TIDMAIEA
RNS Number : 3748X
Airea PLC
21 February 2017
AIREA PLC
Interim report for the six months ended 31 December 2016
The principal activity of the group is the manufacturing,
marketing and distribution of floor coverings.
Chairman's Statement
Airea is pleased to report earnings are significantly ahead of
the corresponding period.
- Operating profit up 51%
- Basic earnings per share up 76%
- EBITDA up 28%
New product launches targeted at the residential market have
driven growth in this sector. On the contract side however, delays
in projects led to a slow down in growth and as indicated in the
annual report sales in the Euro zone took some time to recover.
Exports grew steadily in the period and we are seeing sales ahead
of last year as we enter the second six months of the accounting
period.
Investment in new technology during the second half of the last
financial year will facilitate the further extension of our product
range with several new designs currently being finalised for
launch.
The site consolidation exercise is largely complete with
discussions concerning our last leasehold operation in Wakefield
reaching an advanced stage. The business continues to reap the
benefits of shorter lead times, cost synergies and reduced
waste.
Group Results
Revenue for the period was GBP12.8m (2015: GBP12.7m). The
operating profit was GBP1,149,000 (2015: GBP759,000).
After charging pension related finance costs of GBP305,000
(2015: GBP246,000) and incorporating the appropriate tax charge the
net profit for the period was GBP696,000 (2015: GBP372,000). Basic
earnings per share were 1.51p (2015: 0.86p)
Operating cash flows before exceptional items and movements in
working capital were GBP1.5m (2015: GBP1.1m). Working capital
increased in the period by GBP1.2m mainly as a result of timing of
payments to trade creditors. Contributions to the defined benefit
pension scheme were GBP200,000 (2015: GBP200,000) in line with the
agreement reached with the scheme trustees following the last
triennial valuation as at 1(st) July 2014. Capital expenditure of
GBP1,009,000 (2015: GBP518,000) was made in renewing and enhancing
manufacturing plant and equipment.
The increase in the pension deficit of GBP579,000 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, has produced an
improved underlying position.
Outlook
Recent experience suggests that current exchange rate conditions
will, in overall terms, prove to be beneficial for the company but
in recent months there has been significant input price pressure
resulting from commodity price rises. It is therefore difficult at
this point in time to predict the longer term effect on our
competitive position. As ever our margins remain the subject of
careful management as we look to exploit any advantage.
Of far greater concern is the medium to long term impact of
economic uncertainty on market demand. Our position is not unique
of course but there has been a notable increase in volatility in an
already cyclical market.
The Board intends to maintain the recent pattern of dividend
payments, and taking into consideration the changes in accounting
period announced in December, will determine the level of interim
dividend on the basis of the twelve month period ended 30 June
2017. Therefore there will not be a dividend payment at this
interim stage.
Martin Toogood
Chairman
20th February 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
6 months ended 31st
December 2016
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
31st 31st 30th
December December June
2016 2015 2016
GBP000 GBP000 GBP000
Revenue 12,771 12,674 24,577
Operating costs (11,622) (11,915) (22,535)
------------------------------- ---------- ---------- ------------
Operating profit
before exceptional
items 1,149 730 2,013
Exceptional items:
Exceptional costs - (1,271) (1,271)
Pension credit - 1,300 1,300
------------------------------- ---------- ---------- ------------
Operating profit 1,149 759 2,042
Finance income - - -
Finance costs (305) (246) (651)
---------- ---------- ------------
Profit before taxation 844 513 1,391
Taxation (148) (141) (114)
----------
Profit attributable
to shareholders of
the group 696 372 1,277
========== ========== ============
Earnings per share
(basic and diluted) 1.68p 0.86p 3.01p
All amounts relate
to continuing operations
Consolidated Statement of
Comprehensive Income
6 months ended 31st
December 2016
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
31st 31st 30th
December December June
2016 2015 2016
GBP000 GBP000 GBP000
Profit attributable
to shareholders of
the group 696 372 1,277
Actuarial loss recognised
in the pension scheme (480) (218) (291)
Related deferred taxation 96 44 (83)
---------- ---------- ------------
(384) (174) (374)
---------- ---------- ------------
Unrealised valuation
gain - - 3,009
Related deferred taxation - - (240)
---------- ---------- ------------
- - 2,769
---------- ---------- ------------
Total comprehensive
income attributable
to shareholders of
the group 312 198 3,672
========== ========== ============
Consolidated Balance
Sheet
as at 31st December Unaudited Unaudited Audited
2016
31st 31st 30th
December December June
2016 2015 2016
GBP000 GBP000 GBP000
Non-current assets
Property, plant and
equipment 6,164 5,447 5,489
Investment property 2,701 - 2,701
Deferred tax asset 1,326 1,350 1,264
10,191 6,797 9,454
---------- ---------- ------------
Current assets
Inventories 9,017 8.313 9,338
Trade and other receivables 4,076 3,451 4,601
Cash and cash equivalents 2,499 2,561 3,114
---------- ---------- ------------
15,592 14,325 17,053
---------- ---------- ------------
Total assets 25,783 21,122 26,507
---------- ---------- ------------
Current liabilities
Trade and other payables (3,656) (3,503) (5,505)
Provisions (125) (325) (125)
---------- ---------- ------------
(3,781) (3,828) (5,630)
---------- ---------- ------------
Non-current liabilities
Obligation under finance
leases (854) - -
Pension deficit (7,264) (6,406) (6,685)
Deferred tax (241) (1) (241)
(8,359) (6,407) (6,926)
---------- ---------- ------------
Total liabilities (12,140) (10,235) (12,556)
---------- ---------- ------------
13,643 10,887 13,951
========== ========== ============
Equity
Called up share capital 10,339 10,851 10,339
Share premium account 504 504 504
Capital redemption
reserve 3,617 3,105 3,617
Revaluation reserve 3,009 - 3,009
Retained earnings (3,826) (3,573) (3,518)
13,643 10,887 13,951
========== ========== ============
Consolidated Cash
Flow Statement
6 months ended 31st Unaudited Unaudited Audited
December 2016
6 months 6 months year
ended ended ended
31st 31st 30th
December December June
2016 2015 2016
GBP000 GBP000 GBP000
Cash flow from operating
activities
Profit attributable
to shareholders of
the group 696 372 1,277
Tax charged 148 141 114
Finance costs 305 246 651
Depreciation 334 404 837
Profit on disposal
of property plant
and equipment - - (6)
Pension credit - (1,300) (1,300)
Inventory impairment - 468 468
---------- ---------- ------------
Operating cash flows
before exceptional
items & movements
in working capital 1,483 331 2,041
Decrease in inventories 321 1,866 841
Decrease / (increase)
in trade and other
receivables 525 961 (189)
(Decrease) / increase
in trade and other
payables (2,015) (1,696) 232
Increase in provisions
for liabilities and
charges - 325 125
---------- ---------- ------------
Cash generated from
operations 314 1,787 3,050
Income tax received 52 - 61
Contributions to defined
benefit pension scheme (200) (200) (400)
---------- ---------- ------------
Net cash generated
from operations 166 1,587 2,711
---------- ---------- ------------
Investing activities
Purchase of property,
plant and equipment (1,009) (518) (704)
Proceeds on disposal
of property, plant
and equipment - - 25
---------- ---------- ------------
(1,009) (518) (679)
---------- ---------- ------------
Financing activities
Interest (6) - -
Obligations under
finance leases 854 - -
Share repurchase - - (410)
Equity dividends paid (620) (391) (391)
---------- ---------- ------------
228 (391) (801)
---------- ---------- ------------
Net increase/(decrease)
in cash and cash equivalents (615) 678 1,231
Cash and cash equivalents
at start of period 3,114 1,883 1,883
Cash and cash equivalents
at end of period 2,499 2,561 3,114
========== ========== ============
Consolidated Statement of
Changes in Equity
6 months ended 31st
December 2016
Share Share Capital Revaluation Profit Total
capital premium redemption reserve and equity
account reserve loss
account
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1st July 2015 10,851 504 3,105 - (3,380) 11,080
Comprehensive income
for the period
Profit for the period - - - - 372 372
Other comprehensive
income for the period - - - - (174) (174)
----------- ---------- ------------ ------------ --------- --------
- - - - 198 198
Contributions by
and distributions
to owners
Dividend Paid - - - - (391) (391)
----------- ---------- ------------ ------------ --------- --------
At 31st December
2015 10,851 504 3,150 - (3,573) 10,887
Comprehensive income
for the period
Profit for the period - - - - 905 905
Other comprehensive
income for the period - - - 3,009 (440) 2,569
----------- ---------- ------------ ------------ --------- --------
- - - 3,009 465 3,474
Contributions by
and distributions
to owners
Share repurchase (512) - 512 - - -
Consideration paid
on share purchase - - - - (410) (410)
----------- ---------- ------------ ------------ --------- --------
(512) - 512 - (410) (410)
----------- ---------- ------------ ------------ --------- --------
At 30(th) June 2016 10,339 504 3,617 3,009 (3,518) 13,951
Comprehensive income
for the period
Profit for the year - - - - 696 696
Other comprehensive
income for the year - - - - (384) (384)
----------- ---------- ------------ ------------ --------- --------
- - - - 312 312
Contributions by
and distributions
to owners
Dividend Paid - - - - (620) (620)
=========== ========== ============ ============ ========= ========
At 31(st) December
2016 10,339 504 3,617 3,009 (3,826) 13,643
=========== ========== ============ ============ ========= ========
Note
BASIS OF PREPARATION AND
ACCOUNTING POLICIES
The financial information for the six month periods
ended 31(st) December 2016 and 31(st) December 2015
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEUFASFWSEDE
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February 21, 2017 02:00 ET (07:00 GMT)
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