Leeds Group's Covid woes continue, short-term outlook "remains difficult"
Covid-19 is still an issue for Leeds Group. The UK-based fabrics and haberdashery wholesaler and retailer’s half-year to 23 November 2021 saw it continuing to struggle.
And hopes "there would be a gradual return to more normal trading levels” have been dashed, especially at its key Hemmers and KMR Germany operations.
"The prolonged nature of the pandemic, exacerbated by the emergence of the Omicron variant in late November, has impacted consumer confidence and caused many our customers to become overstocked and reduce demand while they correct that position”, the company said in its trading update Monday.
Although it noted that there have been no further country-wide lockdowns in Germany, its government and their European counterparts have introduced restrictions to curb the spread of the Omicron variant “which directly impact retail operations”.
Sales at Hemmers and KMR have consequently dipped by 19% and 33% respectively, compared to the previous year, “which is consistent with reductions being reported by competitors in our sector”.
So what has that meant for the Leeds Group trading performance? Group turnover in the first six months fell go £15.6 million from £19.95 million as year ago. Hemmers turnover fell to £12.67 million from £15.6 million last time, while KMR’s turnover dipped to £2.9 million from £4.36 million.
The group also made a six-month pre-tax loss of £487,000 compared to a profit of £735,000 in the year-ago period. Hemmers reported a loss of £192,000 against a profit of £729,000 last time and KMR reported a loss of £242,000 from a profit of £145,000.
Net debt stood at £5.87 million as at 30 November 2021, up from £4 million a year ago, “due to the reduced level of trading and seasonal increased stock levels”, it noted, adding: "Management will take further action in the second half of the year to reduce costs further and will also apply for further government financial support”.
Chairman Jan G Holmstrom said of its predicament: “The short-term business outlook remains difficult to predict because of the prolonged nature of the pandemic with new variants continuing to emerge. In the medium term, we assume that increased immunity amongst the population will enable a return to more normal trading levels and profitability.”
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