TIDMPTD
RNS Number : 6678F
Pittards PLC
23 March 2022
23 March 2022
Pittards PLC
Final Results for the year ended 31 December 2021
Return to full-year profitability; proposed final dividend;
improved Order Book for 2022
Pittards plc (AIM: PTD), the specialist producer of technically
advanced leather and luxury leather goods for retailers,
manufacturers, and distributors, is pleased to announce its audited
Final Results for the year ended 31 December 2021.
Commenting on the results, Stephen Yapp, Chairman of Pittards,
said: "Pittards has acquitted itself robustly... with a return to
full-year profitability. The resilience of the Group was
particularly evidenced by an increased sales revenue to
GBP19.7m....reflecting recovery in our core business and further
development of our new business sectors, including interiors and
shoes, resulting in a positive EBITDA of GBP1.4m and a profit
before tax of GBP0.5m."
Highlights: Financial
-- Revenues of GBP19.7m (2020: GBP15.2m)
-- Gross margin of 28 per cent (2020: 21 per cent)
-- EBITDA of GBP1.4m (2020: negative GBP1.2m)
-- Profit before tax of GBP0.46m (2020: GBP2.28m loss), a
satisfactory recovery given the wider macro pressures in the second
half
-- Earnings/(loss) per share of 2.12p (2020: loss of 17.67p)
-- Proposed final dividend of 0.5p per share making total
dividend of 1.0p per share for the year
-- Net debt at year-end of GBP10.69m (2020: GBP10.12m)
-- NAV at year-end of 101.9p per share (2020: 107.0p)
-- Sales order book opened 2022 stronger than at the start of
each of the previous three years
Highlights: Operational
-- Underlying stable profitability and return to pre covid levels
-- Second half remained profitable, despite logistic and input
cost challenges, and timing of price increases to customers
-- Inventory increased by GBP0.3m, due to buffer stock from
Ethiopia to mitigate supply chain risk
-- Q4-2021 sales orders resuming from both interiors and big shoe markets
-- Reduced risk in Ethiopia, whilst growing full shoe production
as a key development business
-- Developing collaboration with Vivobarefoot, a key international shoe customer
-- Continued focus and investment in innovation to deliver
better technical performance, creating sustainable products across
a broader
range of markets including big shoe, interiors, military and
equestrian
On current trading and outlook, Reg Hankey, CEO, added:
"We have started the current year with a better Order Book than
for each of the last three years and we believe that this higher
level of demand is sustainable. In addition to our traditional
markets, which have recovered well, we are now also well placed to
respond to our new strategic market sectors of interiors
(automotive, aviation and mass transit), large shoe brands and shoe
production in Ethiopia which are set for faster growth than
2021.
"With a more efficient cost base we will also be able to respond
more positively to recovering demand in the global marketplace and
the new capital projects implemented during 2021 will allow us to
grow capacity in a more efficient way during 2022. We remain
committed to a more balanced, agile business with a broader range
of customers, and we continue to believe that opportunities
outweigh risks to build on our 2021 performance in the current year
and beyond."
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) ("MAR") prior to its release as part
of this announcement and is disclosed, in accordance with the
Company's obligations under Article 17 of MAR.
For further information, please contact:
Pittards PLC
+44 (0) 1935 474321
Web: www.pittards.com
Stephen Yapp - Non-Executive Chairman
Reg Hankey - CEO
Richard Briere - CFO
WH Ireland
+44 (0)20 7220 1666
Web: www.whirelandcb.com
Mike Coe
Sarah Mather
Walbrook PR
+44 (0)20 7933 8780 or +44 (0)7768 807631
Email:- pittards@walbrookpr.com
Paul Vann
Nicholas Johnson
Chairman ' s statement for the year ended 31 December 2021
I can report that Pittards has acquitted itself robustly against
the strategies that we have in place, with a return to full year
profit.
The resilience of the Group was particularly evidenced by an
increased sales revenue to GBP19.7m resulting in a positive EBITDA
of GBP1.4m and profit before tax of GBP0.5m, with returns on
capital employed exceeding our weighted average cost of
capital.
Sales increased by 29%, reflecting recovery in our core business
and further development of our new business sectors, including
interiors and shoes. The second half financial performance was
affected by challenges in the supply chain, together with general
inflationary pressures.
Throughout the year we have managed our inventory prudently,
particularly in the light of unrest in Ethiopia and delays in
reliability of shipping. As a result, we intentionally increased
our raw material stocks in the UK to ensure reliable supply for our
customers.
A remarkable contribution has been made by all our staff once
again during this year. We are pleased that our staff headcount has
remained broadly the same, and reflects a well-balanced, diverse
team, both in Ethiopia and UK, capable of meeting the challenges
facing the business. I thank them all for their considerable
efforts.
The Board is confident in the Group's business strategy and is
committed to its future success, with Board members increasing
their shareholding in Pittards. The Board's collective shareholding
rose to 7.6% at the end of 2021 (2020: 6.4%).
There were no changes to the Board during the year. As
previously announced, Richard Briere (CFO), will be stepping down
in April 2022 after 3 years and we thank him for his
contribution.
In Q3, 2021 we undertook a further modest share buyback of
40,000 shares, resulting in 974,210 shares now being held in
treasury. Also, in Q4 2021, we returned to the dividend list with a
payment of 0.5p per share. A final dividend of 0.5p per share is
being proposed for 2021 making the total dividend for the year 1.0p
per share (2020: GBP nil ). Subject to the approval of shareholders
at the AGM, to be held on 17 May 2022, the final dividend will be
paid on 5 August 2022 to shareholders on the register at the close
of business on 1 July 2022. The shares will go ex-dividend on 30
June 2022.
Outlook
In accordance with our strategic priorities, we are delivering a
broader range (including finished shoes and packs for automotive)
of products to more market segments ( including outdoor endurance,
interiors and automotive ) therefore creating a more balanced
portfolio. We continue to invest in new leading-edge technology,
investing GBP0.8m in 2021, and we have planned further capital
investments in 2022/23. Our focus continues , on growth , driven by
innovation and sustainable development.
We have entered 2022 with a much stronger order book than the
previous year . It remains too early to judge how strong the
recovery will be, given the heightened uncertainty caused by the
conflict in Ukraine, inflationary pressures, and continued supply
chain challenges.
However, we remain cautiously optimistic that the group will see
continued growth in the year.
Stephen Yapp
Chairman
23 March 2022
Chief Executive Officer's report
Key performance indicators
Full year
-------------------------------------
2021 2020
GBPm GBPm
---------------------------- ---- -------- -------- ---- ---- ------------------ -----------------
Revenue 19.66 15.23
Gross profit 5.46 3.17
Gross margin 28% 21%
----------------------------------------------------------------- ------------------ -----------------
Profit / (Loss) before
tax 0.46 (2.28)
EBITDA 1.41 (1.16)
Net assets 13.07 13.80
Inventory 15.32 15.02
Net debt 10.69 10.10
----------------------------------------------------------------- ------------------ -----------------
Net debt adjusted for
treasury shares held 10.29 9.80
CAPEX spend 0.78 0.25
Gearing 81.8% 73.2%
Staff numbers 1,108 1,096
Basic earnings /
(loss) per share
(in pence) 2.12 (17.67)
Net Asset per share
(in pence) 101.92 107.00
CEO Highlights
-- Profit before tax of GBP0.46m (GBP2.38m loss: 2020), a
satisfactory recovery given the wider macro pressures in the second
half
-- EBITDA GBP1.4m (2020: negative GBP1.1m)
-- Sales order book opened 2022 stronger than the start of each
of the previous three years
-- Inventory increased by GBP0.3m, due to buffer stock from
Ethiopia to mitigate supply chain risk
-- Q4-2021 sales orders resuming from both interiors and big shoe markets
-- Reduced risk in Ethiopia, whilst growing full shoe production
as a key development business
-- Developing relationship with Vivobarefoot, a key shoe
customer for our Ethiopian business
COVID-19 response
During the first quarter of 2021, together with many other
businesses, we were challenged with the renewed impact of a third
lock down due to COVID-19. As the global pandemic unfolded, this
unusual situation continued to affect our people, our customers and
supply chains.
We continued with our responsive approach from 2020 to the
challenges we faced and reviewed this on a weekly basis. The key
pillars of our plan focused on:
-- Safety of people - Implementing best practice in line with government advice
-- Customer support - Continued to supply and ongoing dialogue
-- Cash management - Strict daily control
-- Cost control - Realignment of all costs
Chief Executive Officer's report
Performance review
Sales demand for leather and related goods continued to improve
throughout the year with full year revenue at GBP 19.7m (2020:
GBP15.2m).
The changing shape of the business is aligned with our strategic
priorities to achieve a more balanced customer and product
portfolio, in particular the inroads made via Ethiopia in shoe
production and sales, together with UK interiors and key shoe
accounts. These remain priority development markets for the Group
with volumes increasing by 12%. We expanded our design and
production management functions to support a broader product
offering.
Over the last two years we have established a more resilient
business that is more profitable at lower levels of activity than
in 2019, and 2021 built on this. Whilst costs overall rose as a
result of increased production, administrative costs reduced.
We continued to operate COVID safe working procedures in line
with government guidance throughout the year. We are fortunate in
having relatively large production facilities in both the UK and
Ethiopia which enabled us to implement socially distanced working
practices.
Gross margin was 28% (2020: 21%) with EBITDA recovering to
GBP1.4m (2020: negative GBP1.1m) and PBT of GBP0.46m (2020: GBP2.3m
loss). Headcount rose modestly to 1,108 (2020: 1,096) with the
increase being centered on production and technical staff.
In Ethiopia, the development of the COVID pandemic lags the UK.
This coupled with wider instability in the country, during 2021,
meant we had a raised level of supply chain risk. Although the
Ethiopian factories remained open throughout the period the board
decided it was prudent to mitigate this risk further through
acquiring additional buffer stock of the unique sheepskins that are
used to make our technical glove leathers.
Overall inventories rose to GBP15.3m (2020: GBP15.0m) due to the
increase in raw materials explained above and offset by a reduction
in older inventory of approximately GBP1.0m.
Raw material prices have broadly stabilized, having peaked in Q3
2021. We have successfully broadened our procurement strategy to
achieve a more consistent supply and purchase price from a broader
supply base, reducing supply chain risks.
Net debt at 31 December increased GBP0.58m, to GBP10.69m (2020:
GBP10.11m), mostly as a consequence of more bufffer material held
in Yeovil.
US dollar rates moved slightly against us during 2021, although
average exchange rates were broadly unchanged on 2020. The Group
has hedged between 40% and 60% of requirements, resulting in an
average exchange rate of $1.355 through to June 2023. The average
rate in 2021 for the Group was $1.37, broadly unchanged on
2020.
During 2021, we invested GBP0.8m in machinery to improve our
efficiency and expand our capability and capacity.
Market view
We adapted our approach to customer engagement through the
broader use of virtual meetings, as the obvious travel inhibiting
factors of the pandemic remained throughout the year.
During the last two years, the overall demand for leather has
been affected by numerous global factors, principally COVID-19
lockdowns, China/US tariffs and overall weakness in the global
economy. Although Brexit had little impact on the Group there have
been some complications around logistics and administration.
Given the increase in consumers' appetite for outdoor pursuits ,
including golf and endurance sports, we have started to see some
recovery in demand in these market segments as social restrictions
ease globally. Some of our other market segments have been harder
hit by the pandemic, most notably the aviation and automotive
industry, where global sales are down significantly since 2019
levels, albeit we continued to sell into these segments.
Notwithstanding the challenges faced by these industries, we have
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 .
We continue to develop our direct-to-consumer digital sales
channels in the UK and Ethiopia.
Operations
2021 was a challenging year for the Operations team as we
increased sales by 29%, whilst managing efficiency and costs,
together with training additional new young members of our
workforce to allow for further growth in the future.
Ben Johnson joined in December 2020 as the UK Director of
Production. He and his team have made substantial progress and have
successfully installed a high level of capital equipment during his
first full year. The extra sheepskin stocks from Ethiopia required
additional processing in the UK, which added to the complexity but
benefitted from our investment in new machinery which delivered
improved quality and yield.
Investing in the next generation is an important part of our
business. We were approved for the UK Government's Kickstart scheme
for 16-24 year olds, we finished the year with a good outcome
creating permanent jobs for over 10 Kickstart members. We also
continue to recruit Apprentices into the business, by adding two
further.
The reliability of logistics, in particular, shipping, and
transport, but also stock shortages in the supply chains has meant
continually replanning of the production. Freight costs have
increased dramatically adding GBP0.3m on a like for like basis. The
team continue to work on finding innovative solutions to these
challenges. These rising costs also apply to our competitors
offering some new opportunities as new supply chains develop.
In Ethiopia we have continued to broaden our manufacturing
capability in finished products and have increased sales in
footwear alongside the production of shoe leather. This has so far
been focused upon producing leather and shoes for Vivobarefoot and
the local market.
During the year we responded to higher volumes by challenging
how we work. Processing is split between Ethiopia and the UK, and
the UK has taken on a higher proportion of the processing of our
technical performance finished leather.
Outlook for 2022
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.
Looking forward to 2022, we have started the year with a better
order book than each of the last three years and we believe that
this higher level of demand is sustainable. In addition to our
traditional markets, which have recovered well, we are also well
placed to respond to our new strategic market sectors of interiors
(automotive, aviation and mass transit), larger shoe brands and
shoe production in Ethiopia which are set for faster growth than
2021.
We have during March 2022 signed a letter of intent with
Vivobarefoot with planned sales in excess of $2m USD. We aim to
manufacturer and sell over 50% more shoes to this customer compared
to 2021, which assists in underpinning our confidence to continue
to grow back sales.
With a more efficient cost base we will also be able to respond
more positively to recovering demand in the global marketplace, and
new capital projects implemented during 2021 will allow us to grow
capacity in a more efficient way during 2022. Recruitment is
expected to be significantly lower in 2022 than 2021, given that
the newly shaped team, is now established.
Our commitment to our sustainable and responsible supply chains
are well established and we will continue to build upon our
continuous improvement culture which is consistent with the
aspirations of our growth customers.
Our employees have come through many challenges during 2021. By
working together and evolving our working practices we will
continue to develop our flexible approach allowing agile responses
to our customers' needs.
Although there are still some unpredictable macro-economic
factors, specifically the instability in Europe, and inflationary
cost pressures, our confidence is growing as we build a better
balanced business with a broader range of customers. We are
conscious of the unstable situation in Ukraine and Russia, and
specifically the sanctions environment. Our direct exposure to
those territories is not material. We do anticipate that there will
be some challenges arising in global markets more generally.
Whilst the reliability of global supply chains remains a doubt,
we will continue to focus on inventory levels and efficient use of
working capital.
We remain committed to a more balanced, agile business and we
continue to believe that opportunities outweigh risks to build on
our 2021 full year performance.
Reg Hankey
Chief Executive Officer
23 March 2022
Chief Financial Officer's report
Financial review
Sales revenue increased to GBP19.7m (2020: GBP15.2m), despite
periods of substantial disruption, with gross profit rising
strongly to GBP5.5m (2020: GBP3.2m). We achieved improved gross
margins, underpinned by the low-cost facility in Ethiopia, greater
operational efficiency through lower labour cost per output and a
broader product range with better margin contribution.
Cost savings remained a key feature of 2021, with annual cost
savings of GBP2m heading into 2021 compared to 2019 , whilst 2020
benefitted from furlough support of GBP0.6m reducing our costs
(2021: Nil). We are not reliant on any form of cash deferment or
subsidy during or at the end of the financial year. We did claim
GBP185k of kick start grant funds, to support the kick start
program, which reduced staff costs.
Overall inventory levels rose to GBP15.3m (2020: GBP15.0m)
reflecting the strategic increased purchases of raw material in the
second half in the light of challenging logistics, and unrest in
Ethiopia, this was offset by a GBP1m reduction in older slow moving
stock. We are confident we will build on the progress made in 2021
and 2020, as our newly aligned capacity plan and reprocessing of
existing stock to broaden utilisation of slower moving stock,
continues to take effect.
Working capital has also been adversely affected by the changing
shape of the business. Credit terms to new markets and customer mix
have resulted in a modest increase in debtor terms and similarly to
balance working capital creditors days which grew by 7 days .
Net debt was GBP10.69m ( GBP10.12m: 2020).
One of the Group's key financial measures is gearing. Our
gearing rose to 81% at the end of 2021 (2020: 73%) we remain
committed to progressively reducing gearing.
End of year financial position and commitments
Total net debt (including lease obligations and overdrafts)
increased to GBP10.69m as of 31 December 2021. Headroom on Group
facilities was GBP2.6m (GBP3.1m: 2020). The UK business achieved
positive free cashflow being cashflow from operations and after
working capital excluding capital expenditure for the year, despite
rising inventory.
Net assets decreased from GBP13.9m to GBP13.1m, due to entirely
to the devaluation of the Ethiopian BIRR on Ethiopian held assets.
The net assets of the group include GBP2.4m of net assets that are
held in Ethiopia.
The Group is actively seeking to mitigate foreign exchange risk
as far as practical, and US dollar remains a key risk which is
managed. Due to economic uncertainty, we eased the hedging strategy
in 2021 by lowering US$ cover to 40% and extending it to June
2023.
We plan modest capital expenditure in 2022, of circa GBP0.4m
across the Group after a significant spend in 2021 of GBP0.8m, but
these spends will be carefully targeted with short payback,
operational efficiencies and growth prospects. We have not yet
formally committed to this spend.
With the reduction in transit stock likely to materially reduce
by the end of the first half of 2022, we anticipate a modest fall
in inventory levels and improving cash headroom, as our purchasing
commitment for inventory is expected to be lower during the first
half of 2022.
Gross margins
Gross margin increased to 28% (2020: 21%).
Business environment
The leather industry is a global business; wherever countries
have meat and dairy industries, hides and skins will be produced as
by-products. Group policy is to only process hides and skins that
are a by-product of these industries.
The Group operates in the UK, where it sources most of its
hides, and in Ethiopia, where it sources local hair sheep skins,
goat skins and hides. The Group exports on average 79% of its
production into 39 countries over four continents.
The demand for quality leathers that protect and enhance user
experience, especially in sports science, and consumer appetite for
outdoor activities, including golf and endurance, has helped the
recovery in these core markets in which we operate.
Anti-bribery and corruption
Pittards is committed to conducting its business affairs to
ensure that it does not engage in or facilitate any form of bribery
or corruption in any parts of its supply chain or in interaction
with other stakeholders regardless of geographical location.
Expected standards of behaviour are outlined in the anti-bribery
and corruption policy, which also provides guidance on the giving
and receiving of gifts and hospitality. We have not traded with
Russian companies during recent years, including the full year 2021
or so far in 2022.
Principal risks and uncertainties
Risk management is an important part of the management process
throughout the Group, with regular reviews of the key risks
identified and the adequacy of the controls in place to mitigate
the risks. The current risks considered to be key to the Group are
as follows :
Coronavirus (COVID-19)
The safety of our staff, customers and wider community remains
our key priority, and we will observe government guidance. The
uncertainty of a lock down appears more predictable now. The
lockdown enforced in January 2021 did not materially impede our
progress. We have learnt a great deal about operating the business
through periods of disruption, and we maintain contingency both in
resources and available funding should further unforeseen
disruption arise.
Currency
The Group is subject to the current volatility in the currency
markets, particularly US dollar, Ethiopian Birr and Euro. The Group
manages its exposure by maintaining a natural hedge where possible,
for the US dollar and Euro. In 2021, the Group entered foreign
forward currency contracts to hedge against movements in the US
dollar, adopting a cash flow hedging strategy, in response to the
anticipated continued volatile currency markets. The Group has
moderate forward cover of 40% through to June 2023 and will
continue to review strategy in this area in the light of certainty
of future sales, mix of business, customer sentiment and order
flow.
Political
Globally the political environment has been variable during
2021. We view this as short term in nature, and it has not impeded
business operations. Despite the unrest in Ethiopia during 2021 we
continued to trade as normal with no disruption to operations. In
the UK, we now have more certainty regarding the country's future
relationship with the European Union. The Group's exposure to
Europe is supply driven, with some of its purchases derived from
Europe. The global situation has a less optimistic tone at the
start of 2022, which has naturally created uncertainty for all
businesses, and ours is no exception, although in the near-term we
have not experienced any material impact to our staff, business, or
customers.
Supply
The availability of quality raw materials is paramount to the
business. The Group owns Ethiopia Tannery Share Company (which is a
main supplier of Ethiopian skins) and has strong relationships with
other major suppliers of skins and hides in Ethiopia, the UK and
around the world.
Energy cost and waste management
The Group is exposed to price volatility in the supply of energy
and an increased burden of environmental costs. The Group uses
industry experts to obtain the best energy rates available and
continuous improvements are sought in reducing waste of all kinds
from the business.
Working capital
The Group actively monitors its liquidity position to ensure it
has enough available funds and working capital to operate and meet
its planned commitments. The Group continues to have excellent
working relationships with its banking partners both in the UK and
Ethiopia and has sufficient facility levels to meet its planned
requirements.
Through its activities, the Group is exposed to a variety of
financial risks; market (including currency, price, and interest
rate), liquidity and credit.
Share buybacks and dividends
During November 2021, the company paid a dividend to all
shareholders of 0.5p per share, excluding ordinary shares held in
treasury, and a final dividend has been proposed of 0.5p per
ordinary share and, if approved, will be recorded within the
financial statements for the year ended 31 December 2022 . The
company purchased a further 40,000 of its own ordinary shares
during Q3-2021, with treasury shares rising to 974,210,
representing 7% of the issued share capital.
Richard Briere
Chief Financial Officer
23 March 2022
Consolidated Income Statement
For the year ended 31 December
2021
2021 2020
Note GBP'000 GBP'000
--------------------------------- ----- --------- ---------
Revenue 19,655 15,233
Cost of sales (14,198) (12,059)
------------------------------------- ----- --------- ---------
Gross profit 5,457 3,174
Distribution costs (1,631) (1,632)
Currency gains / (losses)
expensed 266 (48)
Administrative expenses (3,176) (3,268)
------------------------------------- ----- --------- ---------
Profit/(Loss) before operations
and finance costs 916 (1,774)
Finance costs (459) (508)
------------------------------------- ----- --------- ---------
Profit/(Loss) before taxation 457 (2,282)
Taxation 3 (182) (144)
------------------------------------- ----- --------- ---------
Profit / (Loss) after taxation 275 (2,426)
------------------------------------- ----- --------- ---------
Earnings / (Loss) per share
--------------------------------- ----- --------- ---------
Basic 4 2.12 (17.67)
Diluted 4 2.12 (17.67)
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
2021 2020
GBP'000 GBP'000
--------------------------------------------------------- -------- --------
Profit / (Loss) for the period after taxation 275 (2,426)
Other comprehensive income / (expense)
Revaluation of land and buildings 453 508
Revaluation of land and buildings - unrealised exchange
(loss) (517) (575)
------------------------------------------------------------ -------- --------
(64) (67)
Unrealised exchange (loss) on translation of overseas
subsidiaries (551) (860)
Fair value (loss) on foreign currency cash flow
hedges (381) 6
------------------------------------------------------------ -------- --------
(932) (854)
Other comprehensive (loss) (996) (921)
Total comprehensive (loss) for the period (721) (3,347)
------------------------------------------------------------ -------- --------
Balance sheets Group Company
------------------ -------------------
As at 30 December
2021 2021 2020 2021 2020
Note GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- ------ -------- -------- -------- ---------
Assets
Non-current assets
Property, plant
and equipment 9,700 9,599 5,950 5,530
Intangible assets 63 75 63 75
Investment in Subsidiary
undertakings - - 378 378
Loans receivable - - 1,607 1,765
Deferred income
tax asset 100 100 100 100
------------------------------------------ ------ -------- -------- -------- ---------
Total non-current
assets 9,863 9,774 8,098 7,848
Current assets
Inventories 15,316 15,021 12,454 10,916
Trade and other
receivables 3,304 2,848 8,778 5,995
Cash and cash equivalents 51 85 8 8
------------------------------------------ ------ -------- -------- -------- ---------
Total current assets 18,671 17,954 21,240 16,919
Total assets 28,534 27,728 29,338 24,767
Liabilities
Current liabilities
Trade and other
payables 3,830 2,863 6,289 2,730
Interest bearing loans, borrowings
and overdrafts 5 7,783 6,909 6,226 4,881
----------------------------------------- ------ -------- -------- -------- ---------
Total current liabilities 11,613 9,772 12,515 7,611
Non-current liabilities
Deferred income
tax liability 900 804 - -
Interest bearing loans, borrowings
and overdrafts 6 2,955 3,294 2,338 2,391
----------------------------------------- ------ -------- -------- -------- ---------
Total non-current
liabilities 3,855 4,098 2,338 2,391
Total liabilities 15,468 13,870 14,853 10,002
Net assets 13,066 13,858 14,485 14,765
------------------------------------------ ------ -------- -------- -------- ---------
Equity
Share capital 6,944 6,944 6,944 6,944
Share premium 2,984 2,984 2,984 2,984
Capital reserve 6,475 6,475 - -
Own shares reserve 7 (375) (850) (375) (850)
Share based payment
reserve 56 47 56 47
Cash flow hedge
reserve (88) 293 (88) 293
Translation reserve (5,473) (4,922) - -
Revaluation reserve 1,035 1,099 179 179
Retained earnings 1,508 1,788 4,785 5,168
------------------------------------------ -------- --------
Total equity 13,066 13,858 14,485 14,765
------------------------------------------ ------ -------- -------- -------- ---------
In accordance with the exemptions given by section 408 of the Companies
Act 2006, the Company has not presented its own Statement of Comprehensive
Income or Income Statement. The Company made a profit of GBP0.2m (2020:
loss of GBP1.5m).
The financial statements were approved and authorised for issue by
the Board of directors on 23 March 2022 and signed on its behalf by:
Company
Number
Richard Briere - Chief -
Financial Officer 0102384
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
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
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
(loss):
Gain on the revaluation
of buildings - - - - - - - 522 - 522
Unrealised exchange
gain/(loss) on
translation
of foreign
subsidiaries - - - - - - (860) (589) - (1,449)
Fair value losses
on foreign currency
cash flow hedges - - - - - 6 - - - 6
------------------------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
Total other
comprehensive
(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
Lapse of LTIP (288) 288 -
Purchase of own
ordinary shares (355) - - - - - (355)
------------------------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
As at 1 January
2021 6,944 2,984 6,475 (850) 47 293 (4,922) 1,099 1,788 13,858
Comprehensive
income/(loss)
for the year:
---------------- ------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
Profit for the
period after taxation - - - - - - - - 275 275
Other
comprehensive
income/(loss):
Gain on the revaluation
of buildings - - - - - - - 453 - 453
Unrealised exchange
gain/(loss) on
translation of
foreign subsidiaries - - - - - - (551) (517) - (1,068)
Fair value losses
on foreign currency
cash flow hedges - - - - - (381) - - - (381)
------------------------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
Total other
comprehensive
(loss) - - - - - (381) (551) (64) - (996)
------------------------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
Total comprehensive
income/(loss) for
the period - - - - - (381) (551) (64) 275 (721)
------------------------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
Share-based payment
expense - - - - 9 - - - - 9
Purchase of own
ordinary shares - - - (20) - - - - (4) (24)
Dividends paid
to equity holders - - - - - - - - (65) (65)
ESOP scheme closed - - - 495 - - - - (486) 9
As at 30 December
2021 6,944 2,984 6,475 (375) 56 (88) (5,473) 1,035 1,508 13,066
------------------------ -------- -------- -------- -------- -------- -------- ------------ ------------ --------- --------
Statement of cashflows
For the year ended 31 December
2021 Group Company
------------------ ------------------
2021 2020 2021 2020
Note GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ----- -------- -------- -------- --------
Cash flows from operating
activities
Cash generated from
operations 8 181 549 (139) 218
Tax paid (83) 16 - -
Interest paid (447) (489) (194) (159)
--------------------------------------- ----- -------- -------- -------- --------
Net cash (used in) from operating
activities (349) 76 (333) 59
Cash flows from investing
activities
Purchases of property, plant and
equipment (372) (252) (325) (191)
Purchases of intangible
assets (11) (12) (11) (12)
Proceeds from sale
of plant 42 - 42 -
--------------------------------------- ----- -------- -------- -------- --------
Net cash (used) in
investing activities (341) (264) (294) (203)
Cash flows from financing
activities
Proceeds from borrowings - 3,334 - 2,750
Repayment of bank loans (733) (1,951) (391) (1,209)
Repayment of obligations
under finance leases (21) (71) (15) (71)
Payment of equity dividends (65) - (65) -
Purchase of own ordinary
shares (20) (355) (20) (355)
Net cash (used) / generated
in financing activities (839) 957 (491) 1,115
------------------------------------- ----- -------- -------- -------- --------
(Decrease) / Increase in cash
and cash equivalents (1,529) 769 (1,118) 971
Cash and cash equivalents
at beginning of year (5,077) (6,131) (4,586) (5,563)
Exchange gains/(losses) on
cash and cash equivalents 238 285 (45) 6
------------------------------------- ----- -------- -------- --------
Cash and cash equivalents
at end of year (6,368) (5,077) (5,749) (4,586)
--------------------------------------- ----- -------- -------- -------- --------
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 2021 and 2020 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 2020 on which the
auditor has issued an unqualified audit report, has been delivered
to the Registrar of Companies. The Group's annual report for 2021,
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. Business segments information
2021 UK Ethiopia Consolidation
Division Division adj Total
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- --------- --------- -------------- ---------
Revenue from customers 18,227 4,956 (3,528) 19,655
Inter-segmental trading - (3,528) 3,528 -
--------------------------------------- --------- --------- -------------- ---------
18,227 1,428 - 19,655
Gross profit 4,528 902 27 5,457
--------------------------------------- --------- --------- -------------- ---------
Profit/ (Loss) before
tax 367 (536) 626 457
--------------------------------------- --------- --------- -------------- ---------
Assets 29,426 8,460 (9,352) 28,534
--------------------------------------- --------- --------- -------------- ---------
Liabilities (14,941) (6,071) 5,544 (15,468)
--------------------------------------- --------- --------- -------------- ---------
Net assets 14,485 2,389 (3,808) 13,066
2020 UK Ethiopia Consolidation Total
Division Division adj Total
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- --------- --------- -------------- ---------
Revenue from customers 13,622 4,062 (2,451) 15,233
Inter-segmental trading (171) (2,280) 2,451 -
--------------------------------------- --------- --------- -------------- ---------
13,451 1,782 - 15,233
Gross profit 3,023 413 (262) 3,174
--------------------------------------- --------- --------- -------------- ---------
(Loss) before tax (955) (1,327) - (2,282)
--------------------------------------- --------- --------- -------------- ---------
Assets 31,506 9,219 (12,997) 27,728
--------------------------------------- --------- --------- -------------- ---------
Liabilities (14,894) (6,703) 7,727 (13,870)
Net assets 16,612 2,516 (5,270) 13,858
Geographical analysis of revenue (based on the customer's country
of domicile)
2021 UK Ethiopia
Division Division Total
GBP'000 GBP'000 GBP'000
----------------------------- ---------- -------------------- --------
UK 2,422 361 2,783
Europe 450 313 763
North America 126 - 126
Far East and Rest of World 15,229 754 15,983
18,227 1,428 19,655
----------------------------- ---------- -------------------- --------
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
----------------------------- ---------- -------------------- --------
3. Taxation 2021 2020
GBP'000 GBP'000
------------------------------------------------------ -------- --------
(a) Analysis of the credit)/charge in the
year
The (credit)/charge based on the (loss)/profit
for the year comprises:
Corporation tax on
profit for the year - -
Foreign tax on profit
for the year 10 79
Foreign tax related
to prior years 148 65
--------------------------------------------------------------
Total current tax 158 144
-------------------------------------------------------------- -------- --------
Deferred tax
Origination and reversal of temporary differences 24 -
----------------------------------------------------------- --------
Total deferred tax 24 -
-------------------------------------------------------------- -------- --------
Income tax (credit)/charge 182 144
-------------------------------------------------------------- -------- --------
The Group's profits/losses for the year are taxed at the standard
rate of corporation tax in the UK of 19% (2020: 19%) and Ethiopia
of 30% (2020: 30%). The tax assessed in each year differs from the
standard rate of corporation tax for the relevant year. The group
retains taxable losses in the UK of GBP13.8m to utilise in future
periods. The differences are explained below:
2021 2020
GBP'000 GBP'000
---------------------------------------------------------- --------- ---------
(b) Factors affecting the tax charge for
the year
(Loss)/profit on ordinary activities before
tax 457 (2,282)
--------------------------------------------------------------- --------- ---------
Tax calculated at domestic tax rates applicable
to profits in the respective countries 13 (579)
Impact of tax losses
not recognised 160 575
Foreign tax related
to prior years (1) 148 64
Expenses not deductible
for tax purposes (2) 77 102
Allowable tax deductions
(3) (207) (81)
Foreign tax paid 13 88
Double tax relief (22) (15)
Deferred tax impact
of property valuation - (10)
Total tax charge /(credit)
for the year ( Note 3(a)
) 182 144
------------------------------------------------------------ --------- ---------
1 Foreign tax in prior years relates to a historic tax charge imposed
on PPM and withholding tax paid.
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 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.
4a. 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 held in treasury
under own share reserve, by the company not carry voting or dividend rights.
Earnings per share 2021 2020
Weighted average number of ordinary shares in
issue Basic 000s 12,946 13,733
Weighted average number of ordinary shares in
issue Diluted 000s 12,946 13,789
Basic (loss)/earnings per ordinary 50p share pence 2.12 (17.67)
Diluted (loss)/earnings per ordinary 50p
share pence 2.12 (17.67)
4b. Dividends
2021 2020
GBP'000 GBP'000
----------------------------------------------------------- ------ -------- --------
Ordinary dividends paid during the year
Interim dividends of 0.5p per share 65 -
The Directors are proposing a final dividend
for the 2021 year of 0.5pence per share,
(2020: GBPnil) in respect of the financial
period ended 30 December 2021.
5. Interest-bearing loans, borrowings and
overdrafts - current Group Company
------------------ ------------------
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------- -------- -------- -------- --------
Secured:
Overdrafts 6,419 5,162 5,757 4,594
Loans 1,263 1,698 375 275
Obligations under leases 101 49 94 12
7,783 6,909 6,226 4,881
------------------------------------------- -------- -------- -------- --------
The Company's overdraft and loan facilities are provided by Lloyds
Bank. During the year, GBP0.4m of new hire purchases from Lloyds
Bank was drawn down. .
6. Interest-bearing loans, borrowings and
overdrafts - non current Group Company
------------------ ------------------
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------------- -------- -------- -------- --------
Secured:
Loans 2,647 3,288 2,030 2,388
Obligations under leases 308 6 308 3
2,955 3,294 2,338 2,391
-------------------------------------------- -------- -------- -------- --------
Repayable as follows:-
1-5 Years 2,955 3,194 2,338 2,291
After more than 5 years - 100 - 100
2,955 3,294 2,338 2,391
-------------------------------------------- -------- -------- -------- --------
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 held Pittards' plc ordinary
shares to meet potential obligations under the restricted share plan
scheme. Shares were 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 2021, the trust held nil, 50p shares (2020: 19,026)
with a market value at that date of GBPNil (2020: GBP8,942).
Own shares reserve Group Company
comprises
------------------------------ ------------------
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- -------------- -------------- -------- --------
Own share reserve
comprises
ESOP - 495 - 495
Ordinary own shares
held in treasury 375 355 375 355
375 850 375 850
-------------------------------------- -------------- -------------- -------- --------
During the year the ESOP trust scheme was dissolved and remaining assets
disbursed by the trustees, which amount to cash of GBP1,320 and 19,126
of ordinary shares.
The cash flow hedge reserve represents the fair value of forward currency
contracts held under hedge accounting at the end of the year. See note 26
for further details.
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 Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Profit / (Loss) before taxation 457 (2,282) 172 (1,460)
Adjustments for:
Depreciation of property, plant
and equipment 475 616 320 341
Amortisation of intangibles 23 51 23 51
Bank and other interest charges 447 489 233 174
Share based payment expense 9 40 9 40
Other non-cash items in Income Statement (556) 1,302 122 370
Operating cash flows before movement
in working capital 855 216 879 (484)
Movements in working capital (excluding exchange
differences on consolidation):
(Increase) / Decrease in inventories (1,100) 513 (1,538) 451
(Increase) / Decrease in receivables (507) 501 (2,858) 293
Increase / (Decrease) in payables 933 (681) 3,382 (42)
Cash generated /(used in) from operations 181 549 (135) 218
Additional information
-- Copies of the full 2021 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 17 May 2022 at 12pm.
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END
FR UUVBRUAUOUAR
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