RNS Number : 6945F
Airea PLC
26 September 2024
 

26 September 2024

 

AIREA plc

 

("AIREA", the "Group" or the "Company")

 

Interim results for the six months ended 30 June 2024

Solid trading in challenging market conditions, business transformation progressing well

 

AIREA plc (AIM: AIEA), the UK design-led specialist flooring company, supplying both the UK and international markets, today announces its interim results for the six months ended 30 June 2024.

 

Financial summary

·    Group revenue decreased by 5.6% to £9.3m (2023: £9.8m)

·    Operating profit decreased to £0.2m (2023: £0.8m), heavily impacted by;

sales slowdown in second quarter

non-recurring costs associated with new investment

ongoing strategic investment for future growth

·    EBITDA decreased to £0.6m (2023: £1.1m)

·    Cash and cash equivalents at £2.8m (2023: £4.9m)

 

Operational highlights

·    Sales performance slightly ahead of market

·    Business transformation progressing well, in line with plan

·    Major investment in manufacturing facility on track for completion in early 2025

·    Review of Group's stockholding policy underway

·    Successful launch of new carbon-neutral products

·    The Group's sustainability principles eco2matters® fully embedded

 

Martin Toogood, Non-Executive Chairman of AIREA plc, commented:

"The year started well, with strong demand for our carbon-zero and low-carbon product ranges in the first quarter. The Group then experienced an unforeseen slowdown in the second quarter, with international sales impacted by ongoing economic and geopolitical concerns. UK and ROI sales were less impacted, performing slightly ahead of the overall market trend.

 

"The Group had an encouraging start to the third quarter, with positive trading in July and August finishing with a strong order book. We anticipate continued improvement in trading during the second half with several new product launches scheduled and the Group is trading in line with the Board's recently revised expectations for the full year.

 

"The Board remains confident in the Group's long-term prospects as we focus on successfully delivering the investment in our manufacturing facility in early 2025 and the ongoing transformation of the business, positioning it for profitable future growth."

 

- Ends -

 

For further information please contact:

AIREA plc

Médéric Payne, Chief Executive Officer

Conleth Campbell, Chief Financial Officer

Tel: +44 (0) 192 426 6561

Singer Capital Markets
(Nominated Adviser and Sole Broker)

Peter Steel / Sam Butcher

Tel: +44 (0) 20 7496 3000

Northstar Communications
(Financial Media and PR)

Sarah Hollins

Tel: +44 (0) 113 730 3896

 

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® is one of the UK's leading designers and manufacturers of commercial carpet tiles and planks. Burmatex® 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 2024. Following a strong start to the year, there was an unexpected slowdown in the second quarter. Sales in our international markets were impacted by ongoing economic and geopolitical concerns, including the Middle East. Sales in the UK and ROI delivered a solid performance in challenging market conditions.

 

We remain focused on successfully delivering the investment in our manufacturing facility in early 2025 and the ongoing transformation of the business.

 

Results

Revenue for the period was 5.6% down year on year at £9.3m (2023: Â£9.8m). In the UK and ROI, sales were 0.3% down year on year. International sales were 21.9% behind the prior year.

 

The weaker than expected performance in the second quarter, due to the uncertainty around the UK general election, impacted operating profit which declined to £0.2m (2023: Â£0.8m). The Group's operating profit was also impacted by non-recurring costs associated with the major investment and the ongoing strategic investment in resources to deliver more profitable future growth. After charging net finance costs of £0.3m (2023: £0.3m) and tax of £0.1m (2023: £0.1m), the Group reported a loss of £0.2m (2023: profit of £0.5m). Basic earnings per share were (0.56p) (2023: 1.27p).

 

Operating cash flows before movements in working capital were Â£0.7m (2023: Â£1.2m). Working capital movements increased in the period to £1.6m (2023: £0.5m) predominantly due to an increase in inventory as a result of the sales shortfall in the second quarter. Appropriate action is being taken to reduce inventory levels through the course of the second half of the year with the aim of introducing a more efficient and cash generative strategy. Capital expenditure increased to £1.3m (2023: £0.9m) as the major investment in the Group's manufacturing facility commenced.

 

Net cash (cash less loans and borrowings) decreased to £1.3m (2023: £2.7m). The Group has access to further liquidity of £1.0m via its unutilised overdraft facility (2023: £1.0m). The Group has also taken the decision to divest its investment property, which has a carrying value of £4.1m.

 

Following the triennial valuation of the defined benefit pension scheme as at 1 July 2023, the Company and the trustees of the pension scheme have agreed in principle to a reasonable and affordable recovery plan to address the scheme's current deficit. At the end of July 2024, the Company made an initial contribution of £0.3m to the scheme.

 

Current Trading and Outlook

There has been an encouraging start to the third quarter, with positive trading in both July and August coupled with a strong order book. The Group's commitment to innovation and sustainability remains steadfast, with several new product launches scheduled for the second half of the year.

 

The Group's short term priority is the installation and commissioning of the new equipment at its manufacturing facility, which is pivotal to the transformation of the business. The Group will maintain its focus on cash preservation and will therefore not be proposing an interim dividend at this time (2023: £nil).

 

The Board anticipates a continued improvement in trading during the second half and the Group is trading in line with the Board's recently revised expectations for the full year.

The Board remains confident in the Group's long-term trading and growth prospects.

 

 

Médéric Payne

Chief Executive Officer

26 September 2024

 

 

 

 

Consolidated Income Statement


6 months ended 30 June 2024


 

Unaudited 6 months ended

 30 June

2024

 

Unaudited 6 months ended

30 June

2023

 

Audited 12 months

ended 31 December

2023


£'000

£'000

£'000

Revenue

9,276

9,825

21,102

Operating costs

(9,239)

(9,301)

(19,788)

Other operating income

178

312

490

Operating profit before valuation gain

215

836

1,804

Unrealised valuation gain

-

-

60

Operating profit

215

836

1,864

Finance income

42

39

72

Finance costs

(325)

(255)

(523)

(Loss)/Profit before taxation

(68)

620

1,413

Taxation

(147)

(130)

(644)

(Loss)/Profit attributable to shareholders of the Group

(215)

490

769

Earnings per share (basic and diluted) for the Group

(0.56p)

1.27p

1.99p

 

 

Consolidated Statement of Comprehensive Income

6 months ended 30 June 2024

 

 


Unaudited

Unaudited

Audited

6 months

6 months

12 months

ended

ended

ended

30 June

30 June

31 December

2024

2023

2023

£'000

£'000

£'000

(Loss)/Profit attributable to shareholders of the Group

(215)

490

769

Items that will not be reclassified to profit or loss

Actuarial gain/(loss) recognised in the pension scheme

1,709

 

513

(3,281)

Related deferred taxation

(427)

(128)

820


1,282

385

(2,461)

Items that will be reclassified subsequently to profit or loss when specific conditions are met

Revaluation of property

 

 

-

 

 

-

315

Related deferred taxation

-

-

(79)


-

-

236

Total other comprehensive income/(loss)

1,282

385

(2,225)

Total comprehensive income/(loss) attributable to shareholders of the Group

1,067

 

875

(1,456)

 

 

 

 

 

Consolidated Balance Sheet


as at 30 June 2024


 

Unaudited 30 June

2024

 

Unaudited 30 June

2023

 

Audited 31 December

2023


£'000

£'000

£'000

Non-current assets




Property, plant and equipment

7,429

5,976

6,379

Intangible assets

61

59

65

Investment property

4,060

4,000

4,060

Right-of-use asset

1,053

754

1,413

Deferred tax asset

841

763

895


13,444

11,552

12,812

Current assets




Inventories

7,620

6,560

5,753

Trade and other receivables

2,565

2,871

3,156

Cash and cash equivalents

2,814

4,919

5,758


12,999

14,350

14,667

Total assets

26,443

25,902

27,479

Current liabilities




Trade and other payables

(3,438)

(3,986)

(3,795)

Provisions

-

(74)

-

Lease liabilities

(187)

(127)

(183)

Loans and borrowings

(742)

(736)

(739)


(4,367)

(4,923)

(4,717)

Non-current liabilities




Deferred tax

(1,653)

(1,144)

(1,439)

Pension deficit

(3,509)

(1,000)

(4,972)

Lease liabilities

(292)

(140)

(287)

Loans and borrowings

(747)

(1,489)

(1,119)


(6,201)

(3,773)

(7,817)

Total liabilities

(10,568)

(8,696)

(12,534)

Net assets

15,875

17,206

14,945

Equity




Called up share capital

10,339

10,339

10,339

Share premium account

504

504

504

Own Shares

(1,454)

(1,805)

(1,636)

Share-based payment reserve

225

--80

150

Capital redemption reserve

3,617

3,617

3,617

Revaluation reserve

3,376

3,096

3,376

Retained earnings

(732)

1,375

(1,405)

Total equity

15,875

17,206

14,945

 

 

Consolidated Cash Flow Statement


6 months ended 30 June 2024


 

Unaudited 6 months ended 30 June

2024

 

Unaudited 6 months ended

30 June

2023

 

Audited 12 months

ended 31 December

2023


£'000

£'000

£'000

Cash flow from operating activities




 (Loss)/Profit for the period

(215)

490

769

Depreciation

221

165

374

Depreciation of right-of-use assets

168

124

279

Amortisation

18

15

33

Movement in provision

-

(3)

(77)

Share-based payment expense

75

80

150

Net finance costs

283

216

451

Unrealised valuation gain

-

-

(60)

Tax charge

147

130

644

Operating cash flows before movements in working capital

697

1,217

2,563

(Increase)/decrease in inventory

(1,867)

(665)

142

Decrease/(increase) in trade and other receivables

591

(520)

(807)

(Decrease)/increase in trade and other payables

(349)

670

479

Net cash generated from operating activities

(928)

702

2,377

Cash flows from investing activities




Payments to acquire intangible fixed assets

(14)

(4)

(27)

Payments to acquire tangible fixed assets

(1,279)

(868)

(1,166)

Net cash used in investing activities

(1,293)

(872)

(1,193)

Cash flows from financing activities


 

 

Interest paid on lease liabilities

(14)

(5)

(17)

Interest paid on borrowings

(65)

(82)

(160)

Interest received

42

39

72

Principal paid on lease liabilities

(105)

(66)

(156)

Equity dividends paid

(212)

(193)

(193)

Repayment of loans

(369)

(366)

(734)

Net cash used in financing activities

(723)

(673)

(1,188)

Net decrease in cash and cash equivalents

(2,944)

(843)

(4)

Cash and cash equivalents at start of the period

5,758

5,762

5,762

Cash and cash equivalents at end of the period

2,814

4,919

5,758

 

Consolidated Statement of Changes in Equity

6 months ended 30 June 2024

 

 

Share capital

Share premium account

 

Own Shares

Share-based

payment reserve

Capital redemption

reserve

 

Revaluation

reserve

Profit and loss account

Total equity

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2023              10,339

504

(2,000)

-

3,617

3,096

888

16,444

Comprehensive income

 

 

 

 

 

 

 

for the year








Profit for the year                         -

-

-

-

-

-

769

769

Remeasurement of the net








defined benefit liability             -

-

-

-

-

-

(2,461)

(2,461)

Revaluation of property                -

-

-

-

-

315

(79)

236

Total comprehensive

income for the year                  -

 

-

 

-

 

-

 

-

 

315

 

(1,771)

 

(1,456)

Contributions by and distributions to owners

Dividend paid

-                 -                 -

-                 -                 -                (193)

(193)

Share-based payment

-                 -                 -

150               -                 -                 -

150

Own share transfer Revaluation reverse

transfer

-                 -             364

 

-                 -                 -

-                 -                 -           (364)

 

-                 -             (35)              35

-

 

-

Total contributions by and distributions to owners

 

 

-

 

 

-

 

 

364

 

 

150

 

 

-

 

 

(35)

 

 

(522)

 

 

(43)

At 31 December 2023

 

 

 

 

 

 

 

 

and 1 January 2024      10,339

504

(1,636)

150

3,617

3,376

(1,405)

14,945

Comprehensive income for the period

Loss for the period                        -

Remeasurement of the net

defined benefit liability              -

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

-

 

-

 

 

(215)

 

1,282

 

 

(215)

 

1,282

Total comprehensive

income for the period              -

 

-

 

-

 

-

 

-

 

-

 

1,067

 

1,067

Contributions by and distributions to owners









Dividend paid                                -

-

-

-

-

-

(212)

(212)

Share-based payment                   -

-

-

75

-

-

-

75

Own shares transfer                    -

-

182

-

-

-

(182)

-

Total contributions by and distributions to

owners                                       -

 

 

-

 

 

182

 

 

75

 

 

-

 

 

-

 

 

(394)

 

 

(137)

At 30 June 2024                  10,339

504

(1,454)

225

3,617

3,376

(732)

15,875

 

Notes to the Financial Statements

 

1. BASIS OF PREPARATION AND ACCOUNTING POLICIES

The financial information for the six months ended 30 June 2024 and the six months ended 30 June 2023 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 2023 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 2023. These policies are set out in the annual report and accounts for the period ended 31 December 2023 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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