RNS Number : 4753N
Leeds Group PLC
23 January 2023
 

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.

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

 

5Forward-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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