TIDMAIEA
RNS Number : 3225H
Airea PLC
27 July 2023
27 July 2023
AIREA plc
("AIREA", the "Group" or the "Company")
Interim results for the six months ended 30 June 2023
AIREA plc (AIM: AIEA), the UK design-led specialist flooring
company, supplying both the UK and international markets, is
pleased to announce its interim results for the six months ended 30
June 2023.
Financial highlights
30 June 2023 30 June 2022 Change
(GBP) (GBP) (%)
Group revenue 9,825k 8,551k 14.9
------------------ ------------------ ------------
Operating profit before
valuation 836k 756k 10.5
------------------ ------------------ ------------
Profit before tax 620k 656k (5.4)
------------------ ------------------ ------------
EBITDA (Earnings before
interest tax depreciation
and amortisation) 1,010k 1,016k (0.1)
------------------ ------------------ ------------
Cash and cash equivalents 4,919k 5,450k (9.7)
------------------ ------------------ ------------
Net cash 2,694k 2,493k 8.1
------------------ ------------------ ------------
Operational highlights
-- Continued focus on sales growth in existing and new
territories, with key wins in export markets.
-- Successful launch of carbon-neutral products in line with
market trends and demand for low-carbon products.
-- Installation and commissioning of solar panels, reducing exposure to energy price volatility.
-- Appointment of Tanya Ashton, Non-Executive Director, in May 2023.
Martin Toogood, Non-Executive Chairman of AIREA plc,
commented:
"The first half of 2023 has seen continued growth in our sales
fuelled by a focus on refreshing our product offering and taking
advantage of new markets. The current economic environment
continues to put a strain on the cost of labour, energy, and raw
materials. We do however continue to take actions to manage these
risks with investments for the future such as the installation of
our renewable energy solutions, all with a view to capitalising on
the opportunities in our markets as and when wider macro conditions
improve."
- Ends -
For further information please contact:
AIREA plc Tel: +44 (0) 192 426 6561
Médéric Payne, Chief Executive
Officer
Ryan Thomas, Chief Financial Officer
Singer Capital Markets Tel: +44 (0) 20 7496 3000
(Nominated Adviser and Sole Broker)
Peter Steel / Sam Butcher
Yellow Jersey PR Tel: +44 (0) 20 3004 9512
(Financial media and PR)
Sarah Hollins / Shivantha Thambirajah
/ Jazmine Clemens
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) 596/2014 as
amended by regulation 11 of the Market Abuse (Amendment) (EU Exit)
Regulations 2019/310. With the publication of this announcement,
this information is now considered to be in the public domain.
Notes to Editors
AIREA plc is a UK design-led specialist flooring company,
supplying both UK and international markets. Since 2007, the Group
has been focused solely on floor coverings and enjoys a strong and
growing brand position within the commercial flooring market.
The Group's core brand Burmatex(R) is one of the UK's leading
designers and manufacturers of commercial carpet tiles and planks.
Burmatex(R) focuses on the design and creation of sustainable
innovative flooring solutions to meet the needs of architects,
specifiers and contractors with a continuously developing range to
suit the education, leisure, commercial, hospitality and public
sectors. The brand was acquired by AIREA in 1984.
The Group was admitted to trading on AIM of the London Stock
Exchange on 12 December 2007.
For further information, please visit:
https://aireaplc.com/.
Chief Executive Officer's Statement
Introduction
I am pleased to report the Group's interim results for the six
months ended 30 June 2023. During this period, AIREA has made good
progress and maintained momentum in both its home and export
markets. We have made a positive start to the year and the Group's
performance during the period is in line with management
expectations.
In May 2023, the Company seized the opportunity to exhibit at
the renowned Clerkenwell Design Week, which gave us the platform to
showcase our new ranges and promote the Burmatex(R) brand to the
market and engage with our target customer audience in this setting
for the first time in over ten years.
Results
Revenue for the period increased by 15% to GBP9.8m (2022:
GBP8.6m). In the UK, our sales were 9.8% ahead of the prior
six-month comparative period, largely driven by a combination of
cost increases being passed onto customers combined with an
improved sales mix. Export sales were up 36% compared to the
comparative period as demand recovered in most of our target export
markets, with good progress being made in new markets. The UK
market remains challenging given the economic backdrop, however,
performance is encouraging as our sales mix moves towards more
design-led products.
The Group's operating profit was GBP0.8m (2022: GBP0.8m). Our
underlying product margins faced downward pressures due to
increased energy, raw materials, and labour costs. We were
restricted in passing on these cost increases in a price-sensitive
market. Net finance costs increased by GBP0.1m largely because of
the increased pension interest charge. After charging net finance
costs of GBP0.2m (2022: GBP0.1m) and incorporating the appropriate
tax charge, the net profit for the period was GBP0.5m (2022:
GBP0.6m). Basic earnings per share were 1.18p (2022: 1.58p).
Operating cash flows before movements in working capital were
GBP1.2m (2022: GBP0.8m). Working capital increased in the period to
GBP0.5m due to an increase in inventory for new lines and higher
receivables from customers (2022: GBP0.0m). Contributions to the
defined benefit pension scheme were GBP0.0m (2022: GBP0.0m) in line
with the agreement reached with the scheme trustees following the
last triennial valuation as of 1 July 2023. Capital expenditure of
GBP0.9m (2022: GBP0.2m) was spent renewing and enhancing the
manufacturing plant and equipment, with an important investment in
our new solar panels.
Net cash (cash less loans and borrowings) decreased by GBP0.5m
in the six-month period to GBP2.7m as of 30 June 2023, from GBP3.2m
as of 31 December 2022. We continue to have further liquidity
available of GBP1.0m via our unutilised overdraft facility (2022:
GBP1.0m unutilised). Our cash reserves and strong balance sheet
enable us to invest in the future of the business and manage the
impact of the continued economic uncertainty and related risks.
Update on Board composition
The Board appointed Tanya Ashton as Non-Executive Director to
the Board on 10 May 2023. Tanya's appointment signals the
importance that we attach to good standards of corporate governance
at AIREA.
We have commenced the selection process for our new Chief
Financial Officer following the resignation of Ryan Thomas on 4
July 2023. We have made good progress and expect to be in a
position to make an announcement in the coming months.
We acknowledge the importance of reviewing Board composition on
an ongoing basis to ensure that the Group has the required level of
skills and experience to enable the business to operate efficiently
and react quickly to any issues that may arise.
Outlook
The development of our sustainable products indicates the
transformational change the Group is focused on to enable AIREA to
be more competitive, innovative, and agile. Our marketing and sales
strategy is not only UK-focused but also on growing our
international sales in both existing and new territories.
As the cost pressures persist, we continue to adapt our
processes and procedures to mitigate and manage the impact on the
business. In some areas, this has and will continue with the need
to invest in our facilities such that we reduce waste, improve
productivity, and utilise energy efficiently.
Given the plans to continue to invest in the future of the
business coupled with 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 (2022: GBPnil). We were pleased to
have been able to declare and pay a final dividend following the
2022 results and we cautiously expect to be in the position to do
similar once our 2023 results are finalised.
Finally, we would like to thank everyone associated with the
AIREA Group for their support during the period.
Médéric Payne
Chief Executive Officer
26 July 2023
Consolidated Income Statement
6 months ended 30 June 2023
Unaudited 6 Unaudited Audited
months ended 6 months 12 months
30 June ended ended 31
2023 30 June December
2022 2022
GBP000 GBP000 GBP000
---------------------------------------- --------------------------- --------------- --------------------
Revenue 9,825 8,551 18,483
Operating costs (9,301) (7,935) (17,111)
Other operating income 312 140 280
---------------------------------------- --------------------------- --------------- --------------------
Operating profit before valuation
gain 836 756 1,652
Unrealised valuation gain - - --
---------------------------------------- --------------------------- --------------- --------------------
Operating profit 836 756 1,652
Finance income 39 8 32
Finance costs (255) (108) (251)
---------------------------------------- --------------------------- --------------- --------------------
Profit before taxation 620 656 1,433
Taxation (130) (45) (138)
---------------------------------------- --------------------------- --------------- --------------------
Profit attributable to shareholders
of the Group 490 611 1,295
---------------------------------------- --------------------------- --------------- --------------------
Earnings per share (basic and diluted)
for the Group 1.18p 1.58p 3.36p
Consolidated Statement of Comprehensive Income
6 months ended 30 June 2023
Unaudited Unaudited Audited
---------------------------------------------
6 months 6 months 12 months
---------------------------------------------
ended ended ended
30 June 30 June 31 December
2023 2022 2022
GBP000 GBP000 GBP000
--------------------------------------------- --------- --------- -----------
Profit attributable to shareholders
of the Group 490 611 1,295
Items that will not be reclassified
to profit or loss
Actuarial gain/(loss) recognised in
the pension scheme 513 35 (1,247)
Related deferred taxation (128) (7) 318
--------------------------------------------- --------- --------- -----------
385 28 (929)
--------------------------------------------- --------- --------- -----------
Items that will be reclassified subsequently
to profit or loss when specific conditions
are met
Revaluation of property - - (25)
Related deferred taxation - - 5
--------------------------------------------- --------- --------- -----------
- - (20)
--------------------------------------------- --------- --------- -----------
Total other comprehensive income/(loss) 385 28 (949)
--------------------------------------------- --------- --------- -----------
Total comprehensive income attributable
to shareholders of the Group 875 639 346
--------------------------------------------- --------- --------- -----------
Consolidated Balance Sheet
as at 30 June 2023
Unaudited 30 Unaudited Audited
June 30 June 31 December
2023 2022 2022
GBP000 GBP000 GBP000
------------------------------ -------------------------------- --------------- ---------------------
Non-current assets
Property, plant and equipment 5,976 5,307 5,272
Intangible assets 59 51 71
Investment property 4,000 4,000 4,000
Right-of-use asset 754 943 917
Deferred tax asset 763 682 879
------------------------------ -------------------------------- --------------- ---------------------
11,552 10,983 11,139
Current assets
Inventories 6,560 6,132 5,895
Trade and other receivables 2,871 2,370 2,351
Cash and cash equivalents 4,919 5,450 5,762
------------------------------ -------------------------------- --------------- ---------------------
14,350 13,952 14,008
------------------------------ -------------------------------- --------------- ---------------------
Total assets 25,902 24,935 25,147
------------------------------ -------------------------------- --------------- ---------------------
Current liabilities
Trade and other payables (3,986) (3,683) (3,316)
Provisions (74) (175) (77)
Lease liabilities (127) (124) (131)
Loans and borrowings (736) (731) (734)
------------------------------ -------------------------------- --------------- ---------------------
(4,923) (4,713) (4,258)
Non-current liabilities
Deferred tax (1,144) (1,047) (1,040)
Pension deficit (1,000) - (1,345)
Lease liabilities (140) (212) (202)
Loans and borrowings (1,489) (2,226) (1,858)
------------------------------ -------------------------------- --------------- ---------------------
(3,773) (3,485) (4,445)
------------------------------ -------------------------------- --------------- ---------------------
Total liabilities (8,696) (8,198) (8,703)
------------------------------ -------------------------------- --------------- ---------------------
Net assets 17,206 16,737 16,444
------------------------------ -------------------------------- --------------- ---------------------
Equity
Called up share capital 10,339 10,339 10,339
Share premium account 504 504 504
Own Shares (1,805) (2,000) (2,000)
Share-based payment reserve --80 - ---
Capital redemption reserve 3,617 3,617 3,617
Revaluation reserve 3,096 3,150 3,096
Retained earnings 1,375 1,127 888
------------------------------ -------------------------------- --------------- ---------------------
Total equity 17,206 16,737 16,444
------------------------------ -------------------------------- --------------- ---------------------
Consolidated Cash Flow Statement
6 months ended 30 June 2023
Unaudited Unaudited Audited
6 months 6 months 12 months
ended 30 ended ended 31
June 30 June December
2023 2022 2022
GBP000 GBP000 GBP000
--------------------------------------------- --------------------- --------------- --------------------
Cash flow from operating activities
Profit for the period 490 611 1,295
Depreciation 165 165 309
Depreciation of right-of-use assets 124 126 260
Amortisation 15 14 29
Movement in Provision (3) (70) (168)
Share-based payment expense/(credit) 80 (157) (157)
Net Finance costs 216 100 219
Profit on disposal of property, plant
and equipment - (77) (77)
Tax charge 130 45 138
Operating cash flows before movements
in working capital 1,217 757 1,848
(Increase)/decrease in inventory (665) 18 255
Increase in trade and other receivables (520) (483) (464)
Increase in trade and other payables 670 425 66
--------------------------------------------- --------------------- --------------- --------------------
Cash generated from operations 702 717 1,705
Contributions to defined benefit pension - - ---
scheme
--------------------------------------------- --------------------- --------------- --------------------
Net cash generated from operating activities 702 717 1,705
--------------------------------------------- --------------------- --------------- --------------------
Cash flows from investing activities
Payments to acquire intangible fixed
assets (4) (10) (45)
Payments to acquire tangible fixed
assets (868) (167) (312)
Receipts from sales of tangible fixed
assets - 77 77
--------------------------------------------- --------------------- --------------- --------------------
Net cash used in investing activities (872) (100) (280)
--------------------------------------------- --------------------- --------------- --------------------
Cash flows from financing activities
Interest paid on lease liabilities (5) (4) (11)
Interest paid on borrowings (82) (69) (142)
Interest received 39 8 32
Principal paid on lease liabilities (66) (67) (141)
Repayment of loans and borrowings (366) (569) (935)
Equity dividends paid (193) (154) (154)
--------------------------------------------- --------------------- --------------- --------------------
Net cash used in financing activities (673) (855) (1,351)
--------------------------------------------- --------------------- --------------- --------------------
Net (decrease)/increase in cash and
cash equivalents (843) (238) 74
Cash and cash equivalents at start
of the period 5,762 5,688 5,688
--------------------------------------------- --------------------- --------------- --------------------
Cash and cash equivalents at end of
the period 4,919 5,450 5,762
--------------------------------------------- --------------------- --------------- --------------------
Consolidated Statement of Changes in Equity
6 months ended 30 June 2023
Share Share-based Capital Profit
Share premium Own payment redemption Revaluation and
capital account Shares reserve reserve reserve loss Total
account equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------------------------- ------------ ------------- --------------- --------------- ------------ ------------ ------
At 1 January 2022
10,339 504 (555) 157 3,617 3,150 (803) 16,409
Comprehensive income
for the year
Profit for the year
- - - - - - 1,295 1,295
Actuarial loss recognised
on the pension scheme
- - - - - - (929) (929)
Revaluation of property
- - - - - (25) 5 (20)
--------------------------------------------- ------------ ------------- --------------- --------------- ------------ ------------ ------
Total comprehensive
income for the year
- - - - - (25) 371 346
Contributions by and
distributions to owners
Dividend paid - - - - - - (154) (154)
Share-based payment - - - (157) - - - (157)
Own share
transfer
Revaluation - - (1,445) - - - 1,445 -
Reverse
Transfer - - - - - (29) 29 -
-------------------- ---------------------------------- --------------------------------------------------- -------
Total contributions
by and
distributions
to owners - - (1,445) (157) - (29) 1,320 (311)
-------------------- ---- ----------- --------------- ----------- ----------- ------------ ----------- -------
At 31 December
2022
and 1 January 2023
10,339 504 (2,000) - 3,617 3,096 888 16,444
-------------------------- ----------- --------------- ----------- ----------- ------------ ----------- -------
Comprehensive income
for the period
Profit for the period
-
Actuarial gain
recognised - - - - - 490 490
on the pension scheme
- - - - - - 385 385
Revaluation of property - - - - - - -
-
-------------------------- ----------- --------------- ----------- ----------- ------------ ----------- -------
Total comprehensive
income for the period
- - - - - - 875 875
Contributions
by and
distributions
to owners
Dividend paid - - - - - - (193) (193)
Share-based payment
- - - 80 - - - 80
Own Shares Transfer
- - 195 - - - (195) -
-------------------------- ----------- --------------- ----------- ----------- ------------ ----------- -------
Total contributions
by and distributions
to
owners - - 195 80 - - (388) (113)
-------------------------- ----------- --------------- ----------- ----------- ------------ ----------- -------
At 30 June 2023 10,339 504 (1,805) 80 3,617 3,096 1,375 17,206
-------------------------- ----------- --------------- ----------- ----------- ------------ ----------- -------
Notes to the Financial Statements
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The financial information for the six months ended 30 June 2023
and the six months ended 30 June 2022 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 31 December
2022 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 31 December 2022. These policies are set out in the annual
report and accounts for the period ended 31 December 2022 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 BRGDRDGDDGXL
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