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Airea PLC   -  AIEA   

Interim report for the six months ended 30 June 19

Released 07:00 02-Aug-2019

RNS Number : 6405H
Airea PLC
02 August 2019
 

AIREA PLC 

(the "Group")

 

Interim report for the six months ended 30 June 2019

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

Chairman's Statement

The six months ended 30 June 2019 continued the strategic progress made in recent periods; however, high levels of market uncertainty within the economy resulted in tougher market conditions during the second quarter slowing the Group's financial performance.   

Despite strong growth in the order book and increased sales internationally, revenue and operating profit are below the corresponding period driven by the uncertainty in the market and the economic environment. This affected the timing of customer call offs within the order book and the Group's decision to increase inventory to prepare for potential Brexit challenges, had the UK left the EU on 31 March 2019, had a significant financial impact on operating profit and cash flow.

These challenges have not held back our strategic development with further strengthening of the sales and design teams. In addition the Group has taken the opportunity to invest in the infrastructure of the business with new on site storage facilities and a new finance and operating system to be put in place by the fourth quarter increasing our operational capabilities.

Group Results

Revenue for the period was £8.9m (2018: £9.1m). The operating profit was £1,085,000 (2018: £1,481,000). After charging pension related finance costs of £143,000 (2018: £158,000) and incorporating the appropriate tax charge the net profit for the period was £935,000 (2018: £955,000). Basic earnings per share were 2.26p (2018: 2.31p).

There were no losses and related costs for the discontinued Ryalux business (2018: £359,000 loss). 

Operating cash flows before exceptional items and movements in working capital were £1.3m (2018: £1.7m). Working capital increased in the period by £0.8m (2018: £0.5m) mainly as a result of the timing of stock build. Contributions to the defined benefit pension scheme were £200,000 (2018: £200,000) in line with the agreement reached with the scheme trustees following the last triennial valuation as at 1 July 2017. Capital expenditure of £236,000 (2018: £61,000) was made in renovating additional storage facilities, renewing and enhancing manufacturing plant and equipment and supporting product launches. 

Outlook

Although disappointed with the sales performance during the last six weeks of the first half we are pleased by the progress made during the period improving the foundations of the Group.  Sales growth will continue to be challenging given the uncertainty that remains whilst awaiting the outcome of Brexit negotiations; however, as a UK manufacturer with a strong position in the UK and internationally and an ever increasing product portfolio, we are well placed to moderate these risks and take advantage of growth opportunities as they arise. 

Given the financial performance of the Group and resulting cash flow we are pleased to be able to maintain the policy introduced in 2017 of paying an interim dividend of 0.8p (2018: 1.75p) to be paid on the 24 October 2019 to shareholders on the register at close of business on 20 September 2019.  The ex-dividend date is 19 September 2019.

 

Martin Toogood

Chairman

2 August 2019

 

 

 

Unaudited

Audited

 

6 months ended

6 months ended

 

30 June

30 June


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

6 months ended

6 months ended


12 months ended

 

30 June



31 December

 

2018



2018

 

£000



£000

 





 

955



2,008

 

-



(1,284)

 

-



218

 

-



(1,066)

 

39 



78

 

-



(13)

 

39



65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

BASIS OF PREPARATION AND ACCOUNTING POLICIES





The financial information for the six months ended 30 June 2019 and the six months ended 30 June 2018 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 31st December 2018 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 period ended 31st December 2018.  These policies are set out in the annual report and accounts for the period ended 31st December 2018 which is available on the Company's website at 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

 

 

2      DISCONTINUED OPERATIONS




The residential carpets business was closed during 2018 with the below analysis for comparative purposes with no additional costs incurred during the current period.

 


 


 

 

 

 

 

Discontinued operations

 

 

Revenue

 

Operating costs

 

Loss before taxation

 

Taxation

 

Loss attributable to shareholders of the group from discontinued operations

 

 

Enquiries:

 

Neil Rylance

01924 266561

Chief Executive Officer




Paul Stevenson

01924 266561

Group Finance Director




Peter Steel / Ben Farrow

020 7496 3000

N+1 Singer


 

 

 

 

 

 


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Interim report for the six months ended 30 June 19 - RNS