Positive Pittards ready for stronger 2021 after robust 2020
After spending 2020 “honing” and “reshaping” its business, leather producer and supplier Pittards talked Thursday of "acquitting itself robustly” last year and has now “entered 2021 stronger, with a more diverse and flexible business”.
Positive words indeed from its chairman Stephen Yapp as the company’s “resilience” was reflected in its partially-positive results for the year ended 31 December 2020.
Those highlights included a break-even second half together with a return to positive core earnings in H2. Cash flow also improved “significantly” (by £2.3 million), helped by inventory reduction, and optimising operations.
But, as we’ve come to expect, the picture wasn’t all black ink in its financial report. Well-documented pandemic disruptions for most ensured Pittards’ sales suffered, particularly in the first half, as “continued weak global demand for leather and related goods” hit full-year revenue, falling to £15.2 million from £22.3 million in 2019. However, the H2 picture was brighter with revenues dipping to a more modest £8.6 million from £10.2 million in the year-ago period.
Meanwhile, gross profit for the year fell to £3.2 million from £6.9 million last time and gross margin slipped to 21% from 31% in 2019. Pre-tax loss came in at £3.2 million compared to a £0.6 million gain the previous year while it recorded an EBITDA loss of £1.1 million against a £2 million gain previously.
But there were also more positives in the report, including an order book that opened 2021 stronger than at the start of the previous two years, and underlying margins that improved on 2019.
Other key measures included developing its relationships in the interiors market and further establishing itself as a shoe manufacturer in Ethiopia. It said both now remain priority development markets for the group, where sales grew to 22% of total, up from 18% in 2019, on a like for like basis.
On its outlook, Yapp added: "We have entered 2021 stronger, with a more diverse and flexible business, ready to take full advantage of opportunities in our markets".
He added: “It remains too early to judge how strong the recovery will be, but on balance, we see more reason to be positive that we can make further progress to build on the momentum of the second half of last year, starting the year with stronger demand from customers.
“Our reshaped business is more agile and set for growth and the creation of longer-term value… ready to take full advantage of opportunities in our markets”.
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