2nd Jun 2008 07:00
Issued on behalf of Leeds Group plc Embargoed: 7.00am
Date: 2 June 2008
Leeds Group plc
Interim Results for the six months ended 31st March 2008
STATEMENT BY THE GROUP CHAIRMAN, EWEN WIGLEY
Group Results
I am pleased to report that the group's profit before tax for the six months ended 31 March 2008 was £361,000, which compares with £393,000 in the corresponding period of last year.
This is the first set of reported results prepared in accordance with International Financial Reporting Standards ("IFRS"). Comparative results for the six months ended 31 March 2007 and the year ended 30 September 2007 have been restated in accordance with IFRS and restated profit before tax for these periods is higher by £43,000 and £70,000 respectively than the figures previously announced under UK GAAP. The transition to IFRS represents an accounting change only and the underlying performance of the group and its cash flows are unaffected. The Restatement of Financial Information under IFRS released by the group on 30 May 2008 can be seen on the group's website and contains full reconciliations between UK GAAP and IFRS balance sheets at 1 October 2006, 31 March 2007 and 30 September 2007 and between UK GAAP and IFRS income statements for the six months ended 31 March 2007 and the year ended 30 September 2007, together with the accounting policies that have been adopted.
In the 2007 Report & Accounts, I referred to the opportunity available to the Hemmers-Itex business as a result of the demise of a competitor. Hemmers-Itex has undertaken selective recruitment of experienced staff at its headquarters and agents, both inside and outside Germany, in order to achieve growth in sales. The warehousing and office facilities in Nordhorn, Germany have been expanded to accommodate all personnel on site and improve stock handling. I am pleased to report that sales grew by 15.8% in Euro terms to EUR 14,239,000 (2007: EUR 12,291,000). The increased overhead and interest charges at Hemmers-Itex held back profitability, but the Board believes that the investment is for future growth and will bring rewards in due course.
With the sole operating business of the company based in Germany, the strength of the Euro against Sterling has had a positive impact on the group's results. Over the six month period covered by this report, the Euro appreciated against Sterling by some 12.4%, increasing on re-translation the group's opening net assets by £927,000, and increasing Hemmers-Itex sales and profits by £1,407,000 and £25,000 respectively.
The earnings per share of 1.0 pence per share (2007: 0.7 pence) reflects a lower effective tax rate arising because a higher proportion of profits were made in parts of the Group where no tax was payable, as well as a reduction in the weighted average number of shares in issue.
The company has continued with its share buyback programme, purchasing 380,000 shares in the first six months of the year. Following the renewal of the authority to buy back shares at the Annual General Meeting the Board intends to continue to make purchases whenever the opportunity arises. In line with the Board's previous decisions, it does not propose an interim dividend.
On 22 May 2008 the Company announced it had acquired approximately 29% of Dawson International plc. During the period, the company also made an investment in one million shares of European Equity Tranche Income Ltd. These investments are consistent with the intention of the Board to maximise the long-term value of the group, and we continue to look for other acquisitions or investments that will strengthen the group and benefit shareholders.
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Enquiries: |
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Leeds Group plc |
Citigate Dewe Rogerson |
Seymour Pierce Limited |
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Malcolm Wilson, Company Secretary |
Fiona Tooley |
Sarah Jacobs |
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Tel: 0113 391 9000 or 07801 224618 |
Tel: 0121 455 8370 |
Tel: 020 7107 8000 |
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Ewen Wigley, Chairman |
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Tel: 07815 134466 |
Leeds Group plc
Interim Results
Consolidated Income Statement
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6 months to 31st March 2008 £000 |
6 months to 31st March 2007 £000 |
12 months to 30th September 2007 £000 |
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|
Revenue |
11,337 |
8,350 |
17,523 |
|
Cost of sales |
(8,644) |
(6,308) |
(13,418) |
|
Gross profit |
2,693 |
2,042 |
4,105 |
|
Distribution expenses |
(775) |
(546) |
(1,096) |
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Administrative expenses |
(1,567) |
(1,176) |
(2,296) |
|
Profit from operations |
351 |
320 |
713 |
|
Finance expense |
(117) |
(44) |
(121) |
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Finance income |
127 |
117 |
238 |
|
Profit before tax |
361 |
393 |
830 |
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Tax expense |
(46) |
(147) |
(245) |
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Profit for the period, attributable to equity holders of the company |
315 |
246 |
585 |
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Earnings per share for profit attributable to the equity holders of the company |
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Basic and diluted (pence) |
1.0p |
0.7p |
1.7p |
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Statement of Recognised Income and Expense |
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Translation differences on foreign operations |
927 |
13 |
167 |
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Net income recognised directly in equity |
927 |
13 |
167 |
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Profit for the period |
315 |
246 |
585 |
|
Total recognised income and expense for the period |
1,242 |
259 |
752 |
Leeds Group plc
Interim Results
Consolidated Balance Sheet
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As at 31st March 2008 £000 |
As at 31st March 2007 £000 |
As at 30th September 2007 £000 |
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Assets |
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Non-current assets |
|||
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Property, plant and equipment |
1,755 |
259 |
308 |
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Intangible assets |
889 |
759 |
779 |
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Available for sale investments |
276 |
- |
- |
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Total non-current assets |
2,920 |
1,018 |
1,087 |
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Current assets |
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Inventories |
5,386 |
3,620 |
5,172 |
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Trade and other receivables |
5,612 |
3,562 |
4,344 |
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Cash |
3,800 |
4,701 |
4,764 |
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Total current assets |
14,798 |
11,883 |
14,280 |
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Total assets |
17,718 |
12,901 |
15,367 |
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Liabilities |
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Non-current liabilities |
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Loans and borrowings |
(1,990) |
- |
(1,569) |
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Total non-current liabilities |
(1,990) |
- |
(1,569) |
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Current liabilities |
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Trade and other payables |
(1,111) |
(851) |
(1,195) |
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Loans and borrowings |
(2,339) |
(794) |
(1,535) |
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Corporation tax liability |
- |
(91) |
(25) |
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Derivative financial liabilities |
(115) |
(4) |
(26) |
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Provisions |
(103) |
(139) |
(125) |
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Total current liabilities |
(3,668) |
(1,879) |
(2,906) |
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Total liabilities |
(5,658) |
(1,879) |
(4,475) |
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TOTAL NET ASSETS |
12,060 |
11,022 |
10,892 |
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Capital and reserves attributable to equity holders of the company |
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Share capital |
4,188 |
4,392 |
4,188 |
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Capital redemption reserve |
204 |
- |
204 |
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Treasury share reserve |
(840) |
(462) |
(766) |
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Foreign exchange reserve |
1,094 |
13 |
167 |
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Retained earnings |
7,414 |
7,079 |
7,099 |
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TOTAL EQUITY |
12,060 |
11,022 |
10,892 |
Leeds Group plc
Interim Results
Consolidated Cash Flow Statement
|
6 months to 31st March 2008 £000 |
6 months to 31st March 2007 £000 |
12 months to 30th September 2007 £000 |
|
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Cash flows from operating activities |
|||
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Profit for the period |
315 |
246 |
585 |
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Adjustments for : |
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Depreciation |
79 |
41 |
94 |
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Foreign exchange loss |
85 |
4 |
26 |
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Translation differences on cash and cash equivalents |
98 |
- |
(6) |
|
Finance expense |
117 |
44 |
121 |
|
Finance income |
(127) |
(117) |
(238) |
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Gain on sale of property, plant and equipment |
- |
- |
(7) |
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Income tax expense |
46 |
147 |
245 |
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Cash flows from operating activities before changes in working capital and provisions |
613 |
365 |
820 |
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Decrease/(increase) in inventories |
519 |
942 |
(490) |
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(Increase)/decrease in trade and other receivables |
(597) |
436 |
(241) |
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(Decrease)/increase in trade and other payables |
(317) |
(158) |
114 |
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Decrease in provisions |
(22) |
(21) |
(35) |
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Cash generated from operating activities |
196 |
1,564 |
168 |
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Income taxes paid |
(133) |
(343) |
(482) |
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Net cash flows from operating activities |
63 |
1,221 |
(314) |
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Investing activities |
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Purchase of property, plant and equipment |
(1,482) |
(54) |
(155) |
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Sale of property, plant and equipment |
- |
- |
12 |
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Purchase of available for sale investments |
(276) |
- |
- |
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Dividends from available for sale investments |
12 |
- |
- |
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Interest received |
115 |
162 |
238 |
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Net cash used in investing activities |
(1,631) |
108 |
95 |
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Financing activities |
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Purchase of treasury shares |
(74) |
(112) |
(735) |
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Proceeds from bank borrowings |
716 |
- |
3,034 |
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Repayment of bank borrowings |
- |
(1,016) |
(1,743) |
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Interest paid |
(117) |
(89) |
(121) |
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Net cash used in financing activities |
525 |
(1,217) |
435 |
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Net (decrease)/increase in cash and cash equivalents |
(1,043) |
112 |
216 |
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Cash and cash equivalents at beginning of the period |
4,694 |
4,478 |
4,478 |
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Cash and cash equivalents at end of the period |
3,651 |
4,590 |
4,694 |
Leeds Group plc
Interim Results
Notes to the accounts
The financial information in this report does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The interim accounts for the six months ended 31 March 2008 and 31 March 2007 are unaudited. The comparative figures for the financial year ended 30 September 2007 are not the group's statutory accounts, but have been extracted from those accounts, which have been filed with the Registrar of Companies and on which the group's auditor gave an unqualified report that did not include reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain statements under section 237 (2) or (3) of the Companies Act 1985.
2. Comparative results for the six months ended 31 March 2007 and the year ended 30 September 2007 have been restated in accordance with International Financing Reporting Standards (IFRS). Full reconciliations between UK GAAP and IFRS balance sheets at 1 October 2006, 31 March 2007 and 30 September 2007 and between UK GAAP and IFRS income statements for the six months ended 31 March 2007 and for the year ended 30 September 2007, together with the accounting policies adopted, are set out in the Restatement of Financial Information under IFRS released by the group on 30 May 2008.
3. Earnings per share have been calculated on an average of 31,377,138 (2007: 34,669,647) ordinary shares of 12 pence each in issue during the period.
4. The table below sets out a reconciliation of movement in equity
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6 months to 31st March 2008 £000 |
6months to 31st March 2007 £000 |
12 months to 30th September 2007 £000 |
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At beginning of period |
10,892 |
10,875 |
10,875 |
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Profit for the period |
315 |
246 |
585 |
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Purchase of own shares for treasury |
(74) |
(112) |
(735) |
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Foreign currency translation differences |
927 |
13 |
167 |
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At end of period |
12,060 |
11,022 |
10,892 |
Related Shares:
Leeds Group