Leeds Group foresees FY pre-tax profit down on 2016

In the 12 months to 31 May, 2016, the company posted a pre-tax profit of £1.51m, down from £1.57m in the 2015 year.

The fabric and haberdashery wholesaler cited a below-expectations trading performance of operating subsidiaries in the second half, with the restructuring taking longer than expected.

Leeds said that, as noted in it interim report, the trading performance at its operating subsidiaries was lower than expectations in the first half.

At that time, it said the overall performance of the group was higher than the previous year due to foreign exchange gains.

"The Company had identified that performance was constrained by a shortage of double folding capacity which reduced our ability to service our customers as quickly as they required.

"We responded to this with a significant capital expenditure programme which eliminated the need for third party double folding and warehousing, bringing them inhouse to enlarged properties owned by the Hemmers business."

Directors were confident the restructured business was positioned to deliver future growth.

At 10:17 BST, shares in AIM-quoted Leeds Group were down 11.25% to 35.5p each.