Pittards PLC slumps to loss but demand starts to recover
The firm achieved positive underlying earnings in the second half but it is too early to predict the pace of recovery
() slumped to a full-year loss but said 2021 started with stronger demand from customers.
However, the specialist producer of technically advanced leather and luxury leather goods added it is too early to judge how strong the recovery will be, though it remains optimistic.
The order book this year opened stronger than the start of the previous two years, while the company is receiving repeat orders from both interiors and big shoe markets.
After investing £1.2mln in machinery to improve efficiency last year, the company plans another £900,000 investment this year as it anticipates growth in new markets.
As a result of Coronavirus (COVID-19), the group’s retail venues were forced to close and it decided not to renew the lease at Clarks Village in Somerset, so it will focus more on digital channels.
In the year to December 31, revenue tumbled 32% to £15mln while the firm slumped to a £2.3mln loss before tax from a £600,000 profit in 2019. Net debt at the end of the period was a touch higher at £10mln.
Performance was hit by weak global demand for leather and related goods in the first half as sales demand became more fragmented.
However, Pittards broke even and returned to positive underlying earnings during the second half of 2020, while cash flow also improved “significantly”.
To cope with the crisis, the manufacturer cut jobs to 1,096 from 1,224 at the end of December 2019, which helped reduce the total cost base by £2mln.
Shares dipped 1% to 48.45p early on Wednesday.
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