13th Oct 2015 11:28
LONDON (Alliance News) - Leeds Group PLC on Tuesday said that trading performance of both Hemmers-Itex and ChinohTex has been satisfactory and in line with board expectations.
Leeds Group?s trading operations are conducted by Hemmers-Itex Textil Import Export GmbH.
Hemmers is based in Nordhorn, Germany, and ChinohTex is Hemmers' Chinese subsidiary based in Shanghai.
"Demand remains strong, especially from retailers, and our range of children's fabrics are selling particularly well in this sector. Our online sales systems are now fully operational," Chairman Jan Holmstrom said at the company's annual meeting of shareholders on Tuesday.
In December 2014, Hemmers acquired a 50% joint venture interest in KMR, a retail chain of fabric and haberdashery stores. KMR has now concluded negotiations to open a new store in Berlin that is expected to open for business in the first quarter of 2016.
"Hemmers-Itex's continued growth in sales volumes has resulted in the need to increase the capacity of our Nordhorn facility," the chairman said.
He said this prompted the company to authorise an expansion plan designed to "deliver a significant increase in warehousing capacity, an enlarged and improved showroom and sales area, and space in which we shall install new equipment that will enable us to meet the double folding requirements of our customers entirely from our own resource without resorting, as at present, to more costly outsourcing."
"We anticipate the total cost of this project, including the cost of the double folding machines, to be in the order of EUR3.5 million, with a scheduled project completion date before our financial year end on 31 May 2016," the chairman added.
"In view of the investment in KMR and the current capital expenditure programme in Nordhorn, the board does not recommend the payment of a dividend. It remains the long-term intention of the board to seek further opportunities to maximise the value of the group to the benefit of all shareholders by identifying appropriate investments that strengthen the group," he added.
Shares in Leeds Group were untraded at 35.25 pence on Tuesday afternoon.
By Samuel Agini; [email protected]; @samuelagini
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