Interim Results

Leeds Group PLC
6 June 2000


Interim Results
for the six months to 31st March 2000 
 
 
  *  Sales increased by £1.8m in constant currency terms compared with same
     period last year 
 
  *  Two acquisitions successfully integrated 
 
  *  Profit before tax and exceptional items increased 20% 
 
  *  Earnings per share before exceptionals increased to 3.5p from 2.8p 
 
  *  Dividend per share held at 1.0p 
 
  *  Recovery phase of strategy on track 
 
  *  Gearing higher primarily due to growth of leasing company 
 
 
 
'During the last six months, we have made considerable progress in
implementing the strategy to re-build the Company's profitability. We are
taking steps not only to make the best of our manufacturing opportunities,
but also to develop a profitable future in other sectors of the Group which
offer more promise' 
 
Robert Wade, Chairman 
 
 
FULL STATEMENT BELOW

 
Enquiries: 
Chris Marsden, Chief Executive 
Malcolm Wilson, Finance Director         Fiona Tooley 
Leeds Group plc                          Citigate Dewe Rogerson Ltd 
Today: 0207 282 8000 (9.00am - 12.00pm)  0207 282 8000 
Thereafter: 01943 876222                 0121 631 2299
 
 

                            Leeds Group PLC
                            Interim Results
                  for the six months to 31st March 2000 
 
 
STATEMENT BY THE CHAIRMAN, ROBERT WADE 
During the last six months, we have made considerable progress in
implementing the strategy which the Board has developed to re-build the
Company's profitability. Sales for the first half increased by £1.8m in
constant currency terms when compared with the same period last year, and
this has led to an increase of 20% in profit before tax and exceptional
items. 
 
This performance is underpinned by investment in the areas that we have
identified for creating our future growth : 
 
 
* In the Continental distribution division a merchanting company in Germany,
  Hemmers GmbH, has been acquired at a cost of DM 11.0m including assumed debt,
  to complement Itex, our subsidiary in Holland. Their two management teams are
  already developing plans which will enhance the effectiveness of both
  operations. 
 
* Leeds Leasing has enjoyed a period of outstanding growth with new business
  120% ahead of last year, and the management team has been further
  strengthened to support our strategy of substantial organic growth in the
  next two years.
 
At the same time we have started the consolidation of our textile
manufacturing activities, concentrating on those areas where we can see both
profit and cash generation, and the realisation of other assets. The
complementary textile printing businesses of Calprina and Strines have been
merged on to one site to reduce overheads and improve efficiency. In
addition, Campo, our transfer printing business in Holland, which has been
the only unprofitable subsidiary during the last year, was sold in May to the
Management for Guilders 8m (£2.2m), plus a further Guilders 2m (£0.55m)
dependent on performance. 
 
Our UK dyeing division has produced a satisfactory result in difficult
conditions, and the dyehouse currently being commissioned at Galashiels will
enhance potential. The new management team at Nemesis has made a most
encouraging start, and additional investment has been authorised to increase
our wide printing capacity in Italy. Further changes will follow in our
textile divisions to take advantage of the changing opportunities to make
profits. 
 
Group debt at 31st March, which was largely in Euros, was £16.9m excluding
the proceeds of the Campo sale. The Group's gearing will increasingly reflect
the growth in finance lease debtors of Leeds Leasing, and by the year end
this is expected to represent more than 60% of our total debt. 
 
The exceptional item of £1.2m represents the cost of textile consolidation,
and there will be further costs in this category during the months ahead.
Against this, there will in due course be opportunities to sell properties
that are no longer required. 
 
An interim dividend of 1p per share, the same as last year, will be paid on
3rd July 2000 to shareholders on the Register on 16th June 2000. 
 
These continue to be very difficult days for textile manufacturing in the UK
and the effects are everywhere to be seen. Purchasing in Dollars and selling
in Euros has been a damaging combination at a time when the two currencies
have diverged by 25% over eighteen months. I am confident, however, that we
are taking steps not only to make the best of our manufacturing
opportunities, but also to develop a profitable future in other sectors of
the Group which offer more promise. 
 

Leeds Group PLC
Interim Results
for the six months to 31st March 2000 
 
 

                                                                              
                    Six months         Six months to         Twelve months to 
                           to        31st March 1999      30th September 1999 
                    31st March                 £'000                    £'000 
                         2000                                                 
                        £'000                                                 
Turnover from                                                               
continuing                                                                  
activities                                                                  
Existing               30,825                 34,834                   61,057 
activities                                                                  
Acquisitions            3,864                      -                        - 
                       34,689                 34,834                   61,057 
Cost of sales         (26,022)               (26,828)                 (46,997) 
                                                                              
Gross profit            8,667                  8,006                   14,060 
                                                                     
Distribution costs       (973)                  (645)                  (1,158) 
Administrative 
expenses               (6,705)                (5,596)                 (15,585) 
                                                                             
                                                                            
Operating profit/
(loss)                                                  
  Existing activities   1,880                  2,017                   3,514 
  Acquisitions            342                      -                       - 
                        2,222                  2,017                   3,514 
  Exceptional items    (1,233)                  (252)                 (6,197) 
                          989                  1,765                  (2,683) 
                                                                        
Termination of a 
business operation          -                 (1,184)                 (1,384) 
Profit/(loss) 
before interest           989                    581                  (4,067) 
Net interest payable     (289)                  (401)                   (631) 
Profit/(loss) before 
taxation                  700                    180                  (4,698) 
                                                           
Taxation                 (251)                  (147)                   (440) 
Profit/(loss) 
after taxation            449                     33                  (5,138) 
                                                                              
Dividends                (366)                  (366)                 (1,098) 
Transfer to/(from)   
reserves                   83                   (333)                 (6,236)   
                                                   
                                                                              
Earnings/loss) per 
  share before 
  exceptional items       3.5p                  2.8p                    4.7p 
  exceptional items      (2.3p)                (2.7p)                 (23.4p) 
  after exceptional 
  items                   1.2p                  0.1p                  (18.7p) 
                                                                              
  Dividend per share      1.0p                  1.0p                    3.0p 



Leeds Group PLC
Interim Results
GROUP BALANCE SHEET

                                                                              
                    31st March       31st March 1999      30th September 1999 
                         2000                  £'000                    £'000 
                        £'000                                                 
  Tangible fixed       26,282                 34,137                   27,243 
  assets                                                                      
  Intangible            1,261                      -                        - 
  fixed assets                                                                
  Stocks               10,583                  7,417                    6,965 
  Debtors              21,018                 21,698                   15,575 
  Finance lease         8,840                  5,501                    6,329 
  debtors                                                                     
  Cash at bank          1,154                  2,185                    2,809 
  and in hand                                                                 
  Creditors:          (29,568)               (23,513)                 (16,524) 
  amounts                                                                     
  falling due                                                                 
  within one                                                                  
  year                                                                        
                                                                              
  Net current          12,027                 13,288                   15,154 
  assets                                                                      
  of which:                                                                   
  due within one        7,279                 10,646                   12,163 
  year                                                                        
  due after more        4,748                  2,642                    2,991 
  than one year                                                               
                                                                              
  Total assets         39,570                 47,425                   42,397 
  less current                                                                
  liabilities                                                                 
                                                                              
  Creditors: amounts 
  falling due after
  more than one year   (3,526)                (3,772)                  (5,489)  
                                                             
  Provisions for 
  liabilities and 
  charges              (1,586)                (1,666)                  (1,740) 
                                                                              
  Deferred income         (36)                  (497)                     (20) 
                       34,422                 41,490                   35,148 
                                                                              
  Share capital and 
  reserves:                                                 
  Share capital         9,150                  9,150                    9,150 
  Share premium        15,832                 15,832                   15,832 
  Profit and loss 
  account               9,440                 16,508                   10,166 
                       34,422                 41,490                   35,148 
                                                                               
  Reconciliation of 
  movements in 
  shareholders' funds:                                                     
  Result for the period    83                   (333)                  (6,236) 
                                                                 
  Exchange differences   (809)                  (405)                    (844) 
                                                                          
  Net transfer from 
  shareholders' funds    (726)                  (738)                  (7,080) 
                                                                              
  Shareholders' funds 
  at beginning of the  35,148                 42,228                   42,228 
  period                                                                      
                                                                              
  Shareholders' funds 
  at end of the 
  period               34,422                 41,490                   35,148


 
Leeds Group PLC
Interim Results
GROUP CASH FLOW STATEMENT
for the six months to 31st March 2000 

                                                                              
                       Six months to         Six months to      Twelve months
                          31st March       31st March 1999                 to 
                                2000                 £'000               30th
                               £'000                                September
                                                                         1999 
                                                                        £'000 
  Net cash                                    
  (outflow)/inflow from                                                       
  operating activities   (3,791)               4,253                   11,193   
                                                 
  Returns on investments 
  and servicing of         (291)                (411)                    (642) 
  finance                                                                     

  Taxation                 (228)                (405)                  (1,660) 

  Capital expenditure 
  and financial          (1,181)              (1,575)                  (2,963) 
  investment                                                                  
                                                                           
  Acquisitions 
 (net of cash and cash 
  equivalents)           (2,778)                   -                        - 
                                                                   
  Equity dividends paid    (732)              (1,683)                  (2,050) 
                                                                         
  Net cash (outflow)/
  inflow                 (9,001)                 179                    3,878 

  Translation difference    687                  310                      654 
                                                                         
  Loan acquired with 
  subsidiary             (1,079)                   -                        - 
                                                                         
  Movement in net debt   (9,393)                 489                    4,532 
                                                                             
  Net debt at beginning 
  of the period          (7,503)             (12,035)                 (12,035) 
                                                                             
  Net debt at the end 
  of the period         (16,896)             (11,546)                  (7,503) 
                                                                     
                                                                     
                                                                     
                         Leasing            Textiles                    Total 
                           £'000               £'000                    £'000 
  As at 31 March 2000                                        
                                                                     
  Trading capital 
  employed                7,884               43,434                   51,318 
                                                                       
  Interest bearing 
  net debt               (6,845)             (10,051)                 (16,896) 
                                                                              
  Net assets              1,039               33,383                   34,422 
                                                                              
  Net debt as a 
  percentage of trading
  capital employed        86.8%                23.1%                     32.9%



Leeds Group PLC
Interim Results
NOTES TO THE INTERIM STATEMENT
for the six months to 31st March 2000 

 
1.  The interim results which are not audited have been prepared on the
basis of the accounting policies set out in the 1999 Annual Report. The
figures for the year ended 30th September 1999 have been abridged from the
Group's full accounts which have been filed with the Registrar of Companies
and on which the Company's auditors gave an unqualified report. 
 
2.  The Company purchased the trade and net assets of Hemmers GmbH in
December 1999. It also purchased the trade and certain assets of Calprina Ltd
in October 1999. The results of these two acquisitions are shown separately
on the face of the profit and loss account. 
 
3.  The exceptional item of £1.233m relates to costs associated with the
restructuring of the UK printing division. 
 
4.  Earnings per share have been calculated on an average of 36,598,603
(1999: 36,598,603) ordinary shares of 25p in issue during the period. 
 
5.  The interim dividend is payable on 36,598,603 ordinary shares.