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Airea PLC  -  AIEA   

Interim report

Released 07:00 27-Sep-2017

RNS Number : 8939R
Airea PLC
27 September 2017
 

 

AIREA PLC

 

Interim report for the twelve months ended 30 June 2017

 

The principal activity of the group is the manufacturing, marketing and distribution of floor coverings.

Chairman's Statement

It is pleasing to report improved earnings for the twelve months ending 30th June 2017 and continuing strengthening of our competitive position despite challenging trading conditions.

-    Profit before tax up 8.3%

-    Basic earnings per share up 14.3%

-    Interim dividend introduced

As indicated in the six month review in February, we were seeing signs of increases in commodity prices.  The second six months of the current accounting period has seen further margin pressure in both the contract and residential flooring market, and we are working hard to manage margins.

New product launches were well received in the UK contract sector, however market conditions worsened through the period as a combination of further public sector cut backs and ongoing economic and political uncertainty weighed on demand.       

Recent product launches and new routes to market led to sales growth in the residential sector.

Exports continued to grow steadily in the period as the improved exchange rate restored competitiveness and new markets came on stream.

The site consolidation is now fully complete and delivering both significant cost savings as well as improved service levels and reduced waste. We remain in negotiations over our remaining leasehold property. 

Group Results

Revenue for the period was £23.9m (2016: £24.6m).  The operating profit was £2,121,000 (2016: £2,042,000).   After charging pension related finance costs of £614,000 (2016: £651,000) and incorporating the appropriate tax charge the net profit for the period was £1,423,000 (2016 £1,277,000). Basic earnings per share were 3.44p (2016 3.01p)

Operating cash flows before exceptional items and movements in working capital were £2.8m (2016: £2.8m).  Working capital increased in the period by £2.0m as a result of stock build for successful product launches. Contributions to the defined benefit pension scheme were £400,000 (2016: £400,000) in line with the agreement reached with the scheme trustees following the last triennial valuation as at 1st July 2014.  Capital expenditure of £1,280,000 (2016: £704,000) was made in renewing and enhancing manufacturing plant and equipment. 

The increase in the pension deficit of £277,000 resulted from a deterioration in corporate bond yields.  It is an accounting standards requirement that the reported pension valuation is based on corporate bond yields even though this does not reflect the investment strategy of the plan.  In reality the plan is now largely hedged against interest rate movements and inflation, which, combined with a diversified growth asset base, continues to produce an improved underlying position.   

 

 

Outlook

We are encouraged by the reaction to our new products from both domestic and overseas customers, continue to benefit from our reduced cost base and remain committed to bringing competitively priced products with high design content to market. This will hold us in good stead as we anticipate ongoing uncertainty of demand in all the markets that we serve. 

As previously announced we are in an eighteen month accounting period and this second interim report is unusual in covering a twelve month period.  We stated in our last announcement that we would look to introduce an interim dividend, which is particularly relevant in the transition to our new accounting period end. Given the ongoing improvement in the financial performance of the group and a robust cash flow we are able to declare an interim dividend of 1.75p to be paid on the 23rd of November 2017 to shareholders on the register at close of business on 13th October 2017.  The ex dividend date is 12th October 2017.

Martin Toogood

Chairman

26th September 2017  

Enquiries:

Neil Rylance                                                                                                                  01924 266561

Chief Executive Officer

 

Roger Salt                                                                                                                     01924 266561

Group Finance Director

 

Richard Lindley                                                                                                              0113 388 4789

N+1 Singer

 

 

 

 

 


Consolidated Income Statement








 


12 months ended 30th June 2017








 




Unaudited 

Audited





 




12 months ended

year ended





 




30th June

30th June





 




2017

2016





 




£000

£000





 










 


Revenue


23,894

24,577





 


Operating costs


(21,773)

(22,535)





 


Operating profit before exceptional items


2,121

2,013





 


Exceptional items:








 


Exceptional costs


-

(1,271)





 


Pension credit


-

1,300





 


Operating profit


2,121

2,042





 


Finance income


-

-





 


Finance costs


(614)

(651)





 


Profit before taxation


1,507

1,391





 


Taxation


(84)

(114)





 


Profit attributable to shareholders of the group


1,423

1,277





 










 


Earnings per share (basic and diluted)


3.44p

3.01p





 










 


All amounts relate to continuing operations








 










 


Consolidated Statement of Comprehensive Income






 


12 months ended 30th June 2017








 




Unaudited 

Audited





 




12 months ended

year ended





 




30th June

30th June





 




2017

2016





 




£000

£000





 


Profit attributable to shareholders of the group


1,423

1,277





 










 


Actuarial loss recognised in the pension scheme


(79)

(291)





 


Related deferred taxation


16

(83)





 




(63)

(374)





 


Unrealised valuation gain


-

3,009





 


Related deferred taxation


-

(240)





 




-

2,769





 


Total comprehensive income attributable to shareholders of the group


1,360

3,672





 










 










 


Consolidated Balance Sheet








 


as at 30th June 2017


Unaudited

Audited





 




30th June

30th June





 




2017

2016





 




£000

£000





 


Non-current assets








 


Property, plant and equipment


6,101

5,489





 


Investment property


2,701

2,701





 


Deferred tax asset


1,281

1,264





 




10,083

9,454





 


Current assets








 


Inventories


11,146

9,338





 


Trade and other receivables


4,704

4,601





 


Cash and cash equivalents


2,302

3,114





 




18,152

17,053





 


Total assets


28,235

26,507





 


Current liabilities








 


Trade and other payables


(5,574)

(5,505)





 


Provisions


-

(125)





 




(5,574)

(5,630)





 


Non-current liabilities








 


Obligation under finance leases


(767)

-





 


Pension deficit


(6,962)

(6,685)





 


Deferred tax


(241)

(241)





 




(7,970)

(6,926)





 


Total liabilities


(13,544)

(12,556)





 




14,691

13,951





 


Equity








 


Called up share capital


10,339

10,339





 


Share premium account


504

504





 


Capital redemption reserve


3,617

3,617





 


Revaluation reserve


3,009

3,009





 


Retained earnings


(2,778)

(3,518)





 




14,691

13,951





 










 










 










 










 










 










 










 










 










 










 


Consolidated Cash Flow Statement








 


12 months ended 30th June 2017


Unaudited 

Audited





 




12 months ended

year ended





 




30th June

30th June





 




2017

2016





 




£000

£000





 


Cash flow from operating activities








 


Profit attributable to shareholders of the group


1,423

1,277





 


Tax charged


84

114





 


Finance costs


614

651





 


Depreciation


668

837





 


Profit on disposal of property plant and equipment


-

(6)





 


Pension credit


-

(1,300)





 


Inventory impairment


-

468





 


Operating cash flows before exceptional items & movements in working capital


2,789

2,041





 


(Increase) / Decrease in inventories


(1,808)

841





 


Increase in trade and other receivables


(103)

(189)





 


(Decrease) / increase in trade and other payables


(68)

232





 


(Decrease) / Increase in provisions for liabilities and charges


(125)

125





 


Cash generated from operations


685

3,050





 


Income tax received


52

61





 


Contributions to defined benefit pension scheme


(400)

(400)





 


Net cash generated from operations


337

2,711





 










 


Investing activities








 


Purchase of property, plant and equipment


(1,280)

(704)





 


Proceeds on disposal of property, plant and equipment


-

25





 




(1,280)

(679)





 


Financing activities








 


Interest


(16)

-





 


Obligations under finance leases


767

-





 


Share repurchase


-

(410)





 


Equity dividends paid


(620)

(391)





 




131

(801)





 


Net (decrease) / increase in cash and cash equivalents


(812)

1,231





 


Cash and cash equivalents at start of period


3,114

1,883





 


Cash and cash equivalents at end of period


2,302

3,114





 










 










 










 










 










 











 


Consolidated Statement of Changes in Equity







 


12 months ended 30th June 2017









 




Share capital

Share premium account

Capital redemption reserve

Revaluation reserve

Profit and loss account

Total equity


 




£000

£000

£000

£000

£000

£000


 











 


At 1st July 2015


10,851

504

3,105

-

(3,380)

11,080


 


Comprehensive income for the period









 


Profit for the period


-

-

-

-

1,277

1,277


 


Other comprehensive income for the period


-

-

-

3,009

(614)

2,395


 




-

-

-

3,009

663

3,672


 


Contributions by and distributions to owners









 


Share repurchase


(512)


512

-

-

-


 


Consideration paid on share purchase


-

-

-

-

(410)

(410)


 


Dividend Paid


-

-

-

-

(391)

(391)


 


At 30th June and 1st July 2016


10,339

504

3,617

3,009

(3,518)

13,951


 


Comprehensive income for the period









 


Profit for the year


-

-

-

-

1,423

1,423


 


Other comprehensive income for the year


-

-

-

-

(63)

(63)


 




-

-

-

-

1,360

1,360


 


Contributions by and distributions to owners









 


Dividend Paid


-

-

-

-

(620)

(620)


 


At 30th June 2017


10,339

504

3,617

3,009

(2,778)

14,691


 











 











 











 











 











 











 











 











 











 











 











 











 











 











 











 











 











 











 











 











 











 











 


Note









 


BASIS OF PREPARATION AND ACCOUNTING POLICIES







 











 


The financial information for the  twelve month periods ended 30th June 2017 has not been audited and does not constitute full financial statements within the meaning of Section 434 of the Companies Act 2006.  


The financial information relating to the year ended 30th June 2016 does not constitute full financial statements within the meaning of Section 434 of the Companies Act 2006. This information is based on the group's statutory accounts for that period. The statutory accounts were prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") and received an unqualified audit report and did not contain statements under Section 498(2) or (3) of the Companies Act 2006. These financial statements have been filed with the Registrar of Companies.

These interim financial statements have been prepared using the recognition and measurement principles of International Financial Reporting Standards as adopted by the European Union ("IFRS").  The accounting policies used are the same as those used in preparing the financial statements for the year ended 30th June 2016.  These policies are set out in the annual report and accounts for the year ended 30th June 2016 which is available on the company's website www.aireaplc.co.uk.

 

Further copies of this report are available from the Company Secretary at the registered office at Victoria Mills, The Green, Ossett, Wakefield, West Yorkshire WF5 0AN and are also available, along with this announcement, on the company's website at www.aireaplc.co.uk


 















 


 

 


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Interim report - RNS