TIDMAIEA
RNS Number : 6405H
Airea PLC
02 August 2019
AIREA PLC
(the "Group")
Interim report for the six months ended 30 June 2019
The principal activity of the group is the manufacturing,
marketing and distribution of commercial floor coverings.
Chairman's Statement
The six months ended 30 June 2019 continued the strategic
progress made in recent periods; however, high levels of market
uncertainty within the economy resulted in tougher market
conditions during the second quarter slowing the Group's financial
performance.
Despite strong growth in the order book and increased sales
internationally, revenue and operating profit are below the
corresponding period driven by the uncertainty in the market and
the economic environment. This affected the timing of customer call
offs within the order book and the Group's decision to increase
inventory to prepare for potential Brexit challenges, had the UK
left the EU on 31 March 2019, had a significant financial impact on
operating profit and cash flow.
These challenges have not held back our strategic development
with further strengthening of the sales and design teams. In
addition the Group has taken the opportunity to invest in the
infrastructure of the business with new on site storage facilities
and a new finance and operating system to be put in place by the
fourth quarter increasing our operational capabilities.
Group Results
Revenue for the period was GBP8.9m (2018: GBP9.1m). The
operating profit was GBP1,085,000 (2018: GBP1,481,000). After
charging pension related finance costs of GBP143,000 (2018:
GBP158,000) and incorporating the appropriate tax charge the net
profit for the period was GBP935,000 (2018: GBP955,000). Basic
earnings per share were 2.26p (2018: 2.31p).
There were no losses and related costs for the discontinued
Ryalux business (2018: GBP359,000 loss).
Operating cash flows before exceptional items and movements in
working capital were GBP1.3m (2018: GBP1.7m). Working capital
increased in the period by GBP0.8m (2018: GBP0.5m) mainly as a
result of the timing of stock build. Contributions to the defined
benefit pension scheme were GBP200,000 (2018: GBP200,000) in line
with the agreement reached with the scheme trustees following the
last triennial valuation as at 1 July 2017. Capital expenditure of
GBP236,000 (2018: GBP61,000) was made in renovating additional
storage facilities, renewing and enhancing manufacturing plant and
equipment and supporting product launches.
Outlook
Although disappointed with the sales performance during the last
six weeks of the first half we are pleased by the progress made
during the period improving the foundations of the Group. Sales
growth will continue to be challenging given the uncertainty that
remains whilst awaiting the outcome of Brexit negotiations;
however, as a UK manufacturer with a strong position in the UK and
internationally and an ever increasing product portfolio, we are
well placed to moderate these risks and take advantage of growth
opportunities as they arise.
Given the financial performance of the Group and resulting cash
flow we are pleased to be able to maintain the policy introduced in
2017 of paying an interim dividend of 0.8p (2018: 1.75p) to be paid
on the 24 October 2019 to shareholders on the register at close of
business on 20 September 2019. The ex-dividend date is 19 September
2019.
Martin Toogood
Chairman
2 August 2019
Consolidated Income Statement
6 months ended 30 June 2019
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2019 2018 2018
GBP000 GBP000 GBP000
Continuing Operations
Revenue 8,890 9,132 19,260
Operating costs (7,945) (7,787) (16,536)
Other operating income 140 136 291
Operating profit before
exceptional
items 1,085 1,481 3,015
Exceptional costs - - -
Unrealised valuation gain - - 250
------------------------------ --- ---------- ------------- ------------------
Operating profit 1,085 1,481 3,265
Finance income 3 - 1
Finance costs (143) (158) (355)
Finance costs relating to
GMP Equalisation - - (299)
------------- ------------------
Profit before taxation 945 1,323 2,612
Taxation (10) (9) 785
---------- ------------- ------------------
Profit attributable to shareholders
of the group from continuing
operations 935 1,314 3,397
========== ============= ==================
Discontinued Operations
Loss attributable to shareholders
of the group from discontinued
operations - (359) (1,389)
Profit attributable to shareholders
of the group for the period 935 955 2,008
========== ============= ==================
Earnings per share (basic
and diluted) for continuing
operations 2.26p 3.18p 8.21p
Earnings per share (basic and
diluted) for the group 2.26p 2.31p 4.86p
Consolidated Statement of
Comprehensive Income
6 months ended 30 June 2019
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2019 2018 2018
GBP000 GBP000 GBP000
Profit attributable to
shareholders
of the group 935 955 2,008
Actuarial loss recognised
in the pension scheme - - (1,284)
Related deferred taxation - - 218
------------- ------------------
- - (1,066)
---------- ------------- ------------------
Unrealised valuation gain - 39 78
Related deferred taxation - - (13)
------------- ------------------
- 39 65
---------- ------------- ------------------
Total other comprehensive
income - 39 (1,001)
---------- ------------- ------------------
Total comprehensive income
attributable
to shareholders of the group 935 994 1,007
========== ============= ==================
Consolidated Balance
Sheet
as at 30 June 2019
Unaudited Unaudited Audited
30 June 30 June 30 December
2019 2018 2018
GBP000 GBP000 GBP000
Non-current assets
Property, plant and equipment 5,182 5,107 5,108
Intangible assets 69 114 95
Investment property 3,400 3,150 3,400
Deferred tax asset 1,457 1,415 1,466
--------------------- ----------------
10,108 9,786 10,069
Current assets
Inventories 7,363 6,918 6,797
Trade and other receivables 4,621 2,870 2,330
Cash and cash equivalents 1,436 2,448 2,732
--------------- --------------------- ----------------
13,420 12,236 11,859
--------------------- ----------------
Total assets 23,528 22,022 21,928
--------------- --------------------- ----------------
Current liabilities
Trade and other payables (3,614) (4,793) (3,571)
Provisions (320) - (320)
Obligations under finance
leases (190) (185) (187)
--------------------- ----------------
(4,124) (4,978) (4,078)
Non-current liabilities
Pension deficit (3,625) (2,114) (3,688)
Deferred tax (304) (268) (305)
Loan (1,551) - -
Obligation under finance
leases (227) (417) (323)
--------------------- ----------------
(5,707) (2,799) (4,316)
--------------- --------------------- ----------------
Total liabilities (9,831) (7,777) (8,394)
--------------- --------------------- ----------------
13,697 14,245 13,534
=============== ===================== ================
Equity
Called up share capital 10,339 10,339 10,339
Share premium account 504 504 504
Capital redemption reserve 3,617 3,617 3,617
Revaluation reserve 3,096 3,165 3,096
Retained earnings (3,859) (3,380) (4,022)
--------------------- ----------------
13,697 14,245 13,534
=============== ===================== ================
Consolidated Cash Flow
Statement
6 months ended 30 June 2019
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2019 2018 2018
GBP000 GBP000 GBP000
Cash flow from operating
activities
Profit for the period 935 1,314 2,008
Depreciation 157 155 372
Amortisation 32 28 58
Finance costs 137 158 654
Loss on disposal of property,
plant and equipment - - (291)
Taxation 10 9 (785)
Unrealised valuation gain - - (250)
---------------- ----------------
Operating cash flows before
movements in working capital 1,271 1,664 1,766
(Increase) / decrease in
inventories (566) (762) 140
(Increase) / decrease in trade
and other receivables (291) (700) 581
Increase / (decrease) in
trade and other payables 43 972 (174)
Increase / (decrease) in
provisions for liabilities
and charges - - 20
---------------- ----------------
Cash generated from operations 457 1,174 2,333
Income tax received - - -
Contributions to defined
benefit pension scheme (200) (200) (400)
---------------- ----------------
Net cash generated from
operating
activities 257 974 1,933
------------------- ---------------- ----------------
Investing activities
Payments to acquire intangible
fixed assets (6) (43) (399)
Payments to acquire tangible
fixed assets (230) (18) (29)
Receipts from sales of
tangible
fixed assets - - 513
---------------- ----------------
(236) (61) 85
------------------- ---------------- ----------------
Financing activities
Interest paid (6) (8) (14)
Interest received 3 - 1
Proceeds from loan 1,700 - -
Loan to Airea Employee Benefit (2,000) - -
Trust
Finance lease repayments (93) (91) (183)
Repayment of loan (149) - -
Equity dividends paid (772) (2,068) (2,792)
---------------- ----------------
Net cash used in financing
activities (1,317) (2,167) (2,988)
------------------- ---------------- ----------------
Net decrease in cash and cash
equivalents (1,296) (1,254) (970)
Cash and cash equivalents
at start of the period 2,732 3,702 3,702
---------------- ----------------
Cash and cash equivalents
at end of the period 1,436 2,448 2,732
=================== ================ ================
Consolidated Statement of
Changes in Equity
6 months ended 30
June 2019
Share Share Capital Revaluation Profit Total
capital premium redemption reserve and loss equity
account reserve account
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1st January 2018 10,339 504 3,617 3,126 (2,267) 15,319
Comprehensive income
for the period
Profit for the period - - - - 2,008 2,008
Actuarial loss recognised
on the pension scheme - - - - (1,066) (1,066)
Revaluation of property - - - 65 - 65
Total comprehensive
income for the year - - - 65 942 1,007
Contributions by and distributions
to owners
Dividend paid - - - - (2,792) (2,792)
Revaluation reserve
transfer - - - (95) 95 -
Total contributions
by and distributions
to owners - - - (95) (2,697) (2,792)
At 31st December 2018
and 1st January 2019 10,339 504 3,617 3,096 (4,022) 13,534
Comprehensive income
for the period
Profit for the period - - - - 935 935
Actuarial loss recognised - - - - - -
on the pension scheme
Total comprehensive
income for the year - - - - 935 935
Contributions by and distributions
to owners
Dividend paid - - - - (772) (772)
Total contributions
by and distributions
to owners - - - - (772) (772)
At 30th June 2019 10,339 504 3,617 3,096 (3,859) 13,697
1 BASIS OF PREPARATION AND ACCOUNTING POLICIES
The financial information for the six months ended 30 June
2019 and the six months ended 30 June 2018 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 31st
December 2018 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 period
ended 31st December 2018. These policies are set out in the
annual report and accounts for the period ended 31st December
2018 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
2 DISCONTINUED OPERATIONS
The residential carpets business was closed during 2018 with
the below analysis for comparative purposes with no additional
costs incurred during the current period.
Unaudited Unaudited Audited
6 months ended 6 months 12 months
ended ended
30 June 30 June 31 December
2019 2018 2018
GBP000 GBP000 GBP000
Discontinued
operations
Revenue 920 935
Operating costs - (2,313) (2,324)
-------------- ----------------
Loss before
taxation - (1,393) (1,389)
Taxation - 1,034 -
------------------- -------------- ----------------
Loss
attributable
to
shareholders
of the group
from
discontinued
operations - (359) (1,389)
=================== ============== ================
Enquiries:
Neil Rylance 01924 266561
Chief Executive Officer
Paul Stevenson 01924 266561
Group Finance Director
Peter Steel / Ben Farrow 020 7496 3000
N+1 Singer
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END
IR EAKPFEESNEFF
(END) Dow Jones Newswires
August 02, 2019 02:00 ET (06:00 GMT)
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