20th Nov 2009 12:11
Leeds Group Plc
("Leeds Group" or the "Company")
Trading Statement
Leeds Group reports that in respect of the six month period to 30 September 2009 sales levels remained stable and Group revenue continued at a rate that was in line with the performance in the first six months of the financial year. However margins at Hemmers-Itex Textil Import Export GmbH ("Hemmers"), the Company's principal trading subsidiary, remained under pressure.
Hemmers have taken a number of measures to reduce costs and improve margins, which will have an impact in the current financial year, and continues to seek further improvements. During the second half of the financial year, Hemmers has also worked hard to reduce its working capital below planned levels, leading to a better than expected net debt position in that business.
Leeds Group expects to report a small loss before tax in its results for the full financial year which, it is anticipated, will be published in December.
Ewen Wigley, Chairman, commented: "Whilst it is disappointing to publish a small pre-tax loss for the financial year 2008/9, the Directors are confident that the measures taken and underway will restore the Group to profitability in the current financial year."
Related Party Transaction
Hemmers, has supplied material to Stoff Ideen KMR GmbH ("KMR"), a company who Thorsten Richter (until recently the Finance Director of one of the subsidiaries of the group) had an interest in at the time of the transactions.
KMR is a chain of 15 retail shops selling material and associated items based in cities in the middle and south of Germany. The total sales to KMR amount, in aggregate, to €522,000 and constituted approximately 74 small transactions since 30 September 2008. KMR pay for the goods in cash pursuant to Hemmers normal terms of trade.
Hemmers has also supplied material to Der Stoff Stoffhandels GmbH ("Der Stoff"), a company who Jörg Hemmers (the Managing Director of one of the subsidiaries of the group) has an interest in.
Der Stoff is a chain of 5 retail shops selling material and associated items based in cities across Germany. The total sales to Der Stoff amount, in aggregate, to €382,000 and constituted approximately 70 small transactions over the course of approximately 12 months. Der Stoff pay for the goods in cash pursuant to Hemmers normal terms of trade.
In accordance with the AIM Rules, the Directors of Leeds, having consulted with the Company's Nominated Adviser, Seymour Pierce Limited, consider that the terms of supply to KMR and Der Stoff, being Hemmers standard terms of supply, are fair and reasonable insofar as the Company's shareholders are concerned.
Enquiries:
Ewen Wigley Tel: 0113 391 9000
Leeds Group plc
Sarah Jacobs/Catherine Leftley Tel: 020 7107 8000
Seymour Pierce Limited
Related Shares:
Leeds Group