In line with market expectations, UK leathermaker Pittards has posted a 50% fall in pre-tax profits for the full year 2003, to £1 million ($1.82 million).

The company attributed the decline to a combination of factors, the main ones being overcapacity in the industry leading to heightened competition, the weakness of the dollar and a sharp rise in the company’s pension costs which rose 60% to £2.1 million.  Sales turnover was up from £78.9 million to £85.4 million.

“The difficult trading conditions and the weakness of the dollar have continued

into the early part of 2004,” commented chairman Robert Tomkinson. “Some of our customers have been destocking in response to lower demand and this has resulted in some short time working. Although we have made a disappointing start to the year, with all three of our operating divisions currently trading at a loss, the order book is recovering steadily from a low point reached in November last year.

“In the short term, an improvement in our performance will come primarily from

higher volumes, increases in operating efficiency and higher dollar prices,

albeit in a fiercely competitive market.  For the longer term, we are continuing

to invest in product and market development, in more efficient and productive

plant and in value adding systems.  This will enable us to continue to meet the

needs of our established customers, the international brands, and also those of

the rapidly developing emergent brands in South East Asia.  Nevertheless, the

unstable global economic climate and the increased volatility of exchange rates

indicate that the current year will be challenging for us, particularly in the

first half.”

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