Pittards pleases as profits return to normal levels

27th Aug 2013 09:37

Shares in leather producer Pittards leapt on Tuesday after the group pleased investors with a return to 'more normal' levels of profit and a rise in net assets following a successful period of transition last year. Revenues for the half-year to June 30th edged £0.1m higher to £18.4m year-on-year, while pre-tax profit rose from £0.1m to £1.1m, which the company attributed to a better mix of products sold with a lower concentration of more commodity style leathers and partly due to some easing in skin prices in Ethiopia which remained at the level experienced in the second half of 2012.The improved dollar rate also strengthened the group's financial position. Chairman Stephen Boyd said: "In my 2012 statement last March I described 2012 as a year of transition following major structural changes in the business. I am pleased to report that these changes have yielded benefits in the first half of 2013 with a return to more normal levels of profitability."Net assets rose to £17.1m in the period with higher inventories and debtors as all the production units had a busy June period, while net debt accordingly rose from £5.7m to £6.7m in line with the usual seasonal pattern, although gearing remained at a creditable 39% (2012:40%), well within the group's target range.The firm was planning to carry out a share consolidation of the 463m shares in issue in order to make payment of dividends more practically achievable, something it intended to complete before the current year-end, with a view to paying a dividend within the next twelve months if the recovery continues. Looking ahead, the group added: "Global uncertainty is still a concern for many businesses but there are signs of recovery in some sectors and geographical areas of the world. We remain committed to our core strategy of investing in and building on our brand in both leather and finished products and our enthusiasm for growing the business and seizing any new opportunities which present themselves remains undimmed." The share price rose 34.15% to 2.75p by 10:00 Tuesday. NR