TIDMPTD
RNS Number : 9962Z
Pittards PLC
21 March 2017
21 March 2017
Pittards plc
("Pittards" or "the Group")
Full year results for the year ended 31 December 2016
Pittards plc, the specialist producer of technically advanced
leather and luxury leather goods for sale to retailers,
manufacturers and distributors today announces its results for the
year ended 31 December 2016.
Year ended 31 December 2016:
-- Revenue GBP27.0m (2015: GBP30.5m)
-- Underlying PBT GBP0.2m and LBT of GBP4.1m (2015 PBT: GBP0.7m) after an exceptional stock write-down of GBP4.3m
-- Net assets GBP21.3m (2015: GBP24.3m), net assets per share 153.38p (2015: 204.45p)
-- New management team in place from the final quarter of 2016
-- Restructured operationally to become two reporting divisions: "UK" and "Ethiopia"
Stephen Yapp, Chairman commented: "We are putting in place the
necessary pillars that will strengthen Pittards' position as a
leading performance-leather expert, supported by scalable
manufacturing operations and a highly capable management team.
"The restructuring and strengthening of the management team was
completed in the final quarter of 2016 and strides have already
been made to evolve and progress the strategic priorities and
milestones for the next three years. Further updates on this will
be given later this year.
"Whilst it is still early days, we are beginning to experience a
more positive demand environment for leather. Together with the
actions being identified and taken, the Board believe we will start
to see a benefit in the latter part of 2017 and that the prospects
for the future are promising."
For further information please contact:
Pittards plc www.pittardsleather.com
Stephen Yapp, Chairman
Reg Hankey, CEO +44 (0) 1935 474 321
Matt O'Rourke, CFO
WHIreland Limited www.whirelandplc.com
Mike Coe/Ed Allsopp +44 (0) 117 945 3470
This announcement includes inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
Chairman's statement
2016 was an active year for Pittards during which we have been
primarily focused on the management team and structure to develop
and implement a medium term strategic plan. As previously
communicated, the financial performance during the year was
overshadowed by challenging market conditions and political
disruption in Ethiopia in the latter part of 2016.
The restructuring and strengthening of the management team was
completed in the final quarter of the year and strides have already
been made towards identifying the market priorities for the next
three years. This will allow us to pursue growth opportunities both
in existing core and new markets that are considered to be most
aligned with our skills and expertise.
Year ended 31 December 2016:
-- Revenue GBP27.0m (2015: GBP30.5m)
-- Underlying PBT GBP0.2m and LBT of GBP4.1m (2015 PBT: GBP0.7m) after an exceptional stock write-down of GBP4.3m
-- Net assets GBP21.3m (2015: GBP24.3m), net assets per share 153.38p (2015: 204.45p)
-- New management team in place from the final quarter of 2016
-- Restructured operationally to become two reporting divisions: "UK" and "Ethiopia"
Market conditions
The global leather market continues to be challenging for
companies looking for growth against a backdrop of significant
global change and weak consumer demand. Demand in our core markets
of shoe, sport and dress gloves remains depressed and we now
believe that after four years of contraction, the dress glove
market has rebalanced at this lower level. Encouragingly though, we
are beginning to see some signs that growth may return in some of
our other markets during the latter part of 2017.
In line with an intention to broaden our market base, we are
reviewing additional potential markets. Initial findings have
identified both the interiors and general footwear markets as
having the characteristics our capabilities can best leverage.
Financial review
Overall the Group had a difficult year financially with
depressed leather volumes and a number of non-recurring items.
Revenue was down 11% to GBP27.0m as a consequence of reduced
demand and the impact on the Ethiopian business of the political
disruption. The political environment in Ethiopia has stabilised
and our manufacturing production capabilities there are now
returning to more normal levels.
Gross margin continued to improve at 24% pre-provision (2015:
22%) reflecting favourable currency improvements mainly US
dollar-related.
The Board has conducted a detailed review of the stock holding
and has decided to take a GBP4.3m provision reducing the year end
stock to GBP17.4m. This provision takes into account: the impact of
currency translation, slow moving stock and the potential strategic
shift in the business moving towards a higher proportion of hide
relative to skins business. The provision relates to low end dress
and sport glove leather, with a write down of GBP1.3m in the UK and
GBP3.0m in Ethiopia.
Underlying PBT for the year was GBP0.2m and after the
exceptional stock write-down, the LBT for the year was GBP4.1m
(2015 PBT: GBP0.7m)
Net debt increased by GBP3.6m to GBP10.1m. This reflects an
increase in working capital and capital investment of GBP1.4m. The
UK banking facilities were renewed in December 2016 with available
Group banking facilities of GBP13.0m.
The Group's structure has been simplified into two divisions -
UK and Ethiopia - and our focus during 2017 will be to develop and
implement a range of key financial measures which both reflect the
individual trading environments and deliver returns above the cost
of capital.
Board changes
As previously announced, I was appointed Chairman on 16 May 2016
and on 1 June 2016 Matthew O'Rourke was appointed CFO and Jill
Williams resigned from this role. She became a non-executive
director on 1 January 2017.
Team
Throughout the past year, the Group has been in a transitional
phase. To have executed the changes outlined internally, whilst
adopting a 'business as usual' approach externally, is testament to
the commitment and hard work of our 1600 employees to whom I would
like to express my thanks.
Outlook
The restructuring and strengthening of the management team was
completed in the final quarter of 2016 and strides have already
been made to evolve and progress the strategic priorities and
milestones for the next three years. Further updates on this will
be given later this year.
Whilst it is still early days, we are beginning to experience a
more positive demand environment for leather. Together with the
actions being identified and taken, the Board believe we will start
to see a benefit in the latter part of 2017 and that the prospects
for the future are promising.
Consolidated income statement
for the year ended 31 December 2016
2016 2015
Continuing operations Note GBP'000 GBP'000
--------------------------------------------- ---- -------- --------
Revenue 27,009 30,523
--------------------------------------------- ---- -------- --------
Cost of sales (20,554) (23,902)
--------------------------------------------- ---- -------- --------
Cost of sales -- exceptional stock provision 3 (4,307) -
--------------------------------------------- ---- -------- --------
Gross profit 2,148 6,621
--------------------------------------------- ---- -------- --------
Distribution costs (2,167) (1,919)
--------------------------------------------- ---- -------- --------
Administrative expenses (3,572) (3,275)
--------------------------------------------- ---- -------- --------
Administrative expenses -- exceptional
restructuring costs - (312)
--------------------------------------------- ---- -------- --------
(Loss)/Profit from operations before
finance costs (3,591) 1,115
--------------------------------------------- ---- -------- --------
Finance costs (499) (484)
--------------------------------------------- ---- -------- --------
Finance income 19 24
--------------------------------------------- ---- -------- --------
(Loss)/Profit before taxation (4,071) 655
--------------------------------------------- ---- -------- --------
Taxation 6 (75) (184)
--------------------------------------------- ---- -------- --------
(Loss)/Profit for the year after taxation (4,146) 471
--------------------------------------------- ---- -------- --------
(Loss)/Profit attributable to:
--------------------------------------------- ---- -------- --------
Owners of the parent (4,146) 474
--------------------------------------------- ---- -------- --------
Non controlling interest - (3)
--------------------------------------------- ---- -------- --------
(4,146) 471
--------------------------------------------- ---- -------- --------
(Loss)/Earnings per share attributable
to the owners of the parent
--------------------------------------------- ---- -------- --------
Basic 4 (29.89p) 3.98p
--------------------------------------------- ---- -------- --------
Diluted 4 (28.91p) 3.88p
--------------------------------------------- ---- -------- --------
Consolidated statement of comprehensive income
for the year ended 31 December 2016
2016 2015
GBP'000 GBP'000
----------------------------------------------- -------- --------
(Loss)/Profit for the year after taxation (4,146) 471
----------------------------------------------- -------- --------
Other comprehensive income
Items that will not be reclassified
to profit or loss
----------------------------------------------- -------- --------
Revaluation of land and buildings 135 182
----------------------------------------------- -------- --------
Revaluation of land and buildings --
unrealised exchange gain 279 13
----------------------------------------------- -------- --------
414 195
----------------------------------------------- -------- --------
Items that may be subsequently reclassified
to profit or loss
----------------------------------------------- -------- --------
Unrealised exchange gain on translation
of overseas subsidiaries 827 58
----------------------------------------------- -------- --------
827 58
----------------------------------------------- -------- --------
Other comprehensive income 1,241 253
----------------------------------------------- -------- --------
Total comprehensive (loss)/income for
the year (2,905) 724
----------------------------------------------- -------- --------
Total comprehensive (loss)/income attributable
to:
----------------------------------------------- -------- --------
Owners of the parent (2,905) 717
----------------------------------------------- -------- --------
Non controlling interest - 7
----------------------------------------------- -------- --------
Consolidated statement of changes in equity
for the year ended 31 December 2016
Share Total
based equity
payment attributable
reserve to
Shares GBP'000 owners
held of Non-
Share Share Capital Retained Translation by Revaluation the controlling Total
capital premium reserve earnings reserve ESOP reserve parent interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
At 1 January
2015 4,631 -- 6,475 8,607 (2,750) (495) 1,668 -- 18,136 172 18,308
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Comprehensive
income for the
year:
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Profit/(Loss)
for the year
after taxation -- -- -- 474 -- -- -- -- 474 (3) 471
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Other
comprehensive
income:
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Gain on the
revaluation
of buildings -- -- -- -- -- -- 172 -- 172 10 182
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Unrealised
exchange
gain on
translation
of foreign
subsidiaries -- -- -- -- 58 -- 13 -- 71 -- 71
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Total other
comprehensive
income -- -- -- -- 58 -- 185 -- 243 10 253
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Total
comprehensive
income for the
year -- -- -- 474 58 -- 185 -- 717 7 724
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Transactions
with owners:
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Proceeds from
shares issued 2,313 2,984 -- -- -- -- -- -- 5,297 -- 5,297
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Total
transactions
with owners 2,313 2,984 -- -- -- -- -- -- 5,297 -- 5,297
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
At 1 January
2016 6,944 2,984 6,475 9,081 (2,692) (495) 1,853 -- 24,150 179 24,329
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Comprehensive
income for the
year:
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Loss for the
year after
taxation -- -- -- (4,146) -- -- -- -- (4,146) -- (4,146)
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Other
comprehensive
income:
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Gain on the
revaluation
of buildings -- -- -- -- -- -- 135 -- 135 -- 135
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Unrealised
exchange
gain on
translation
of foreign
subsidiaries -- -- -- -- 827 -- 279 -- 1,106 -- 1,106
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Total other
comprehensive
income -- -- -- -- 827 -- 414 -- 1,241 -- 1,241
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Total
comprehensive
(expense)/income
for the year -- -- -- (4,146) 827 -- 414 -- (2,905) -- (2,905)
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Share based
payment
expense -- -- -- -- -- -- -- 29 29 -- 29
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Purchase of non
controlling
interest -- -- -- -- -- -- -- -- -- (179) (179)
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
At 31 December
2016 6,944 2,984 6,475 4,935 (1,865) (495) 2,267 29 21,274 -- 21,274
----------------- ------- ------- -------- --------- ------------ ------- ----------- ------- ------------ ----------- -------
Balance sheet
as at 31 December 2016
2016 2015
GBP'000 GBP'000
------------------------------- -------- --------
ASSETS
------------------------------- -------- --------
Non-current assets
------------------------------- -------- --------
Property, plant and equipment 12,106 10,679
------------------------------- -------- --------
Intangible assets 243 273
------------------------------- -------- --------
Investments in subsidiary -- --
undertakings
------------------------------- -------- --------
Deferred income tax asset 1,800 1,676
------------------------------- -------- --------
Total non-current assets 14,149 12,628
------------------------------- -------- --------
Current assets
------------------------------- -------- --------
Inventories 17,353 18,872
------------------------------- -------- --------
Trade and other receivables 4,388 4,017
------------------------------- -------- --------
Cash and cash equivalents 206 485
------------------------------- -------- --------
Current income tax recoverable 38 26
------------------------------- -------- --------
Total current assets 21,985 23,400
------------------------------- -------- --------
Total assets 36,134 36,028
------------------------------- -------- --------
LIABILITIES
------------------------------- -------- --------
Current liabilities
------------------------------- -------- --------
Trade and other payables (4,362) (4,664)
------------------------------- -------- --------
Interest bearing loans,
borrowings and overdrafts (6,781) (3,806)
------------------------------- -------- --------
Total current liabilities (11,143) (8,470)
------------------------------- -------- --------
Non-current liabilities
------------------------------- -------- --------
Deferred income tax liability (183) (92)
------------------------------- -------- --------
Interest bearing loans,
borrowings and overdrafts (3,534) (3,137)
------------------------------- -------- --------
Total non-current liabilities (3,717) (3,229)
------------------------------- -------- --------
Total liabilities (14,860) (11,699)
------------------------------- -------- --------
Net assets 21,274 24,329
------------------------------- -------- --------
EQUITY
------------------------------- -------- --------
Share capital 6,944 6,944
------------------------------- -------- --------
Share premium 2,984 2,984
------------------------------- -------- --------
Capital reserve 6,475 6,475
------------------------------- -------- --------
Shares held by ESOP (495) (495)
------------------------------- -------- --------
Share based payment reserve 29 --
------------------------------- -------- --------
Translation reserve (1,865) (2,692)
------------------------------- -------- --------
Revaluation reserve 2,267 1,853
------------------------------- -------- --------
Retained earnings 4,935 9,081
------------------------------- -------- --------
Total equity attributable
to owners of the parent 21,274 24,150
------------------------------- -------- --------
Non-controlling interest -- 179
------------------------------- -------- --------
TOTAL EQUITY 21,274 24,329
------------------------------- -------- --------
Statement of cash flows
for the year ended 31 December 2016
2016 2015
Note GBP'000 GBP'000
------------------------------ ---- -------- --------
Cash flows from operating
activities
------------------------------ ---- -------- --------
Cash (used in)/generated
from operations 5 (1,336) 962
------------------------------ ---- -------- --------
Tax paid (81) (183)
------------------------------ ---- -------- --------
Interest paid (480) (447)
------------------------------ ---- -------- --------
Net cash (used in)/generated
from operating activities (1,897) 332
------------------------------ ---- -------- --------
Cash flows from investing
activities
------------------------------ ---- -------- --------
Purchases of property,
plant and equipment (1,181) (4,350)
------------------------------ ---- -------- --------
Purchases of intangible
assets (5) (108)
------------------------------ ---- -------- --------
Purchase of investments (192) --
------------------------------ ---- -------- --------
Net cash used in investing
activities (1,378) (4,458)
------------------------------ ---- -------- --------
Cash flows from financing
activities
------------------------------ ---- -------- --------
Proceeds from borrowings 2,364 3,651
------------------------------ ---- -------- --------
Repayment of bank loans (1,658) (1,733)
------------------------------ ---- -------- --------
New finance lease obligations 374 35
------------------------------ ---- -------- --------
Repayment of obligations
under finance leases and
hire purchase obligations (88) (42)
------------------------------ ---- -------- --------
Proceeds from share issue
(net of costs) -- 5,297
------------------------------ ---- -------- --------
Net cash generated from
financing activities 992 7,208
------------------------------ ---- -------- --------
(Decrease)/increase in
cash and cash equivalents (2,283) 3,082
------------------------------ ---- -------- --------
Cash and cash equivalents
at beginning of the year (1,474) (4,551)
------------------------------ ---- -------- --------
Exchange gains/(losses)
on cash and cash equivalents 19 (5)
------------------------------ ---- -------- --------
Cash and cash equivalents
at end of the year (3,738) (1,474)
------------------------------ ---- -------- --------
Notes
1. The figures for the years ended 31 December 2016 and 2015 do
not constitute statutory accounts within the meaning of s434 of the
Companies Act 2006. The figures for the year ended 31 December 2016
have been extracted from the statutory accounts for that year which
have yet to be delivered to the Registrar of Companies and on which
the auditor has issued an unqualified audit report. A full Report
and Accounts for the year ended 31 December 2015, on which the
auditor has issued an unqualified audit report has been delivered
to the Registrar of Companies. No statement has been made by the
auditor under Section 498(2) or (3) of the Companies Act 2006 in
respect of either of these sets of accounts.
The preliminary announcement was approved by the board of
directors and authorised for issue on 20 March 2017.
2. Basis of preparation
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards adopted
by the European Union ("IFRS") and IFRS IC interpretations in issue
at the balance sheet date.
The consolidated financial statements have been prepared in
accordance with the Companies Act 2006, applicable to companies
reporting under IFRS.
The information in this preliminary statement has been extracted
from the audited financial statements for the year ended 31
December 2016 and as such, does not contain all the information
required to be disclosed in the financial statements prepared in
accordance with the International Financial Reporting Standards
('IFRS').
3. Exceptional items
2016 2015
GBP'000 GBP'000
--------------------------------------- -------- --------
Cost of sales -- exceptional stock 4,307 --
provision
--------------------------------------- -------- --------
Administrative expenses -- exceptional
restructuring costs -- 312
--------------------------------------- -------- --------
4,307 312
--------------------------------------- -------- --------
The Board have conducted a detailed review of the stock holding
and have decided to take a GBP4.307m provision reducing the year
end stock to GBP17.353m. This takes into account: the impact of
currency translation, slow moving stock and the potential strategic
shift in the business moving towards a higher proportion of hide
business. The provision relates to low end dress and sport glove
leather, with a write down of GBP1.271m in the UK and GBP3.036m in
Ethiopia.
4. (Loss)/Earnings per ordinary share
2016 2015
GBP'000 GBP'000
------------------------------------------ -------- --------
Analysis of the (loss)/profit in the
year:
------------------------------------------ -------- --------
(Loss)/Profit for the year attributable
to owners of the parent (4,146) 474
------------------------------------------ -------- --------
Weighted average number of ordinary
shares in issue
(excluding the shares owned by the
Pittards Employee Share Ownership Trust) '000s '000s
------------------------------------------ -------- --------
Basic 13,870 11,900
------------------------------------------ -------- --------
Diluted 14,341 12,201
------------------------------------------ -------- --------
Basic (loss)/earnings per ordinary
50p share (29.89p) 3.98p
------------------------------------------ -------- --------
Diluted (loss)/earnings per ordinary
50p share (28.91p) 3.88p
------------------------------------------ -------- --------
5. Cash (used in)/generated from operations
Group
----------------------------------- ------------------
2016 2015
GBP'000 GBP'000
----------------------------------- -------- --------
(Loss)/Profit before taxation (4,071) 655
----------------------------------- -------- --------
Adjustments for:
----------------------------------- -------- --------
Depreciation of property,
plant and equipment 605 456
----------------------------------- -------- --------
Amortisation 35 22
----------------------------------- -------- --------
Bank and other interest charges 480 447
----------------------------------- -------- --------
Share based payment expense 29 -
----------------------------------- -------- --------
Other non-cash items in Income
Statement (61) (47)
----------------------------------- -------- --------
Operating cash flows before
movement in working capital (2,983) 1,533
----------------------------------- -------- --------
Movements in working capital
(excluding exchange differences
on consolidation):
----------------------------------- -------- --------
Decrease/(increase) in inventories 2,912 (1,003)
----------------------------------- -------- --------
(Increase)/decrease in receivables (194) 911
----------------------------------- -------- --------
(Decrease)/increase in payables (1,071) (479)
----------------------------------- -------- --------
Cash (used in)/generated
from operations (1,336) 962
----------------------------------- -------- --------
6. Taxation
The Group has recognised a deferred tax asset of GBP1.800m
(2015: GBP1.676m) in respect of losses out of a total potential
deferred tax asset of GBP1.800m (2015: GBP1.676m).
The tax charge reduced to GBP0.075m (2015: GBP0.184m), mainly as
a result of the creation of tax losses following the performance
during the year, offset by a historic tax charge in Ethiopia.
7. Copies of the 2016 Annual Report and Accounts will be posted
to shareholders in April and will be available on the Company's
website at www.pittards.com. Further copies may be obtained by
contacting the Company Secretary at Pittards plc, Sherborne Road,
Yeovil, Somerset, BA21 5BA. The annual general meeting is to be
held at the registered office on 16 May 2017 at 12pm.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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