TIDMAIEA

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 GBP23.9m (2016: GBP24.6m). The operating profit was GBP2,121,000 (2016: GBP2,042,000). After charging pension related finance costs of GBP614,000 (2016: GBP651,000) and incorporating the appropriate tax charge the net profit for the period was GBP1,423,000 (2016 GBP1,277,000). Basic earnings per share were 3.44p (2016 3.01p)

Operating cash flows before exceptional items and movements in working capital were GBP2.8m (2016: GBP2.8m). Working capital increased in the period by GBP2.0m as a result of stock build for successful product launches. Contributions to the defined benefit pension scheme were GBP400,000 (2016: GBP400,000) in line with the agreement reached with the scheme trustees following the last triennial valuation as at 1(st) July 2014. Capital expenditure of GBP1,280,000 (2016: GBP704,000) was made in renewing and enhancing manufacturing plant and equipment.

The increase in the pension deficit of GBP277,000 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       year 
                              months      ended 
                               ended 
                                30th       30th 
                                June       June 
                                2017       2016 
                              GBP000     GBP000 
 
  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       year 
                              months      ended 
                               ended 
                                30th       30th 
                                June       June 
                                2017       2016 
                              GBP000     GBP000 
  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       30th 
                                June       June 
                                2017       2016 
                              GBP000     GBP000 
  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     Unaudited    Audited 
   June 2017 
                                  12       year 
                              months      ended 
                               ended 
                                30th       30th 
                                June       June 
                                2017       2016 
                              GBP000     GBP000 
  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      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            -          -            -             -      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 
 
 
 
 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR SESFMMFWSELU

(END) Dow Jones Newswires

September 27, 2017 02:00 ET (06:00 GMT)

Airea (LSE:AIEA)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Airea Charts.
Airea (LSE:AIEA)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Airea Charts.