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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

IR SEIFAWEESESW

(END) Dow Jones Newswires

July 28, 2022 02:00 ET (06:00 GMT)

Airea (LSE:AIEA)
Historical Stock Chart
From Sep 2022 to Oct 2022 Click Here for more Airea Charts.
Airea (LSE:AIEA)
Historical Stock Chart
From Oct 2021 to Oct 2022 Click Here for more Airea Charts.