Pittards sales dip but leather specialists is upbeat, despite tough conditions
today Apr 2, 2019
British leather specialist Pittards reported its 2018 results on Tuesday and said that revenue fell to £28.5 million from £30.3 million a year earlier in a tough environment.
The company, which sells its own high-end bags and gloves, as well as being a key leather supplier, said pre-tax profit was flat at just £0.4 million but Ebitda edged up to £1.8 million from £1.6 million and gross profit moved up to £7.2 million from £7.1 million.
It may not look too impressive, but chairman Stephen Yapp talked of “good progress” having been made "in implementing the group's stated objectives.” And although he warned that the company needs to be “mindful of the unpredictable global economic situation,” the firm is “well positioned for growth with clear priorities, a stable financial base and a positive outlook about our near-term opportunities.”
It said that even with the challenges it faced last year, it “delivered results for 2018 in line with market expectations.”
Specifically, those challenges were a "global economic climate [that] was subdued during 2018 with overall weaker demand. Demand for shoe leather was lower reflecting global trends in this market.”
The company also said that the “overall global economic climate remains complex. There continues to be speculation around the impact of Brexit and general trading conditions in Europe,” but “the uncertainty regarding the trading relationship between the US and China has a greater impact on the global leather industry.”
In order to deal with these issues, Pittards said it needs to evolve. “The group's strategy recognises that most of its current, core customers operate in niche market sectors and [it] has long-established, excellent relationships within these sectors,” it said.
"The established customer base is very important for long-term success, but growth opportunities are limited in these niche markets. In order to build medium and long-term growth into the business, [it] needs to develop into new market sectors. The growth strategy for the UK business is predominantly targeted upon increasing leather sales, both to the whole hide interiors markets, embracing automotive, airline and others, together with a new emphasis upon larger shoe leather brands.”
For its Ethiopian business, the strategy is to focus on the development of finished product manufacture, in particular shoes and gloves. The division has increased its manufacturing capabilities for footwear by investing in people and machinery. Consequently, “the division has expanded its product offering and volumes and become established as a reliable resource for these finished products.” It said this “strategically significant development further diversifies the business model with customers including Soul of Africa, Vivo Barefoot, and in 2019 another niche brand is planned.”
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