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
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