Leather goods retailer Pittards reported a drop in full year profit, after it was hit by a spike in hide and skin prices, but it remains confident its core strategy will lead to improved performance in the near future.
Pre-tax profit, before restructuring costs, fell to £0.3m for the year ended December 31st 2012 from £2.8m the year before.
Profits were hit by a "significant global increase in hide and skin prices over the previous year, including Ethiopian sheepskins, which adversely impacted gross margins," the group explained.
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The group added that prices did progressively ease back in the second half, giving its second hand performance a boost.
Revenue for the year slipped to £37.0m from £38.2m previously.
Chairman Stephen Boyd commented: "2012 proved to be a year of transition following the major structural changes to the business as we moved more of our core manufacturing to a lower cost location."
"This was accelerated by the introduction of the crust tariff in Ethiopia in late 2011 and the necessary speed of change, coupled with changes to the Ethiopian customs system (which delayed receipt of key chemicals), presented a number of challenges. These were however overcome with commitment and determination and the benefits will accrue during 2013 and beyond."
Commenting on the trading outlook, Pittards noted that global economic uncertainty remains a concern for all businesses. However it said it is confident that its advance into new markets will stand it in good stead.
"With trading in the current year to date in line with management expectations, we are optimistic that our core strategy will lead to improved performance in the near future," Pittards said.
CJ
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