Leeds Group jumped 21% as it agreed to sell loss-making subsidiary, Hemmers-Itex Textil to a subsidiary of Dutch group Nooteboom for £657,000 in cash based on net assets.
Leeds will retain three properties currently owned by Hemmers which have an aggregate net book value of £5.2m
Hemmers has been loss-making for several years, said Leeds, with a deficit of £793,000 in the year to May 2023 on sales of £24.3m.
Leeds added Hemmers would be better served as part of a larger organisation reflecting the general consolidation that is taking place in the textile market and thereby offering economies of scale.
Once the sale is completed, Leeds will no longer have a trading business and become a cash shell under AIM rules.