Leeds sales up

Leeds Group reports sales of £21,057,000 for the six months to the end of November - up from £18,489,000 a year ago - and made a profit after tax of £848,000 (2015: £692,000).

Earnings per share were 3.1 pence (2015: 2.5 pence).

The group said the weakness of sterling in recent months has had a material impact upon its results.

Sales growth of 13.9% over the first half of the previous financial year comprises a fall of 2.7% in sales at constant exchange rates, disguised by the translation effect of weaker sterling, which increased reported sales by 16.6%.

Similarly, the translation effect on the balance sheet has increased net assets by £1,269,000 since the group's year end on 31 May 2016. There has been a gain of some £300,000 in the value of the euro denominated parent company loan to Hemmers, and this has been locked in by the use of derivatives.

The group's major transactional currency exposure relates to the value of the Euro against the US dollar which, in contrast, has enjoyed a period of relative stability. In euro terms, revenue at Hemmers fell by 2.9% to €22,521,000 (2015: €23,203,000).

Growth was achieved in the retail and garment manufacturing sectors but this was offset by reduced sales into the wholesale sector, caused in part by an inability to keep up with demand for double folded items, a problem now addressed with the expansion of facilities in Nordhorn and the acquisition of additional folding machines.

The reduction in sales and an increased cost base led to a fall on pre-tax profit to €734,000 (€1,227,000).

At 2:26pm: (LON:LDSG) Leeds Group PLC share price was -0.5p at 37.5p