the downside of currency appreciations but also delays the benefits of sterling weakness.

The current inflationary climate is predominantly driven by energy and shipping costs effecting businesses globally and as such we have been able to hold or increase selling prices generally.  Some local inflation is directly related to the weakness of the pound which will have some affect upon us until the increased revenue from sales comes through post hedging.

Our inventory value has increased during the First Half as replacement costs of materials have been higher than older stock.  However, overall, our older stocks and the overall volume of stock has reduced.

Net debt has increased marginally but is mitigated by inventory, capital expenditure, and movement in receivables and trade payables.

Our businesses in Ethiopia remain fully open and our shoe and glove production continues to develop.  The effects of COVID19 have eased although local economic challenges have resulted in limited access to hard currency.  We have been able to adjust our business model in order to mitigate this.  Our investment in Ethiopia is helping to counter the global pressures on energy costs, as most of Ethiopia's power generation is from hydroelectric green power.

Our consumer product range in the UK continues to develop with growing third-party opportunities, as well as for our own brands. We have delivered further organic growth and announced the acquisition of Hill and Friends, a luxury consumer brand to add to our growing portfolio of brands. This will support us in our planned development.

Sustainability underpins everything we do and is embedded in all aspects of our decision making.

We have been able to continue recruiting, retaining, and developing our staff base in support of our strategic plan.

Our sales order book has remained strong across both our core and new market sectors.

Key performance indicators 2022  

 








First half 2022 v

Second half 2021


First half 2022 v

 First half 2021





 

2022

H1

2021

H2

Change

 

2022

H1

2021

H1

 

Change






£m

£m

 

 

£m

 

£m

 

 

Revenue





10.37

9.96

0.41


10.37

9.66

 

0.71

Gross profit





3.09

2.76

0.33


3.09

2.69

 

0.40

Gross margin





30%

28%

2%


30%

28%

 

2%

Profit / (Loss) before tax

 

 

 

 

0.34

0.16

0.18


0.34

0.26

 

0.08

EBITDA





0.83

0.66

0.17


0.83

0.75

 

0.08

Net assets





12.58

13.80

(1.23)


12.58

13.56

 

(0.98)

Inventory





16.06

15.32

0.74


16.06

14.97

 

1.09

Net debt





11.18

10.69

(0.49)


11.18

10.04

 

(1.14)

Net debt adjusted for treasury shares held




10.58

10.29

0.29


10.58

 

9.54

 

(1.04)

Gearing



 







·      Group



89%

78%

(11%)


89%

 

74%

 

(15%)

·      UK





55%

59%

4%


55%

 

49%

 

(6%)

Staff numbers





1,095

1,108

(13)


1,095

 

1,125

 

(30)

Basic earnings per share (in pence)





2.54

2.12

0.42


2.54

 

1.55

 

0.99

Net Asset per share (in pence)




 

97.12

101.92

(4.80)


97.12

 

104.64

 

(7.52)

 

Dividend

The Directors are declaring an interim dividend of 0.5 pence pe ordinary share in the capital of the Company, to be paid on 12 January 2023 to shareholders on the register at the close of business on Friday 16 December 2022.  The shares will go ex-dividend on Thursday 15 December 2022.

Outlook 

The Group continues to make good progress with its strategy. The global inflationary climate and complexity of supply chains, together with the current energy crisis, is making the trading environment more challenging. The close management of cash remains a priority under these circumstances.

We continue to see more opportunities than risk in the current climate and are cautiously optimistic looking forward.  Our investment in staff and the strengthening of our management will form a solid foundation for sustained growth and the delivery of strategic opportunities. 

Group Finance Director's report

Overview

Pittards performed very well in the First Half, with like for like growth of 7% compared to H1 2021 and revenue increased by 4% compared with H2 2021, approaching pre-COVID-19 levels. The financial strength of the Group reflects the benefits of the actions we took during the pandemic and a positive customer reaction to the Group's products and strategy.

Our careful planning and agile supply chains have enabled us to mitigate some of the difficulties in global logistics, utilising the vertical integration within the Group.

Profitability

Profit before tax in the First Half was £0.34m, improving on the £0.16m achieved in H2 2021. This was due to increases in volume combined with tight cost control. Gross margin increased to 30% (H1 2021: 28%), with EBITDA increased to £0.83m (H1 2021: £0.75m) an improvement of 11%.

Financial support and banking facilities

We have not sought any additional lending throughout the First Half and banking facilities remained sufficient to support planned growth.

Cost control and productivity

Headcount has stabilised at 1,095 as of 30 June 2022 (H1 2021: 1,125).

Assets and currency

At the end of the First Half, net assets stood at £12.58m (H2 2021: £13.80m). The reduction is predominantly due to the fair value of our hedging strategy, as of 30 June 2022, as a result of the weakening pound. Net debt increased by £0.49m to £11.18m (H2 2021: £10.69m). Our forward currency hedging strategy continues to the end of FY 2023 on a reducing percentage cover basis.

Energy costs

Escalating energy costs remain a challenge although we have some hedging in place which will help to mitigate energy cost increases.

Working capital

Inventory levels increased to £16.06m (H2 2021: £15.32m).  Despite a value increase in inventory, we have seen an overall reduction in the total amount of inventory held.  Due to higher input costs, we estimate that inventory will continue to increase in value per sq ft.

Net working capital remains steady at £14.75m (H2 2021: £14.79m), although this is affected by the recognition, at the half year, of USD forward hedging contracts. As a result of the progressive weakness of sterling, the fair value loss on future contracts is H1 2022: negative £0.934m (H2 2021: negative £0.381m).  In the fulness of time the extra revenue generated from the conversion of $USD sales will offset this.

Gearing

Group gearing was 89% (H2 2021: 78%), with UK gearing within covenant levels at 55% (H2 2021: 59%).

Consolidated Income Statement

 

 

 



Six months ended


Six months ended


Year ended

for the six months ended 30 June 2022


30/06/2022


30/06/2021


31/12/2021





 



Unaudited


Unaudited


Audited





 

Note


£'000


£'000


£'000





 



 





Revenue




 



10,370


9,659


19,655

Cost of sales




 



(7,280)


(6,965)


(14,198)

Gross profit




 



3,090


2,694


5,457





 



 





Distribution costs




 



(910)


(804)


(1,631)

Currency gains / (losses)




 



(108)


195


266

Administrative expenses




 



(1,452)


(1,582)


(3,176)

Profit / (Loss) before operations and finance costs

 

 

 

 

 

620

 

503


916





 



 





Finance costs




 



(283)


(239)


(459)





 



 





Profit / (Loss) before taxation




 



337


264


457





 



 





Taxation




 

3


(9)


(63)


(182)

Profit / (Loss) after taxation

 

 

 

 

 

 

328

 

201


275





 

 


 





Earnings per share




 

2


 





Basic




 



2.54p


1.55p


2.12p

Diluted




 



2.54p


1.55p


2.12p

 

Consolidated Statement of Comprehensive Income  

 





 

for the six months ended 30 June 2022


 





 





 



Six months ended


Six months ended


Year ended

 





 



30/06/2022


30/06/2021


31/12/2021

 





 



Unaudited


Unaudited


Audited

 





 

 


£'000


£'000


£'000

 





 



 





 

Profit / (Loss) for the period after taxation




 



328


201


275

 





 



 





 

Other comprehensive (expense)/income




 



 





 

Revaluation of land and buildings




 



-


185


453

 

Revaluation of land and buildings - unrealised exchange (loss)


 



135


(372)


(517)

 





 



135


(187)


(64)

 





 



 





 

Unrealised exchange (loss) on translation of overseas subsidiaries


 



(26)


(254)


(551)

 

Fair value (losses) on foreign currency cash flow hedges


 



(934)


(84)


(381)

 





 



(960)


(338)


(932)

 





 



 





 

Other comprehensive (loss)




 



(825)


(525)


(996)

 





 



 





 

Total comprehensive (loss) for the period

 

 

 

 

 

 

(497)

 

(324)


(721)

 





 



 





 























 

 

Consolidated balance sheet as at 30 June 2021 

 

 

 

Note


Six months ended 30/06/2022 Unaudited


Six months ended 30/06/2021 Unaudited


Year ended 31/12/2021     Audited

 






£'000


£'000


£'000

 





 



 





 

Assets




 



 





 

Non-current assets




 



 





 

Property, plant, and equipment




 



9,792


9,796


9,700

 

Intangible assets




 



55


72


63

 

Deferred tax asset




 

4


100


100


100

 

Total non-current assets




 



9,947


9,968


9,863

 





 



 





 

Current assets




 



 





 

Inventories




 



16,060


14,966


15,316

 

Trade and other receivables




 



3,379


3,111


3,304

 

Cash and cash equivalents




 



71


161


51

 

Total current assets




 



19,510


18,238


18,671

 





 



 





 

Total assets




 



29,457


28,206


28,534

 





 



 





 

Liabilities




 



 





 

Current liabilities




 



 





 

Trade and other payables




 



4,688


3,690


3,830

 

Interest bearing loans, borrowings, and overdrafts




 



8,573


7,489


7,783

 

Total current liabilities




 



13,261


11,179


11,613

 





 



 





 

Non-current liabilities




 



 





 

Deferred tax liability




 

4


939


758


900

 

Interest bearing loans, borrowings, and overdrafts




 



2,682


2,714


2,955

 

Total non-current liabilities




 



3,621


3,472


3,855

 





 



 





 

Total liabilities




 



16,882


14,651


15,468

 





 



 





 

Net assets




 



12,575


13,555


13,066

 





 



 





 

Equity




 



 





 

Share capital




 



6,944


6,944


6,944

 

Share premium




 



2,984


2,984


2,984

 

Capital reserve




 



6,475


6,475


6,475

 

Own Share Reserve




 



(379)


(355)


(375)

 

Share based payment reserve




 



62


59


56

 

Cash flow hedge reserve




 



(1,022)


209


(88)

 

Translation reserve




 



(5,499)


(5,176)


(5,473)

 

Revaluation reserve




 



1,170


912


1,035

 

Retained earnings




 



1,840


1,503


1,508

 

Total equity




 



12,575


13,555


13,066

 

 

 



 





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 























 

 

Consolidated Statement of Changes in Equity 

 



 





for the six months ended 30 June 2022

 

 

 

 

 

 

 

 

 

 

Share capital

Share premium

Capital Reserve

Own share reserve

Share based payment         reserve

Cash flow hedge reserve

Translation reserve

Revaluation reserve

Retained Earnings

Total Equity

 

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

 

 

As at 1 January 2021


6,944

2,984

6,475

(850)

47

293

(4,922)

1,099

1,788

13,858

Comprehensive income/(loss) for the year:

Profit for the period after taxation


-

-

-

-

-

-

-

-

201

201

Other comprehensive income/(loss):

Unrealised exchange gain/(loss) on translation of foreign subsidiaries


-

-

-

-

-

-

(254)

(372)

-

(626)

Fair value losses on foreign currency cash flow hedges


-

-

-

-

-

(84)

-

-

-

(84)

Total other comprehensive income/(loss)


-

-

-

-

-

(84)

(254)

(372)

201

(324)

Total comprehensive income/(loss) for the year

 

-

-

-

-

-

(84)

(254)

(372)

201

(324)

ESOP scheme closed

 

-

-

-

495

-

-

-

-

(486)

9

As at 30 June 2021


6,944

2,984

6,475

(355)

59

209

(5,176)

727

1,503

13,358

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income/(loss) for the year:

Other comprehensive income/(loss):




 



 





Gain on the revaluation of buildings


-

-

-

-

-

-

-

453

74

527

Unrealised exchange gain/(loss) on translation of foreign subsidiaries


-

-

-

-

-

-

(297)

(145)

-

(442)

Fair value losses on foreign currency cash flow hedges


-

-

-

-

-

(297)

-

-

-

(297)

Total other comprehensive income/(loss)


-

-

-

-

-

(297)

(297)

308

74

(212)

Total comprehensive (loss) for the year

 

-

-

-

-

-

(297)

(297)

308

74

(212)

Purchase of own shares


-

-

-

(20)

-

-

-

-

(4)

(24)

Share-based payment expense


-

-

-

-

9

-

-

-

-

9

Dividends paid


-

-

-

-

-

-

-

-

(65)

(65)

As at 31 December 2021


6,944

2,984

6,475

(375)

56

(88)

(5,473)

1,035

1,508

13,066





 



 





Comprehensive income/(loss) for the year:

Profit for the period after taxation


-

-

-

-

-

-

-

-

328

328

Other comprehensive income/(loss):












Gain on the revaluation of buildings


-

-

-

-

-

-

-

-

-

-

Unrealised exchange gain/(loss) on translation of foreign subsidiaries


-

-

-

-

-

-

(26)

135

-

109

Fair value losses on foreign currency cash flow hedges


-

-

-

-

-

(934)

-

-

-

(934)

Total other comprehensive (loss)


-

-

-

-

-

(934)

(26)

135

-

(825)

Total comprehensive (loss) for the period


-

-

-

-

-

(934)

(26)

135

328

(497)

Share-based payment expense


-

-

-

-

6

-

-

-

-

6

As at 30 June 2022

 

6,944

2,984

6,475

(375)

62

(1,022)

(5,499)

1,170

1,836

12,575

 

 

Statement of cashflows for the period ended 30 June 2022 

 

Six months ended


Six months ended


Year ended

 




 



30/06/2022


30/06/2021


31/12/2021

 




 



Unaudited


Unaudited


Audited

 




 

Note


£'000


£'000


£'000

 




 



 





Cash flows from operating activities




 



 





Cash generated from / (used in) operations




 

5


(204)


978


181

Tax (paid)




 



-


(83)


(83)

Interest (paid)




 



(283)


(256)


(447)

Net cash generated from / (used in) operating activities


 



(487)


639


(349)

 

 




 



 





 

Cash flows from investing activities




 



 





 

Purchases of property, plant, and equipment




 



(128)


(828)


(372)

 

Purchases of intangible assets




 



(1)


(12)


(11)

 

Proceeds from sale of plant




 



-


44


42

 

Net cash (used) in investing activities

 

 

 

 

 

 

(129)

 

(796)


(341)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities




 



 





 

Proceeds from borrowings




 



-


-


-

 

Repayment of bank loans




 



(200)


(481)


(733)

 

Repayment of obligations under finance leases




 



-


(21)


(21)

 

Payment of equity dividends




 



-


-


(65)

 

Purchase of own ordinary shares




 



-


-


(20)

 

Net cash (used) / generated in financing activities

 

 

 



(200)


(502)


(839)

 

(Decrease) / Increase in cash and cash equivalents

 

 

 



(816)


(659)


(1,529)

 





 



 





 

Cash and cash equivalents at beginning of year




 



(6,060)


(5,077)


(5,077)

 

Exchange gains/(losses) on cash and cash equivalents



 



(41)


41


238

 

Cash and cash equivalents at end of year

 

 

 

 

 

 

(6,917)

 

(5,695)


(6,368)

 






















 

 

 

Note 1 - Basis of preparation 

 



 





 


The financial information set out in the interim statements for the six months ended 30 June 2022 and the comparative figures are unaudited and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006. 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 International Financial Reporting Standards (IFRS).

 






The financial information for the full preceding year is extracted from the statutory accounts for the financial year ended 31 December 2021. 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.







These financial statements have been prepared using the same accounting policies and methods of computation as the most recent statutory accounts for the financial year ended 31 December 2021.




















These financial statements are presented in sterling, being the functional currency of the primary economic environment in which the Group operates.





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").








 



 







The directors approved and authorised the interim statement for issue on 23 September 2022. 

 

 









 



 







Note 2 -  Earnings per share 


 







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 held in treasury.













30/06/22


30/06/21


31/12/21

 


Earnings per share






Unaudited


Unaudited


Audited

 


Basic






2.54p


1.55p


2.12p

 


Weighted average number of ordinary shares in issue (000)






12,914


12,954


12,946

 








 





 








 





 


b) Diluted earnings per share






Six months ended


Six months ended


Year ended

 








30/06/22


30/06/21


31/12/21

 


Earnings per share






Unaudited


Unaudited


Audited

 


Diluted






2.54p


1.55p


2.12p

 


Weighted average number of ordinary shares in issue (000)






12,914


12,954


12,946

 

































 

 

Note 3 - Taxation






Six months ended


Six months ended


Year ended







30/06/22


30/06/21


31/12/21







Unaudited


Unaudited


Audited







 





Analysis of the charge in the period 






 





The charge based on the profit for the period comprises:





 





Foreign tax on profit for the period






9


63


10

Foreign tax related to prior years






-


-


148

Total current tax






9


63


158







 





Deferred tax






 





Origination and reversal of temporary differences






-


-


24

Total deferred tax






-


-


24







 





Income tax charge

 

 

 

 

 

9

 

63


182







 





Note 4 Deferred taxation






Six months ended


Six months ended


Year ended







30/06/22


30/06/21


31/12/21







Unaudited


Unaudited


Audited







 


 


 

Deferred tax asset 






100


100


100

Deferred tax (liabilities)






(939)


(758)


(900)

Deferred tax (liabilities) - net






(839)


(658)


(800)

 





 


30/06/2022


30/06/2021


31/12/2021





 


Unaudited


Unaudited


Audited





 


£'000


£'000


£'000

Profit / (Loss) before taxation




 


337


264


457

Adjustments for:




 


 





Depreciation of property, plant, and equipment




 


197


234


475

Amortisation of intangibles




 


9


15


23

Bank and other interest charges




 


189


256


447

Share based payment expense




 


6


12


9

Other non-cash items in Income Statement




 


(159)


(135)


(556)

Operating cash flows before movement in working capital

 

 

 

579

 

646


855

Movements in working capital (excluding exchange differences on consolidation):

 


 





 (Increase) / Decrease in inventories




 


(597)


(91)


(1,100)

 (Increase) / Reduction in receivables




 


(75)


(378)


(507)

Increase / (Reduction) in payables




 


(111)


801


933

Cash generated / (used) in operations

 

 

 

 

 

(204)

 

978


181













 

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.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
IR DZGZLVFLGZZM