Pittards trades into the black
In contrast to the previous year’s loss of £80,000 ($125,000), UK leathermaker Pittards was today able to post a gross profit of £750,000 for the first half ended June 30 2002. After deductions, net earnings for the six-month period were £392,000 or 1.9p per ordinary share, as opposed to a 0.1p loss the year before.
Robert Tomkinson, chairman of Pittards referred to the results as being "the first stage of our recovery."
Though sales were up 8% by volume, they were reduced in revenue terms from £45.1 million to £36.2 million, largely on the back of an easing in hide and skin prices as the effects of foot and mouth outbreak tailed off. Of total sales, a record 83% went to customers outside the UK.
Sales turnover in the Glove Leather division was 6% up by volume – the same as the year before. An improvement in sales to sporting applications was also seen, due to old and new business connections being renewed and established. After a steady rise in prices throughout 2001 - a greater stability was noted in the cost of the division’s principal raw material of hair sheepskins.
The Shoe and Leathergoods division fared less well, suffering a 25% decline in value terms (18% by volume). Sales of performance leather for sporting applications were also down on the equivalent period but well ahead of the second half of 2001, and it was anticipated that recent new business gains would continue the trend. Weak sales of upper leather meanwhile reflected the wider softness in the retail market for casual footwear.
The company’s third major division, Raw Materials, made a ‘modest contribution’ to operating profits, in spite of the reduced availability and quality of UK sheepskins brought about by the UK foot and mouth outbreak. However, the ongoing cost of maintaining security at the company’s sheepskin and hide processing facility, closed in December 2001, and pursuing the site’s redevelopment meant the division’s contribution was reduced to break even.
Commented Robert Tomkinson: "Although the substantial fall in equity markets around the world is dampening consumer confidence and spending in many of our markets, demand for our products remains strong, largely as a result of important new business gains. Our recent efforts to broaden our product and customer base are reducing our dependence on any single market segment, raw material type or currency. Despite the generally uncertain international economic outlook, we expect to report further progress during the second half of the year."
