Leeds Group continues to bounce back
PRE-TAX profits have risen at textile business the Leeds Group, as it continues to bounce back.
Pre-tax profit increased by 11.9% to £1.6m on revenue of £34.2m up from £31.1m, for the year ended May 31 2014. The group also announced this morning that chairman Kathryn Davenport will step down at the next AGM. The board is currently seeking an individual to join the board as an independent non-executive director.
The firm, headquartered in Drighlington, Bradford, suffered in 2012 when it was severely influenced by the write off the group’s investment in Scottish cashmere clothing manufacturer Dawson, which went into administration.
In its final results this morning, the group said it won’t pay an annual dividend to shareholders, as it continues to look for investment opportunities.
Leeds Group’s trading operations are conducted by Germany-based Hemmers. Hemmers also has a Chinese subsidiary based in Shanghai. Together these companies employ some 135 people.
At Hemmers, total fabric sales in the year increased by 9% to 12.8m linear metres and revenue rose to £31.4m from £28.2m. Pre-tax profit grew by 40% to £1.5m.
ChinohTex, the Hemmers subsidiary based in Shanghai, produced “satisfactory” results in the first half of the year, achieving significant volume growth thanks to sales of £531,000 (2013: £10,000) to a single customer in Mexico. Although these sales were at a low margin, they allowed the subsidiary to match the profit performance of the previous year. However, sales fell away sharply after the Chinese New Year in February, and margins were under constant pressure. For the year as a whole, sales volumes were 1.7m linear metres (2013: 1.5m), sales revenue was £2.8m (2013: £2.9m) and pre-tax profit shrank to £129,000, from £261,000 last year.
Looking forward, the Leeds Group said it has identified potential growth opportunities for Hemmers and shall be increasing its focus on the European garment manufacturers and the market for accessories to be sold by its customers in retail outlets. The firm also said it intends to provide customers of ChinohTex the opportunity to buy on-line.
