Despite losing nearly half its sales and posting a net loss in the first half six months of the year, Pittards sees “more opportunity than risk in the new normal that is emerging.”
The British leather and leathergoods manufacturer, which owns the brand Daines & Hathaway, suffered a 45 percent drop in sales to £6.6 million (€7.3m-$8.6m) due to the impact of the Covid-19 pandemic.
The gross margin narrowed to 17.1 percent from 29.7 percent. The company posted a first-half net loss of £2.4 million (€2.6m-$3.1m) compared with a net profit of £0.2 million (€0.22m-$0.26m).
The chief executive Reg Hankey said that there are “clear signs” of a modest recovery in sales revenue during the third quarter, along with a progressively improving order book. “We are cautiously optimistic that the positive trend since May will continue for the remainder of the year, however, it remains too early to judge the sustainability and scale of further recovery,” he added.
The company is encouraged by the cash generation since the half year and the corresponding reduction in net debt. “We anticipate a more agile, cash generative business model, as we head towards the end of the year,” Hankey stressed.
At the end of June, net debt stood at £11.3 million, (€12.5m-$14.7m) up from £9.9 million at the end of 2019. The company started reducing its net debt from May and by August it reached £10.9 million (€12.0m-$14.1m).