TIDMAIEA
RNS Number : 9957T
Airea PLC
28 July 2022
Airea plc
(the "Company")
Interim report for the six months ended 30th June 2022
The principal activity of the group is the design, manufacture,
marketing and distribution of floor coverings.
Chairman's Statement
The six months ended 30th June 2022 continued to see recovery
from the impacts of the COVID-19 pandemic, which had suppressed
activity in our key markets. H1 delivered improved sales and
operating profit versus the prior year as demand in both our home
and export markets continued to recover.
We remain focused on our operational and supply chain processes,
which enable us to navigate the challenges from the current
economic environment and the Ukrainian conflict both of which
continue to put a strain on the availability of labour and raw
materials.
The launches of our new products into the market continues with
a noted increase in the sales of these products and the continuing
specification of our product in the medium and premium sectors.
Net cash (cash less loans and borrowings) increased by GBP0.3m
in the 6 month period to GBP2.5m as at 30th June 2022 from GBP2.2m
as at 31 December 2021. We continue to have further liquidity
available of GBP1.0m via our unutilised overdraft facility (2021:
GBP1.0m unutilised). Our cash reserves and strong balance sheet
enable us to manage the impact of the current economic environment
and support our ongoing product development.
Group Results
Revenue for the period was GBP8.6m, GBP1.2m above the prior year
(2021: GBP7.4m). In the UK our sales were 7.5% ahead of the prior
six month comparative period as home sales recovered to
pre-pandemic levels. Export sales were up 45.5% compared to the
comparative period, despite the recovery to date export sales are
26% down on the pre-pandemic levels with the general economic
environment continuing to impact trading overseas.
The operating profit was GBP756,000 (2021: GBP574,000).
Excluding inventory absorption impacts, underlying product margins
have come under some pressure versus prior year due to significant
raw material inflation. After charging pension, lease and loan
related interest costs of GBP108,000 (2021: GBP114,000) and
incorporating the appropriate tax charge the net profit for the
period was GBP611,000 (2021: GBP440,000). Basic earnings per share
were 1.58p (2021: 1.14p).
Operating cash flows before movements in working capital were
GBP0.8m (2021: GBP0.5m). Working capital remained relatively stable
in the period in spite of the increased prices of raw materials.
Contributions to the defined benefit pension scheme were GBPnil
(2021: GBP0.2m) in line with the agreement reached with the scheme
trustees following the last triennial valuation as at 1st July
2020. There was capital expenditure of GBP0.2m on small
enhancements to plant and equipment following the major spend in
the previous year (2021: GBP1.2m).
Update on CEO Replacement
The selection process for our new CEO continues, we have made
good progress and expect to be in a position to make an
announcement in the coming months.
Outlook
The development of our product ranges continues with the
launches of new products and the refresh of existing products
planned for the second half of the year. Our order book and sales
of new products continue to grow as we strengthen our portfolio of
products.
Recovery of our UK market has been pleasing with recovery in
export sales expected to continue, however it must be noted that
the Ukrainian conflict has adversely impacted some of our key
export markets.
We have experienced unprecedented pressure on costs over the
last 18 months and we have taken numerous actions to mitigate the
impact on profitability. Those cost pressures and managing them
will continue to be challenging over the remainder of this year and
into the future.
Given the continued levels of uncertainty in the market and the
wider economy the group will continue to prioritise the
preservation of cash. We will therefore not be proposing an interim
dividend at this time (2021: nil). We were pleased to have been in
a position to declare and pay a final dividend following the 2021
results and we cautiously expect to be in the position to do
similar once our 2022 results are finalised.
MARTIN TOOGOOD
Chairman
28th July 2022
Enquiries:
Ryan Thomas via 01924
266 561
Group Finance Director
020 7496
Peter Steel / Daniel Dearden-Williams 3000
Singer Capital Markets
Consolidated Income Statement
6 months ended 30th June 2022
Unaudited 6 Unaudited Audited
months ended 6 months 12 months
30th June ended ended 31st
2022 30th June December
2021 2021
GBP000 GBP000 GBP000
---------------------------------------- --------------------------- --------------- ---------------------
Revenue 8,551 7,431 15,865
Operating costs (7,935) (6,997) (14,832)
Other operating income 140 140 280
---------------------------------------- --------------------------- --------------- ---------------------
Operating profit before valuation
gain 756 574 1,313
Unrealised valuation gain - - 275
---------------------------------------- --------------------------- --------------- ---------------------
Operating profit 756 574 1,588
Finance income 8 4 8
Finance costs (108) (114) (305)
---------------------------------------- --------------------------- --------------- ---------------------
Profit before taxation 656 464 1,291
Taxation (45) (24) (249)
---------------------------------------- --------------------------- --------------- ---------------------
Profit attributable to shareholders
of the group 611 440 1,042
---------------------------------------- --------------------------- --------------- ---------------------
Earnings per share (basic and diluted)
for the group 1.58p 1.14p 2.70p
Consolidated Statement of Comprehensive Income
6 months ended 30th June 2022
Unaudited Unaudited Audited
---------------------------------------------
6 months 6 months 12 months
---------------------------------------------
ended ended ended
30th June 30th June 31st December
2022 2021 2021
GBP000 GBP000 GBP000
--------------------------------------------- ------------------ ------------- -------------
Profit attributable to shareholders
of the group 611 440 1,042
Items that will not be reclassified
to profit or loss
Actuarial gain recognised in the pension
scheme 35 1,687 1,599
Related deferred taxation (7) (358) (380)
--------------------------------------------- ------------------ ------------- -------------
28 1,329 1,219
--------------------------------------------- ------------------ ------------- -------------
Items that will be reclassified subsequently
to profit or loss when specific conditions
are met
Revaluation of property - - 166
Related deferred taxation - - (32)
--------------------------------------------- ------------------ ------------- -------------
- - 134
--------------------------------------------- ------------------ ------------- -------------
Total other comprehensive income 28 1,329 1,353
--------------------------------------------- ------------------ ------------- -------------
Total comprehensive income attributable
to shareholders of the group 639 1,769 2,395
--------------------------------------------- ------------------ ------------- -------------
Consolidated Balance Sheet
as at 30th June 2022
Unaudited 30th Unaudited Audited
June 30th June 31st December
2022 2021 2021
GBP000 GBP000 GBP000
------------------------------ ---------------------------------- --------------- -----------------------
Non-current assets
Property, plant and equipment 5,307 5,279 5,305
Intangible assets 51 62 55
Investment property 4,000 3,725 4,000
Right-of-use asset 943 1,011 972
Deferred tax asset 682 733 720
------------------------------ ---------------------------------- --------------- -----------------------
10,983 10,810 11,052
Current assets
Inventories 6,132 5,877 6,150
Trade and other receivables 2,370 2,093 1,887
Cash and cash equivalents 5,450 6,226 5,688
------------------------------ ---------------------------------- --------------- -----------------------
13,952 14,196 13,725
------------------------------ ---------------------------------- --------------- -----------------------
Total assets 24,935 25,006 24,777
------------------------------ ---------------------------------- --------------- -----------------------
Current liabilities
Trade and other payables (3,683) (3,679) (3,258)
Provisions (175) (138) (245)
Lease liabilities (124) (145) (124)
Loans and borrowings (731) (1,359) (935)
------------------------------ ---------------------------------- --------------- -----------------------
(4,713) (5,321) (4,562)
Non-current liabilities
Deferred tax (1,047) (767) (1,031)
Lease liabilities (212) (174) (183)
Loans and borrowings (2,226) (2,911) (2,592)
------------------------------ ---------------------------------- --------------- -----------------------
(3,485) (3,852) (3,806)
------------------------------ ---------------------------------- --------------- -----------------------
Total liabilities (8,198) (9,173) (8,368)
------------------------------ ---------------------------------- --------------- -----------------------
Net assets 16,737 15,833 16,409
------------------------------ ---------------------------------- --------------- -----------------------
Equity
Called up share capital 10,339 10,339 10,339
Share premium account 504 504 504
Own Shares (2,000) (876) (555)
Share-based payment reserve - 161 157
Capital redemption reserve 3,617 3,617 3,617
Revaluation reserve 3,150 3,014 3,150
Retained earnings 1,127 (926) (803)
------------------------------ ---------------------------------- --------------- -----------------------
Total equity 16,737 15,833 16,409
------------------------------ ---------------------------------- --------------- -----------------------
Consolidated Cash Flow Statement
6 months ended 30th June 2022
Unaudited Unaudited Audited
6 months 6 months 12 months
ended 30th ended ended 31st
June 30th June December
2022 2021 2021
GBP000 GBP000 GBP000
------------------------------------------ ---------------------- --------------- ---------------------
Cash flow from operating activities
Profit for the period 611 440 1,042
Depreciation 165 123 276
Depreciation of right-of-use assets 126 128 250
Amortisation 14 16 30
Movement in Provision (70) (327) (220)
Share-based payment (credit)/expenses (157) 20 16
Net Finance costs 100 110 297
Profit on disposal of property, plant
and equipment (77) - -
Tax charge 45 24 249
Unrealised valuation gain - - (275)
------------------------------------------ ---------------------- --------------- ---------------------
Operating cash flows before movements
in working capital 757 534 1,665
Decrease/(increase) in inventory 18 (255) (528)
Increase in trade and other receivables (483) (417) (152)
Increase in trade and other payables 425 784 347
------------------------------------------ ---------------------- --------------- ---------------------
Cash generated from operations 717 646 1,332
Contributions to defined benefit
pension scheme - (200) (400)
------------------------------------------ ---------------------- --------------- ---------------------
Net cash generated from operating
activities 717 446 932
------------------------------------------ ---------------------- --------------- ---------------------
Cash flows from investing activities
Payments to acquire intangible fixed
assets (10) (24) (31)
Payments to acquire tangible fixed
assets (167) (1,131) (1,236)
Receipts from sales of tangible fixed
assets 77 - -
------------------------------------------ ---------------------- --------------- ---------------------
(100) (1,155) (1,267)
------------------------------------------ ---------------------- --------------- ---------------------
Cash flows from financing activities
Interest paid on lease liabilities (4) (6) (12)
Interest paid on borrowings (69) (11) (83)
Interest received 8 4 8
Proceeds from asset financing - 934 934
Principal paid on lease liabilities (67) (166) (260)
Repayment of loans and borrowings (569) (375) (1,119)
Equity dividends paid (154) - -
------------------------------------------ ---------------------- --------------- ---------------------
Net cash generated from financing
activities (855) 380 (532)
------------------------------------------ ---------------------- --------------- ---------------------
Net decrease in cash and cash equivalents (238) (329) (867)
Cash and cash equivalents at start
of the period 5,688 6,555 6,555
------------------------------------------ ---------------------- --------------- ---------------------
Cash and cash equivalents at end
of the period 5,450 6,226 5,688
------------------------------------------ ---------------------- --------------- ---------------------
Consolidated Statement of Changes in Equity
6 months ended 30th June 2022
Share Share-based Capital Profit
Share premium Own payment redemption Revaluation and Total
capital account Shares reserve reserve reserve loss equity
account
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------------------------- ------------ ------------- --------------- --------------- ------------ ------------ -------------
At 1st January 2021
10,339 504 (1,197) 141 3,617 3,014 (2,420) 13,998
Comprehensive income
for the year
Profit for the year
- - - - - - 1,042 1,042
Actuarial loss recognised
on the pension scheme
- - - - - - 1,219 1,219
Revaluation of property
- - - - - 166 (32) 134
--------------------------------------------- ------------ ------------- --------------- --------------- ------------ ------------ -------------
Total comprehensive
income for the year
- - - - - 166 2,229 2,395
Contributions by and distributions to owners
Dividend paid - - - - - - - -
Share-based
payment - - - 16 - - - 16
Own share
transfer
Revaluation - - 642 - - - (642) -
Reverse
Transfer - - - - - (30) 30 -
------------------ ------------------------------- --------------------------------------------------- ------------
Total
contributions
by and
distributions
to owners - - 642 16 - (30) (612) 16
------------------ ---- ----------- ------------ ----------- ----------- ------------ ----------- ------------
At 31st December
2021
and 1st January 2022
10,339 504 (555) 157 3,617 3,150 (803) 16,409
------------------------ ----------- ------------ ----------- ----------- ------------ ----------- ------------
Comprehensive income
for the period
Profit for the
period
-
Actuarial gain
recognised
on the pension - - - - - 611 611
scheme
- - - - - - 28 28
Revaluation of property - - - - - - -
-
------------------------ ----------- ------------ ----------- ----------- ------------ ----------- ------------
Total comprehensive
income for the
period
- - - - - - 639 639
Contributions
by and
distributions
to owners
Dividend paid - - - - - - (154) (154)
Share-based payment
- - - (157) - - - (157)
Own Shares Transfer
- - (1,445) - - - 1,445 -
------------------------ ----------- ------------ ----------- ----------- ------------ ----------- ------------
Total contributions
by and distributions
to
owners - - (1,445) (157) - - 1,291 (311)
------------------------ ----------- ------------ ----------- ----------- ------------ ----------- ------------
At 30th June 2022
10,339 504 (2,000) - 3,617 3,150 1,127 16,737
------------------------ ----------- ------------ ----------- ----------- ------------ ----------- ------------
Notes to the Financial Statements
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The financial information for the six months ended 30th June
2022 and the six months ended 30th June 2021 have not been audited
and do 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 2021 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 UK
adopted International Accounting Standards 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 UK adopted International
Accounting Standards. The accounting policies used are the same as
those used in preparing the financial statements for the period
ended 31st December 2021. These policies are set out in the annual
report and accounts for the period ended 31st December 2021 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.
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END
IR SEIFAWEESESW
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