Issued on behalf of Leeds Group plc Embargoed: 7.00am
Date: 23 January 2023
Leeds Group plc
("Leeds Group" or "the Group" or "the Company'')
Unaudited Interim Results for the six months ended 30 November 2022
The unaudited interim results of Leeds Group for the six months ended 30 November 2022 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
The continuing activities of the Group are that of a textile wholesaler and are conducted through its German trading subsidiary Hemmers-Itex Textil Import Export GmbH ("Hemmers"). Stoff-Ideen-KMR GmbH ("KMR"), a subsidiary of Hemmers, was placed into an insolvency process on 7 October 2022.
The Group's turnover in the first six months of the financial year is in line with last year at £15,575,000 (2021: £15,592,000): The Group made a reduced loss before tax of £224,000 (2021: loss of £487,000).
Hemmer's turnover increased slightly to £12,679,000 (2021: £12,668,000) and the company made a loss of £164,000 (2021: loss of £192,000). Trading is currently in line with forecast and the cost cutting measures taken last year are providing a good platform on which to rebuild a profitable business.
KMR's turnover decreased to £2,896,000 (2021: £2,924,000) and the company made a loss of £75,000 (2021: loss of £242,000). A property owned by KMR was sold in the period realising £517,000 and resulted in a gain of £138,000. Although in insolvency, KMR is still trading as it sells down the stock held in its shops.
Group net bank debt, as analysed in note 5, was £6,131,000 as at 30 November 2022 (30 November 2021: £5,877,000; 31 May 2022: £6,381,000). Cash at bank as at 30 November was £1,845,000, of which £1,677,000 related to KMR. This will be used by the insolvency administrator to pay any outstanding KMR liabilities including £863,000 of bank debt.
The Board and the Hemmers management are committed to returning Hemmers to profitability and with the KMR insolvency, they can focus solely on achieving this goal.
Jan G Holmstrom
Chairman
23 January 2023
Consolidated Statement of Comprehensive Income
for the six months ended 30 November 2022
| Unaudited 6 months to 30 November 2022 £000 | Unaudited 6 months to 30 November 2021 £000 | Audited Year to 31 May 2022 £000 |
Continuing operations Revenue |
15,575 |
15,592 |
29,590 |
Cost of sales | (12,666) | (12,514) | (24,121) |
|
| | |
Gross profit | 2,909 | 3,078 | 5,469 |
|
| | |
Distribution costs | (1,363) | (1,250) | (2,483) |
|
| | |
Impairment of assets | - | - | (1,662) |
Administrative costs | (1,664) | (2,188) | (4,461) |
Total administrative costs | (1,664) | (2,188) | (6,123) |
|
| | |
Other income | 75 | - | 147 |
|
| | |
Total loss from operations | (43) | (360) | (2,990) |
|
| | |
Finance expense | (181) | (127) | (255) |
|
| | |
Loss before taxation | (224) | (487) | (3,245) |
|
| | |
Taxation | 113 | - | (4) |
|
| | |
Loss for the period/year attributable to the equity holders of the Parent Company |
(111) |
(487) |
(3,249) |
|
| | |
Other comprehensive income/(loss) for the period/year |
130 |
(101) |
(135) |
|
| | |
Total comprehensive income/(loss) for the period/year attributable to the equity holders of the Company |
19 |
(588) |
(3,384) |
Loss per share for profit attributable to the equity holders of the Company
| Unaudited 6 months to 30 November 2022 | Unaudited 6 months to 30 November 2021 | Audited Year to 31 May 2022 |
|
| | |
Basic and diluted total loss per share (pence) |
0.4p |
1.8p |
11.9p |
Consolidated Statement of Financial Position
at 30 November 2022
| Unaudited As at 30 November 2022 £000 | Unaudited As at 30 November 2021 £000 | Audited As at 31 May 2022 £000 |
Assets |
| | |
Non-current assets | | | |
Property, plant and equipment | 6,689 | 7,631 | 7,335 |
Right-of-use assets | 173 | 2,175 | 170 |
Intangible assets | 53 | 57 | 52 |
|
| | |
Total non-current assets | 6,915 | 9,863 | 7,557 |
|
| | |
Current assets |
| | |
Inventories | 11,227 | 12,446 | 11,994 |
Trade and other receivables | 3,472 | 3,755 | 2,864 |
Corporation tax recoverable | - | 61 | 13 |
Cash and cash equivalents | 1,845 | 216 | 471 |
|
| | |
Total current assets | 16,544 | 16,478 | 15,342 |
|
| | |
Total assets | 23,459 | 26,341 | 22,899 |
|
| | |
Liabilities |
| | |
Non-current liabilities |
| | |
Loans and borrowings | (697) | (987) | (836) |
Lease liabilities | (953) | (1,006) | (1,165) |
|
| | |
Total non-current liabilities | (1,650) | (1,993) | (2,001) |
|
| | |
Current liabilities |
| | |
Trade and other payables | (2,699) | (3,649) | (3,065) |
Loans and borrowings | (7,279) | (5,102) | (5,671) |
Lease liabilities | (635) | (1,524) | (885) |
Provisions | - | (100) | (100) |
|
| | |
Total current liabilities | (10,613) | (10,375) | (9,721) |
|
| | |
Total liabilities | (12,263) | (12,368) | (11,722) |
|
| | |
TOTAL NET ASSETS | 11,196 | 13,973 | 11,177 |
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 | 2,180 | 2,084 | 2,050 |
Retained earnings | 4,624 | 7,497 | 4,735 |
| | | |
TOTAL EQUITY | 11,196 | 13,973 | 11,177 |
Consolidated Cash Flow Statement
for the six months ended 30 November 2022
| Unaudited 6 months to 30 November 2022 £000 | Unaudited 6 months to 30 November 2021 £000 | Audited Year to 31 May 2022 £000 |
|
Cash flows from operating activities |
| | |
|
Loss for the period/year | (224) | (487) | (3,249) | |
Adjustments for: |
| | | |
Government assistance credit | - | - | (119) | |
Depreciation of property, plant and equipment | 399 | 334 | 735 | |
Impairment of property, plant and equipment | - | - | 42 | |
Depreciation of right-of-use assets | 56 | 461 | 827 | |
Impairment of right-of-use assets | - | - | 1,620 | |
Amortisation of intangible assets | - | - | 5 | |
Finance expense - interest on bank loans | 153 | 89 | 179 | |
Finance expense - interest on lease liabilities | 28 | 38 | 76 | |
Gain on sale of property | (138) | - | - | |
Taxation credit | - | - | 4 | |
|
| | | |
Cash flows generated from operating activities before changes in working capital and provisions |
274 |
435 |
120 | |
Decrease/(increase) in inventories | 947 | (2,254) | (1,818) | |
(Increase) in trade and other receivables | (1,169) | (677) | (43) | |
Increase in trade and other payables | 499 | 1,386 | 722 | |
|
| | | |
Cash generated from/(used in) operating activities | 551 | (1,110) | (1,019) | |
Taxation received | 28 | 73 | 114 | |
|
| | | |
Net cash flows generated from/(used in) operating activities |
579 |
(1,037) |
(905) | |
|
| | | |
Investing activities |
| | | |
Purchase of property, plant and equipment | (22) | (283) | (447) | |
Proceeds from sale of property | 517 | - | | |
|
| | | |
Net cash generated from/(used in) investing activities | 495 | (283) | (447) | |
|
| | | |
Financing activities |
| | | |
Bank borrowings drawn | 1,515 | 2,272 | 2,835 | |
Bank borrowings repaid | (150) | (564) | (708) | |
Repayment of principal on lease liabilities | (542) | (519) | (983) | |
Repayment of interest on lease liabilities | (28) | (38) | (76) | |
Bank interest paid | (153) | (89) | (179) | |
Government assistance received | - | - | 119 | |
|
| | | |
Net cash generated from financing activities | 642 | 1,062 | 1,008 | |
|
| | | |
Net increase/(decrease) in cash and cash equivalents | 1,716 | (258) | (344) | |
Translation gain/(loss) on cash and cash equivalents | 3 | (2) | (2) | |
Cash and cash equivalents at beginning of period/year | 126 | 472 | 472 | |
|
| | | |
Cash and cash equivalents at end of period/year | 1,845 | 212 | 126 | |
|
| | | |
Cash on demand or on short term deposit | 1,845 | 216 | 471 | |
Bank overdrafts | - | (4) | (345) | |
Cash and cash equivalents at end of period/year | 1,845 | 212 | 126 |
Consolidated Statement of Changes in Equity
for the six months ended 30 November 2022
Unaudited | Share capital
£000 | Capital redemption reserve £000 | Foreign exchange reserve £000 | Retained earnings
£000 | Total equity
£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 |
Unaudited | Share capital
£000 | Capital redemption reserve £000 | Foreign exchange reserve £000 | Retained earnings
£000 | Total equity
£000 |
| | | | | |
At 1 June 2021 | 3,279 | 1,113 | 2,185 | 7,984 | 14,561 |
Loss for the period | - | - | - | (487) | (487) |
Other comprehensive loss | - | - | (101) | - | (101) |
| | | | |
|
At 30 November 2021 | 3,279 | 1,113 | 2,084 | 7,497 | 13,973 |
Audited | Share capital
£000 | Capital redemption reserve £000 | Foreign exchange reserve £000 | Retained earnings
£000 | Total equity
£000 |
| | | | | |
At 1 June 2021 | 3,279 | 1,113 | 2,185 | 7,984 | 14,561 |
Loss for the year | - | - | - | (3,249) | (3,249) |
Other comprehensive loss | - | - | (135) | - | (135) |
| | | | |
|
At 31 May 2022 | 3,279 | 1,113 | 2,050 | 4,735 | 11,177 |
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 |
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 2022
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 2022 and 30 November 2021 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 that are expected to apply in the preparation of the next annual financial statements. 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 2022 does not constitute the Company's statutory accounts. The financial statements for the year ended 31 May 2022 have been filed with the Registrar of Companies and the Independent Auditor's Report was unqualified however drew attention to a material uncertainty regarding the going concern of the Group. The Independent Auditor's Report did not refer to any matters in respect of s498(2) and (3) of the Companies Act 2006.
The Group's financial statements for the year ended 31 May 2022 included a post balance sheet event note explaining that KMR was placed into an insolvency process, which was accepted by the German courts on 7 October 2022. Under German law, there was an initial period of three months where KMR was operated as a trading entity under the joint control of the KMR management and the insolvency administrator. Following this period, the administrator has assumed full responsibility for the operations of KMR and will look to realise its assets and pay any liabilities due in accordance with German insolvency law.
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 given due consideration to:
· The performance of the Group in the last financial year and the robustness of forecasts for period to 31 May 2024, which return the Group to profit.
· The impact of the ongoing Ukraine conflict on the business, its suppliers and its customers.
· The financing facilities available to the Group and the circumstances in which these could be limited or withdrawn.
Forecasts have been prepared for the period to May 2024 which indicate a return to modest profit over that period due to cost reductions. These forecasts have been prepared in the knowledge of current Ukraine conflict conditions and the continuing impact on the German and global economies. Considering the trading results in the first half of the current financial year and the decision to put KMR into insolvency, the Directors consider there will be sufficient headroom available on the Hemmers working capital facility and, therefore, 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 6 months to 30 November 2022 £000 | Unaudited 6 months to 30 November 2021 £000 | Audited Year to 31 May 2022 £000 |
|
| | |
Number of shares (basic and diluted) | 27,320,843 | 27,320,843 | 27,320,843 |
3. Segmental information
Group external revenue
| Unaudited 6 months to 30 November 2022 £000 | Unaudited 6 months to 30 November 2021 £000 | Audited Year to 31 May 2022 £000 |
Continuing operations Hemmers |
12,679 |
12,668 |
23,998 |
KMR | 2,896 | 2,924 | 5,592 |
|
| | |
Group external revenue | 15,575 | 15,592 | 29,590 |
Group loss before tax | Unaudited 6 months to 30 November 2022 £000 | Unaudited 6 months to 30 November 2021 £000 | Audited Year to 31 May 2022 £000 |
Continuing operations |
| | |
Hemmers | (164) | (192) | (793) |
Holding company | 15 | (53) | (82) |
KMR | (75) | (242) | (2,370) |
|
| | |
Group loss before tax | (224) | (487) | (3,245) |
Group net assets
| Unaudited As at 30 November 2022 £000 | Unaudited As at 30 November 2021 £000 | Audited As at 31 May 2022 £000 |
Continuing operations |
| | |
Hemmers | 9,604 | 9,931 | 9,301 |
Holding company | 2,770 | 2,750 | 2,720 |
KMR | (1,178) | 1,292 | (844) |
|
| | |
Group net assets | 11,196 | 13,973 | 11,177 |
4. Analysis of net bank debt
| Unaudited As at 30 November 2022 £000 | Unaudited As at 30 November 2021 £000 | Audited As at 31 May 2022 £000 |
|
| | |
Cash on demand and on short term deposit | 1,845 | 216 | 471 |
Bank overdrafts | - | (4) | (345) |
Current loans and borrowings | (7,279) | (5,102) | (5,671) |
Non - current loans and borrowings | (697) | (987) | (836) |
|
| | |
Net bank debt at end of period/year | (6,131) | (5,877) | (6,381) |
Current loans and borrowings
At 30 November 2022, current loans and borrowings of £7,279,000 (2021: £5,102,000) comprise short term loans of £6,976,000 and instalments due on long term loans detailed below of £303,000. The interest rate on the short-term loans ranges from 1.5% to 3% (2021: 1.5% to 3%) and these loans are secured on working capital of Hemmers and KMR. The short-term loans are drawn down by Hemmers against short-term borrowing facilities of up to a maximum of £9.9m (€11.5m) and by KMR against short-term borrowing facilities of £0.9m (€1m).
Non-current loans and borrowings
The Group's non-current loans and borrowings are within the accounts of Hemmers and are denominated in Euros as follows:
| Fixed interest rate | Repayment profile | Final repayment date | Unaudited As at 30 November 2022 £000 | Unaudited As at 30 November 2021 £000 | Audited As at 31 May 2022 £000 |
|
|
|
|
| | |
Loan 1 | 1.65% | Equal quarterly instalments | September 2025 | 479 | 710 | 590 |
Loan 2 | 1.05% | Equal quarterly instalments | March 2026 | 218 | 277 | 246 |
|
|
|
|
| | |
Non-current loans |
| 697 | 987 | 836 |
5. 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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