Pittards profits leathered by Ethiopia tax

published 19 September 2012

Leather goods firm Pittards said it had succeeded in breaking even in the first half after being hit by export taxes imposed by the Ethiopian government.

Exports from Ethiopia represent 93% of the company's sales and the government there has put a 150% tariff on crust leather exports.

Despite this, Chairman Stephen Boyd said the firm's "commitment to accelerate the realisation of the benefits from manufacturing more products in a low cost economy remains strong".

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

The firm also said raw material prices had remained stubbornly high at its tannery in Ethiopia but there were signs of prices easing which should contribute to improved gross margins in the second half.

Revenue dropped to £18.3m in the first half, compared to £20.3m the year before.

There were no profits, but Pittards avoided making a loss. This compared with a £1.1m profit the previous year.

Boyd said work to restructure the company's balance sheet to enable the payment of a dividend was progressing well.

"We expect to give notice of a general meeting to seek approval for this change shortly," he said.

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.