TIDMPTD
RNS Number : 2438T
Pittards PLC
24 March 2021
24 March 2021
Pittards plc
(" Pittards " or " the Group ")
Full year results for the year ended 31 December 2020
Pittards plc, the specialist producer of technically advanced
leather and luxury leather goods for retailers, manufacturers and
distributors today announces its results for the year ended 31
December 2020.
Key performance indicators 2020
Second half Full year
----------------------- ---------------
2020 2019 Change 2020 2019
GBPm GBPm GBPm GBPm GBPm
--------------------------------- ------ ------ ------- ------- ------
Revenue 8.6 10.2 (1.6) 15.2 22.3
Gross profit 2.1 3.3 (1.2) 3.2 6.9
Gross margin 24% 32% -8% 21% 31%
------------------------------------- ------ ------ ------- ------- ------
Profit/(Loss) before tax (0.0) 0.4 0.4 (2.3) 0.6
EBITDA 0.3 0.9 (0.6) (1.1) 2.0
Net assets 13.9 17.5 (3.6) 13.9 17.5
Inventory 15.0 17.3 (2.3) 15.0 17.3
Net debt 10.1 9.6 (0.5) 10.1 9.6
------------------------------------- ------ ------ ------- ------- ------
Net debt adjusted for treasury
shares held 9.7 9.6 (0.1) 9.7 9.6
Gearing 73.0% 54.7% -18% 73.0% 55.0%
Staff numbers 1,096 1,224
Basic (loss)/earnings per share
(in pence) (17.7) 2.9
Net assets per share (in
pence) 107.0 126.3
Stephen Yapp, Chairman, commented:
" We have entered 2021 stronger, with a more diverse and
flexible business, ready to take full advantage of opportunities in
our markets. It remains too early to judge how strong the recovery
will be, but on balance, we see more reason to be positive that we
can make further progress to build on the momentum of the second
half of last year, starting the year with stronger demand from
customers"
For further information, please contact:
Pittards PLC - www.pittards.com
Stephen Yapp, Chairman +44 (0) 1935 474 321
Reg Hankey, CEO
Richard Briere, CFO
WH Ireland Limited - www.whirelandcb.com
Mike Coe, Chris Savidge - +44 (0) 117 945 3472
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
for the year ended 31 December 2020
A dominant feature of 2020 has been the COVID-19 pandemic,
testing businesses both in terms of their underlying strength at
the outset and their adaptability in responding to challenges as
the year progressed.
I can report that Pittards has acquitted itself robustly against
both these parameters, endorsing both the soundness of the
strategies that we already had in place for developing our Group as
the year began, and the honing of the business that we implemented
as the year progressed.
We validated our strategic objectives by developing our
relationships in the interiors market with regular orders from
automotive and further established ourselves as a shoe manufacturer
in Ethiopia, despite COVID-19 disruptions.
We mitigated some of our first half operating cash losses
through inventory reduction, by optimising operations. This is
testament to our heightened cost focus, whilst delivering
transformational improvements due to the continued dedication of
all Pittards employees, to whom I would like to express my
gratitude in these challenging times.
The resilience of the Group was evidenced by a return to
positive EBITDA during the second half of 2020 and our cash flow
improved significantly during that period. Our re-shaped business
is more agile and set for growth and the creation of longer-term
value.
There were no changes to the Board during the year. The Board is
confident in the business strategy and committed to its future
success, with each Board member increasing their investment in
Pittards by buying shares during the year. The Board's collective
holding rose to 6.4% at the end of 2020 (2019: 3.2%).
In November 2020 we undertook a share buyback purchasing 0.9m
shares into treasury.
Outlook
Aligned with our strategic priorities, we are delivering a
broader range of products to more markets and creating a more
balanced portfolio. We continue to invest in new technology, and we
have planned increased capital investment compared to the previous
year.
Dividend payments are considered an important future step and
will be paid when covered by free cash flows.
We have entered 2021 stronger, with a more diverse and flexible
business, ready to take full advantage of opportunities in our
markets. It remains too early to judge how strong the recovery will
be, but on balance, we see more reason to be positive that we can
make further progress to build on the momentum of the second half
of last year, starting the year with stronger demand from
customers.
Stephen Yapp
Chairman
23 March 2021
Extract Chief Executive Officer's report
Highlights
-- Order book opened 2021 stronger than the start of the previous 2 years
-- Underlying margins improved on 2019
-- Second half of 2020 break even and positive EBITDA
-- Inventory reduced by GBP2.3m in 2020
-- Repeat orders from both interiors and big shoe markets
-- Reduced cost base by GBP2m, changed operating model
-- Re-engineered production and extended our manufacturing capabilities in Ethiopia.
COVID-19 response
During the first quarter of 2020, alongside many other
businesses, we were challenged with the sudden impact of COVID-19.
As a global pandemic unfolded, this unusual situation affected our
people, our customers and supply chains.
We implemented a new business plan that enabled a responsive
approach to the challenges we faced and reviewed this on a weekly
basis. The key pillars of this plan were focused on:-
-- Safety of people - Implemented best practice in line with government advice as it evolved
-- Customer support - Continued to supply and kept close dialogue
-- Cash management - strict daily control
-- Cost control - realignment of all costs
Performance review
Continued weak global demand for leather and related goods was a
feature in the first half, with full year revenue at GBP 15.2m
(2019: GBP22.3). The impact of the first half was challenging
operationally, given the sudden change in demand related to
COVID-19.
During this challenging time our first priority was the safety
of our employees. We quickly implemented changes in working
practice in line with up to date government guidance throughout the
year. We are fortunate to have quite large factories which enables
us to implement socially distanced working practices.
Sales demand has become more fragmented but broader in markets
we reach. The changing shape of the business is aligned with the
strategic priorities to achieve a more balanced customer portfolio,
specifically the inroads made in Ethiopia in shoe production and
sales, along with UK interiors and key shoe accounts. These remain
priority development markets for the Group. Sales to these markets
grew to 22% of sales, up from 18% of sales in 2019 on a like for
like basis.
Cost management was a key focus for the year, in which extra
disciplines were introduced and there was a targeted headcount
reduction which further reduced the cost base. This has left us
leaner, but in a scalable position with the appropriate expertise
to meet specific customer needs. We have expanded our design and
production management functions, despite overall headcount
reduction. Our key objective was to establish a much more resilient
business at lower levels of activity and this was achieved.
Our reported gross margins include labour and fixed production
costs, however our underlying margins comprised of sales less
underlying variable material cost. Our underlying margins have
continued to improve during 2020. Our reported gross margin was 21%
(2019: 31%) and EBITDA fell to negative GBP1.1m (2019: positive
GBP2.0m) and PBT to a loss of GBP2.3m (2019: GBP0.6m profit),
although we returned to a profitable model during the second half
of 2020, resulting in positive EBITDA for the second half as a
whole.
Inventories reduced to GBP15.0m (2019: GBP17.3m), as our change
in mix of business and operational improvements facilitated a more
consistent and predictable pattern for managing down inventory. Our
counter measures for operational costs continued to gather pace
with headcount reducing to 1,096 (2019: 1,224). Raw material prices
have broadly stabilised, and we have recalibrated our procurement
accordingly.
Net debt at 31 December was GBP10.1m (2019: GBP9.7m). The shape
of the business necessitated increased debtor days, whilst at the
same time supporting our customers who took longer to pay. Despite
this, we have actively sought to improve payment to suppliers and
therefore we actually paid them 1 day faster on average than
2019.
Currency moved slightly against us for 2020 although average
exchange rates were broadly unchanged on 2019. The Group aims to
hedge between 40% to 60% of requirements, with an average rate of
$1.34 to June 2022. The average rate in 2020 for the Group was
$1.31, broadly unchanged on 2019. As a guide 10% change in US$
against GBP could impact profitability by GBP0.3m either positively
or adversly. This risk is less pronounced than previous years,
illustrating the diminished impact currency had on operating
profits compared to recent years.
Over the past three years we have invested GBP1.2m in machinery
to improve our efficiency and expand our capability, particularly
in Ethiopia for shoe manufacturing, although we are not yet fully
utilising this capacity. We are planning further capital investment
of cGBP0.9m over the next twelve months, as we look to improve
margins and operating efficiency, whilst anticipating growth in new
markets.
As a result of COVID-19, our retail venues were forced to close
and we decided not to renew our lease at Clarks Village, Somerset,
and to focus more on digital channels which achieved increased
sales this year.
Market view
Numerous global factors continued to impact the demand for
leather, principally COVID-19 lockdowns, China/US tariffs and
general economic weakness. Brexit has had little impact on the
Group, by and large, and we don't anticipate this changing in the
near term.
The trend of global demand over the past few years has been
downward for both finished hides and skins. However, given the
increase in consumer appetite for outdoor pursuits , including golf
and endurance, it is likely we will see recovery in demand in our
market segments when social restrictions ease.
Some of our market segments have been harder hit by the
pandemic, most notably the aviation and automotive industry, where
global sales are down dramatically on 2019, although we continued
to sell to them. Notwithstanding the challenges faced by these
industries, we have been focused on innovation to deliver better
technical performance and create sustainable products across a
broader range of markets, including big shoe, interiors, military
and equestrian.
Operations
During the year we responded to the lower levels of volume by
challenging how we work. The supply chain has been supportive in
realigning costs which has led to a lowering of the Group's
operating costs, whilst providing a better fit to support
operations. A key change to production was the recalibration of
supply of performance leathers, with processing split between
Ethiopia and the UK, to make full use of the technical strengths of
both divisions.
We remain committed to the growth opportunities of the interiors
markets and are actively in dialogue with automotive and aviation
prospective customers. We have also launched a new fire retardant
technology for the mass transit market. Our new Explorer Firebloc
(TM) leather incorporates this technology and is aimed at the rail
sector .
In Ethiopia, we have demonstrated our broader manufacturing
capability in finished product and have increasing sales in
footwear, alongside the production of shoe leather for Vivobarefoot
and Soul of Africa, marking an important milestone. Further
developing our finished product manufacturing in Ethiopia continues
to be an important strategic goal for us.
Investing in the next generation of our team is an important
part of our business. With this in mind, we have been approved for
the UK Government's Kickstart scheme for 16-24 year olds. So far,
we have recruited 13 kick start team members and we plan more.
Technical
Jon Loxston has taken on the role of Chief Technical Officer
(CTO) to lead our solution driven approach to current and future
customer needs.
Pittards HQ in Somerset is the intellectual hub of the Group.
Research and development is carried out to create innovative
technologies, processes and performance products. By way of
example, in 2020 this led to the release of two new products:
Tri Protex(R) ; comprising 3 separate anti-microbial
technologies bound together to form one synergistic umbrella
technology. Pittards technologies Microspike(TM) and
Microdefence(R) together with Micro-Fresh(TM) , create a protective
environment throughout the leather structure destroying microbials.
Pittards Tri Protex(R) conforms to AATCC100, achieving 99.9%
elimination of bacteria.
Pittards Explorer Firebloc(TM) leather has been designed
specifically for the management of heat and fire resistance where
the highest performance upholstery leather is required on rail
transport. Using advanced chemistry and innovative manufacturing
techniques. Pittards has imparted high performance heat management,
smoke, toxic emission control/suppression and fire resistance to
upholstery leather which conforms to EN45545-2 2018, the European
railway standard for fire safety.
We continue to invest in capital equipment which is targeted at
improving production efficiency or reduces energy and water use. In
2020, we initiated the purchase of: a new vacuum drier, three dye
drum vessels, a whole hide splitting machine and two shaving
machines. Alongside this, our technical team routinely review our
factory processes to improve overall efficiency in line with our
sustainable approach to operations in general.
The world is being adversely affected by increased greenhouse
gas emissions, deforestation and increased pollution and it
recognised that the world's population must address these issues
for the good of all. We understand that implementing and adhering
to guidelines and regulations will contribute towards improving the
global situation and we recognise the importance of this. Our
customers expect compliance to international and their own
standards concerning the environment, health and safety, quality
and leather performance.
Pittards is ISO 14001:2015, major brand audited and REACH
compliant. We are also ISO 9001:2015 compliant and Leather Working
Group (LWG) Bronze Medal rated in the UK. We have long experience
with customer Restricted Substance Lists (RSL) and Material
Restricted Substance Lists (MRSL) and working within the ZDHC
framework. We work with chemical partners that take a strategic
approach to environmental impact.
Outlook for 2021
The global pandemic has had a big impact upon our business. Our
resilience has enabled us to come through one of the most serious
set of circumstances we are likely to face, and we have emerged a
stronger business today than we were in 2019.
Looking forward to 2021, we have started the year with a better
order book. Whilst some of this may have been from the need to
refill the supply chains there are also signs of a general recovery
in demand. In addition to our traditional markets, we are also well
placed to respond to our new strategic market sectors of interiors
(automotive, aviation and rail), larger shoe brands and shoe
production in Ethiopia.
With a more efficient cost base we will be able to respond more
positively to recovering demand in the global marketplace, and new
capital projects being delivered will allow us to grow more
capacity in a more efficient way.
Our commitment to our sustainable and responsible supply chains
is well established and we will continue to build upon our
continuous improvement culture.
The successful development of Explorer Firebloc(TM) for the mass
transit market and Tri Protex(R) antimicrobial technology,
demonstrates our market led innovation, with more developments to
come.
Our employees have come through many challenges during 2020. By
working together and evolving our working practices we will
continue to develop our flexible approach allowing agile responses
to our customer's needs.
Although there are still some unpredictable macro-economic
factors, and some inflationary cost pressures our confidence is
growing as we build a more balanced business with a broader range
of customers.
Cash management will remain a key focus and we believe
opportunities currently still outweigh risks to build on our 2020
second half performance.
Reg Hankey
Chief Executive Officer
23 March 2021
Extract of Chief Financial Officer's report
Financial review
Reduced revenue at GBP15.2m (2019: GBP22.3m), arising from the
periods of substantial disruption earlier in the year, inevitably
led to Group gross profit falling to GBP3.2m (2019: GBP6.9m). This
obscured the better mix of business and lower raw material cost,
which bodes well for underlying margins. We expect to resume the
improving trend of gross margins from 2019, underpinned by the
low-cost facility in Ethiopia, improved operational efficiency and
broader product range.
Cost savings were a key feature of 2020, with annual cost
savings heading into 2021 compared to 2019 of GBP2m. 2021 will
benefit from our newly aligned cost base, whilst 2020 benefitted
from furlough support of GBP0.6m. Furlough support had minimal
impact on the second half of 2020 at GBP0.1m, as there were no
furlough claims in November or December and no material further
claims for support are planned for 2021. We are not reliant on any
form of cash deferment or subsidy at this time.
We are addressing inventory control, through lowering capacity
and adapting our processing model with Ethiopia, broadening the
portfolio into 2020 and improving quality control. Our slow-moving
inventory fell to GBP2.8m (GBP3.2m:2019), and we have addressed
capacity and new channels to aid a reduction of core skin
inventory.
Overall inventory levels have fallen to GBP15.0m (2019:
GBP17.3m), and we are confident we will build on this progress in
2021, as our newly aligned capacity plan and business model should
facilitate further de-stocking in 2021.
Apart from inventory, working capital has been adversely
affected by the changing shape of the business. Credit terms to new
markets and customer mix has resulted in a modest increase in
debtor days. We have supported the supply chain with faster payment
in 2020 compared to 2019.
We were encouraged to achieve net debt at GBP10.1m (GBP9.6m:
2019), after the peak earlier in the year of GBP11.5m, considering
that we have also funded treasury shares worth GBP0.4m, with our
share buyback during Q4-2020. This was a robust cash performance,
with a GBP1.6m improvement in net debt since the half of 2020 on a
like for like basis, and to preserve debt within GBP0.1m of 2019
allowing for treasury shares.
One of the Group's key financial measures is gearing. Our
gearing rose to 73% in 2020 but we remain committed to manage down
gearing to sustainably below 70%.
During the year, Return on Capital Employed (ROCE) was negative,
decreasing from 4.2% positive in 2019. On an ongoing basis, our
Return On Investment (ROI) is recovering positively and we are
targeting to deliver our near term objective of returns above our
Weighted Average Cost of Capital (WACC) which fell to 3.8% in 2020
(2019: 4.9%).
End of year position
Net assets have decreased from GBP17.5m to GBP13.9m, mainly due
to the loss in the first half of the year and the devaluation of
Ethiopian BIRR.
The Group is actively seeking to mitigate foreign exchange risk
as far as practical. Due to economic uncertainty, we eased the
hedging strategy in 2020 by lowering cover to 40% and extending
cover to June 2022. Sales proportionally in GBP increased during
2020 assisting in lowering currency risk to GBP0.3m annual impact
on PBT, for every 10% move in US$.
Total net debt (including lease obligations and overdrafts)
increased to GBP10.1m as of 31 December 2020. Our headroom on Group
facilities improved however to GBP3.3m (GBP2.6m: 2019). Allowing
for own share purchases into treasury of GBP0.4m, our like for like
debt was GBP9.7m net debt as at 31 December 2020 (2019: GBP9.6m net
debt) when we did not have treasury shares. The UK business
achieved positive free cashflow (excluding CAPEX) for the year,
helped by falling inventory and improving EBITDA, marking a
significant change in operating performance.
Over the last two years we have invested GBP1.2m in capital
programmes to enhance operating capability and efficiency. We plan
increased capital spend in 2021, of circa GBP0.9m across the Group
after a pause during 2020, but these spends will be carefully
targeted with short payback, operational efficiencies and growth
prospects.
Consolidated Income Statement
For the year ended 31 December
2020
2020 2019
Note GBP'000 GBP'000
---------------------------------- ----- --------- ---------
Continuing operations
Revenue 2 15,233 22,301
Cost of sales (12,059) (15,404)
-------------------------------------- ----- --------- ---------
Gross profit 3,174 6,897
Distribution costs (1,632) (2,264)
Currency (losses)/gains expensed (48) 250
Administrative expenses (3,268) (3,706)
-------------------------------------- ----- --------- ---------
(Loss)/profit before operations
and finance costs (1,774) 1,177
Finance costs (508) (598)
-------------------------------------- ----- --------- ---------
(Loss)/profit before taxation (2,282) 579
Taxation 3 (144) (173)
-------------------------------------- ----- --------- ---------
(Loss)/profit after taxation (2,426) 406
-------------------------------------- ----- --------- ---------
Earnings per share
---------------------------------- ----- --------- ---------
Basic 4 (17.67)p 2.93p
Diluted 4 (17.67)p 2.90p
Consolidated Statement of Comprehensive Income
For the year ended 31 December
2020
2020 2019
GBP'000 GBP'000
------------------------------------------- -------- --------
(Loss)/profit for the
year after taxation (2,426) 406
Other comprehensive
income/(expense)
Items that will not be reclassified
to profit or loss
Revaluation of land
and buildings - net
of deferred tax 508 139
Retranslation of land and buildings
- unrealised exchange (loss) (575) (406)
---------------------------------------------- -------- --------
(67) (267)
Items that may subsequently be
reclassified to profit or loss
Unrealised exchange (loss) on translation
of overseas subsidiaries (860) (931)
Fair value gain on foreign currency
cash flow hedges 6 339
---------------------------------------------- -------- --------
(854) (592)
Other comprehensive
(loss) (921) (859)
Total comprehensive (loss) for
the year (3,347) (453)
---------------------------------------------- -------- --------
Balance sheets Group
------------------
As at 31 December
2020 2020 2019
Note GBP'000 GBP'000
------------------------------------- ----- -------- --------
Assets
Non-current assets
Property, plant, and
equipment 9,599 10,240
Intangible assets 75 114
Deferred income tax
asset 100 100
----------------------------------------- ----- -------- --------
Total non-current
assets 9,774 10,454
Current assets
Inventories 15,021 17,341
Trade and other receivables 2,848 3,462
Cash and cash equivalents 85 180
----------------------------------------- ----- -------- --------
Total current assets 17,954 20,983
Total assets 27,728 31,437
Liabilities
Current liabilities
Trade and other payables 2,863 3,430
Interest bearing loans, borrowings,
and overdrafts 5 6,909 9,381
---------------------------------------- ----- -------- --------
Total current liabilities 9,772 12,811
Non-current liabilities
Deferred income tax
liability 804 730
Interest bearing loans, borrowings,
and overdrafts 6 3,294 376
---------------------------------------- ----- -------- --------
Total non-current
liabilities 4,098 1,106
Total liabilities 13,870 13,917
Net assets 13,858 17,520
----------------------------------------- ----- -------- --------
Equity
Share capital 6,944 6,944
Share premium 2,984 2,984
Capital reserve 6,475 6,475
Own shares reserve 7 (850) (495)
Share based payment
reserve 47 295
Cash flow hedge reserve 293 287
Translation reserve (4,922) (4,062)
Revaluation reserve 1,099 1,166
Retained earnings 1,788 3,926
----------------------------------------- -------- --------
Total equity 13,858 17,520
----------------------------------------- ----- -------- --------
Richard Briere - Chief Financial
Officer
Consolidated Statement of Changes in Equity
For the year ended 31 December 2020
Share Cash
Own based flow
Share Share Capital share payment hedge Translation Revaluation Retained Total
capital premium reserve reserve reserve reserve reserve reserve Earnings Equity
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
As at 1 January
2019 6,944 2,984 6,475 (495) 203 (52) (3,131) 1,433 3,520 17,881
Comprehensive
income/(loss)
for the year:
---------------- ------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
Profit for the year
after taxation - - - - - - - - 406 406
Other
comprehensive
income/(loss):
Gain on the revaluation
of buildings - - - - - - - 139 - 139
Unrealised exchange
gain/(loss) on
translation
of foreign
subsidiaries - - - - - - (931) (406) - (1,337)
Fair value losses
on foreign currency
cash flow hedges - - - - - 339 - - - 339
------------------------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
Total other
comprehensive
income/(loss) - - - - - 339 (931) (267) - (859)
------------------------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
Total comprehensive
income/(loss) for the
year - - - - - 339 (931) (267) 406 (453)
Share-based payment
expense - - - - 92 - - - - 92
As at 1 January
2020 6,944 2,984 6,475 (495) 295 287 (4,062) 1,166 3,926 17,520
Comprehensive
income/(loss)
for the year:
---------------- ------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
Loss for the year
after taxation - - - - - - - - (2,426) (2,426)
Other
comprehensive
income/(loss):
Gain on the revaluation
of buildings - - - - - - - 508 - 508
Unrealised exchange
gain/(loss) on
translation
of foreign
subsidiaries - - - - - - (860) (575) - (1,435)
Fair value losses
on foreign currency
cash flow hedges - - - - - 6 - - - 6
------------------------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
Total other
comprehensive
income/(loss) - - - - - 6 (860) (67) - (921)
------------------------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
Total comprehensive
income/(loss) for
the year - - - - - 6 (860) (67) (2,426) (3,347)
------------------------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
Share-based payment
expense - - - - 40 - - - - 40
Purchase of own
ordinary shares - - - (355) - - - - - (355)
LTIP lapsed transferred
to reserves - - - - (288) - - - 288 -
As at 31 December
2020 6,944 2,984 6,475 (850) 47 293 (4,922) 1,099 1,788 13,858
------------------------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
Statement of cashflows
For the year ended 31 December
2020 Group
------------------
2020 2019
Note GBP'000 GBP'000
---------------------------------------- ----- -------- --------
Cash flows from operating
activities
Cash generated from
operations 8 549 (492)
Tax paid 16 (466)
Interest paid (489) (566)
-------------------------------------------- ----- -------- --------
Net cash generated/(used in) from
operating activities 76 (1,524)
Cash flows from investing
activities
Purchases of property, plant, and
equipment (252) (635)
Purchases of intangible
assets (12) (30)
-------------------------------------------- ----- -------- --------
Net cash (used) in
investing activities (264) (665)
Cash flows from financing
activities
Proceeds from borrowings 3,334 804
Repayment of bank loans (1,951) (1,061)
New finance lease obligations - 200
Repayment of obligations under
finance leases (71) (171)
Purchase of own ordinary
shares (355) -
Net cash generated/(used) in financing
activities 957 (228)
------------------------------------------- ----- -------- --------
Increase/(decrease) in cash and
cash equivalents 769 (2,417)
Cash and cash equivalents
at beginning of year (6,131) (3,695)
Exchange gains/(losses) on cash
and cash equivalents 285 (19)
------------------------------------------- ----- --------
Cash and cash equivalents at end
of year (5,077) (6,131)
------------------------------------------- ----- -------- --------
1. Basis of preparation
The consolidated financial statements have been prepared on a
going concern basis and in accordance with International Financial
Reporting Standards ("IFRS") including International Accounting
Standards ("IAS") and IFRS Interpretations Committee ("IFRS IC")
interpretations and with those parts of the Companies Act 2006
applicable to companies reporting under accounting standards as
adopted for use in the EU.
The information in this preliminary statement has been extracted
from the audited financial statements for the years ended 31
December 2020 and 2019 and as such, does not constitute statutory
accounts within the meaning of s434 of the Companies Act 2006. A
full annual report for the year ended 31 December 2019 on which the
auditor has issued an unqualified audit report, has been delivered
to the Registrar of Companies. The Group's annual report for 2020,
on which the auditors have issued an unqualified audit report, will
be delivered to the Registrar of Companies in due course. 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.
2. Geographical analysis of revenue (based on the customer's country
of domicile)
2020 UK Ethiopia Total
Division Division Total
GBP'000 GBP'000 GBP'000
------------------------------------- ------------ ----------- ----------
UK 1,995 141 2,136
Europe 1,172 458 1,630
North America 97 34 131
Far East and Rest of World 10,187 1,149 11,336
13,451 1,782 15,233
------------------------------------- ------------ ----------- ----------
2019 UK Ethiopia Total
Division Division Total
GBP'000 GBP'000 GBP'000
------------------------------------- ------------ ----------- ----------
UK 1,842 295 2,137
Europe 1,879 - 1,879
North America 165 989 1,154
Far East and Rest of World 15,964 1,167 17,131
19,850 2,451 22,301
------------------------------------- ------------ ----------- ----------
3. Taxation
2020 2019
GBP'000 GBP'000
---------------------------------------------------------- --------- ---------
(b) Factors affecting the tax charge for
the year
(Loss)/profit on ordinary activities before
tax (2,282) 579
--------------------------------------------------------------- --------- ---------
Tax calculated at domestic tax rates applicable
to profits in the respective countries (579) 137
Taxable losses not
recognised 575 -
Foreign tax related
to prior years1 64 159
Expenses not deductible
for tax purposes2 102 283
Allowable tax deductions3 (81) (183)
Profits/(losses) generated (107)
Deferred tax impact
on property valuation (10) -
Foreign tax paid 88 45
Double tax relief (15) (19)
Utilisation of losses (142)
Total tax charge for the year 144 173
-------------------------------------------------------------- --------- ---------
1 Foreign tax in prior years relates to a historic tax charge imposed
on ETSC.
2 Expenses not deductible for tax purposes largely relate to depreciation,
for which capital allowances are received.
3 Allowable tax deductions relate to capital allowances received.
(c) Factors that may affect future
tax charges
The Finance Act 2016 which was enacted on 15 September 2016 included
legislation to reduce the main rate of corporation tax to 17% from
1 April 2020. This change has since been cancelled and the main rate
of corporation tax remains at 19%. All UK deferred tax assets have
been measured using the rate in place at the time they expect to be
realised or settled.
4. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable
to equity holders of the company by the weighted average number of
ordinary shares in issue during the year excluding the shares owned
by the Pittards employee share ownership trust, less also the shares
not carrying voting or dividend rights, held in treasury under own
share reserve.
Earnings per share 2020 2019
Weighted average number of ordinary
shares in issue Basic 000s 13,733 13,870
Weighted average number of ordinary
shares in issue Diluted 000s 13,789 14,001
Basic (loss)/earnings per ordinary
50p share pence (17.67)p 2.93p
Diluted (loss)/earnings per ordinary
50p share pence (17.67)p 2.90p
Reconciliation of shares used as denominator
for earnings per share
Shares in issue all
year 13,870 13,870
Less weighted average own shares held
in treasury for 2 of the 12 months
of 2020 (137) -
-------------------------------------------------- --------- ------ ---------------- -------------
Average number of shares used
to calculate earnings per share 13,733 13,870
5. Interest-bearing loans, borrowings, and
overdrafts - current Group
-----------------------
2020 2019
GBP'000 GBP'000
------------------------------------------------------------ ----------- ----------
Secured:
Overdrafts 5,162 6,313
Loans 1,698 2,897
Obligations under finance leases 49 171
6,909 9,381
------------------------------------------------------------ ----------- ----------
The Company's overdraft and loan facilities are provided by Lloyds Bank.
During the year, the mortgage facility of GBP1.1m was replaced with
a new facility of GBP1.75m, with annual repayments of GBP0.2m and full
repayment in May 2025. In addition, a 6-year Coronavirus business interruption
loan for GBP1m was put in place with repayment not due until 2026 with
the first year interest free
6. Interest-bearing loans, borrowings, and
overdrafts - non-current Group
----------------------
2020 2019
GBP'000 GBP'000
-------------------------------------------------------- ---------- ----------
Secured:
Loans 3,288 326
Obligations under finance leases 6 50
3,294 376
-------------------------------------------------------- ---------- ----------
Repayable as follows:-
1-5 Years 3,194 376
After more than 5 years 100 -
3,294 376
-------------------------------------------------------- ---------- ----------
The fair value of the Group's loan and overdraft facilities is materially
the same as book value, and the secured facilities are supported by fixed
and floating charges over the assets of the Group, principally property,
plant and equipment, inventory, and receivables.
7. Reserves
The share premium account represents the difference between the issue
price and the nominal value of shares issued. The capital reserve relates
to goodwill arising on previous acquisitions written off directly to reserves.
The Pittards' Employee Share Ownership trust holds Pittards' plc ordinary
shares to meet potential obligations under the restricted share plan scheme.
Shares are held in trust until such time as they may be transferred to
employees in accordance with the terms of the scheme. There are no further
awards in the scheme which could vest in the participants. At 31 December
2020, the trust held 19,026, 50p shares (2019 19,026) with a market value
at that date of GBP8,942 (2019: GBP13,604).
Own shares reserve
comprises Group
-------------------------------------
2020 2019
GBP'000 GBP'000
---------------------------------------------- ------------------ -----------------
ESOP 495 495
Ordinary own shares
held in treasury 355 -
850 495
---------------------------------------------- ------------------ -----------------
During November 2020, GBP355,000 of own ordinary shares (AIM:PTD) at 38p
were acquired into treasury and are held under own share reserve.
The share-based payment reserve represents the fair value of the entitlement
to shares awarded under the 2017 SAYE scheme and the 2016 Long Term Incentive
Plan.
The cash flow hedge reserve represents the fair value of forward currency
contracts held under hedge accounting at the end of the year.
The translation reserve represents the cumulative net unrealised exchange
loss arising from the translation of overseas subsidiaries.
The revaluation reserve represents the revaluation of the buildings at
Yeovil, ETSC, PPM and GS undertaken annually.
The retained earnings reserve represents all other net gains and losses,
and transactions with owners including dividends, not recognised elsewhere.
8. Cash generated from / (used
in) operations
Group
------------------
2020 2019
GBP'000 GBP'000
-------------------------------------------------- -------- --------
(Loss)/ profit before taxation (2,282) 579
Adjustments for:
Depreciation of property, plant,
and equipment 616 780
Amortisation of intangibles 51 63
Bank and other interest charges 489 596
Share based payment expense 40 92
Other non-cash items in Income
Statement 1,302 (275)
----------------------------------------------------- -------- --------
Operating cash flows before movement
in working capital 216 1,835
Movements in working capital (excluding exchange
differences on consolidation): -
Decrease / (Increase) in inventories 513 (1,980)
Decrease / (Increase) in receivables 501 (383)
(Decrease) / Increase in payables (681) 36
------------------------------------------------------- --------
Cash generated /(used in) from
operations 549 (492)
----------------------------------------------------- -------- --------
Additional information
-- Copies of the full 2020 Annual Report will be available on
the company's website within 7 working days 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 14 May 2021 at 12pm.
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END
FR DXLFLFXLFBBB
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