Half Yearly Report

RNS Number : 6476Z

Airea PLC

20 March 2012

 



Review of Operations

Introduction

The company has again faced challenging market conditions in the first six months of the current financial year. However, good progress has been made on a number of strategic objectives including the ongoing rationalisation of surplus leased properties, the launch of new Burmatex branding and product ranges and an improvement in earnings per share.

Residential sector sales continue to be affected by fragile customer demand and a depressed high street.  Contract volumes held up well, despite severe cut-backs in retail refurbishment programmes, due to the successful launch of new products and a positive reaction to the new branding.  The relocation of Ryalux backing operations to facilitate the vacation of leasehold properties at Heywood, Lancashire has been successfully completed, but the associated cost along with dilapidation commitments led to a short term depletion of cash resources.

Group results

Revenue for the period was £13.9m (2010:£15.1m).  The operating profit was £139,000 (2010: £349,000) and the profit after tax was £114,000 (2010: £94,000).  Basic earnings per share were 0.25p (2010: 0.20p).

Operating profit came under pressure as raw material inflation worked through into margin; an improvement in pension related finance costs led to an increase in profit after tax and growth in earnings per share.

Operating cash flows before movements in working capital were £716,000 (2010: £941,000).  Working capital increased by £580,000 (2010: £1,186,000) due to seasonal timing issues.  Outflows relating to items already provided for totalled  £645,000 (2010: £401,000) and largely related to costs associated with the exit from leasehold properties at Heywood.  Contributions to the defined benefit pension scheme totalled £300,000 (2010: £300,000) and capital expenditure of £566,000 (2010: £396,000) was focussed on the investment required to complete the move out of the Heywood properties along with the enhancement of tufting capability.  

Current trading and future prospects

There is little sign of an improvement in the trading environment.  The second half should see the benefit of an improved market share and a number of sales and operational initiatives.  However, based on the results of the first half and ongoing uncertainty in the markets we serve, the board have decided that it would be imprudent to make a dividend payment at the interim stage.  As stated in the last annual report, the board will keep the dividend policy under review and future dividends will be based upon future levels of profitability and cash flow. 

Enquiries:

Neil Rylance                                                                                                                  01924 266561

Chief Executive Officer

Roger Salt                                                                                                                     01924 266561

Group Finance Director

Robert Beenstock                                                                                                          0203 201 3526

Richard Lindley                                                                                                              0113 241 0148

N+1 Brewin

	Consolidated Income Statement
	6 months ended 31st December 2011
			Unaudited	Unaudited	Audited
			6 months ended	6 months ended	year ended
			31st December	31st December	30th June
			2011	2010	2011
		Note	£000	£000	£000
	Revenue		13,918	15,080	28,904
	Operating costs		(13,779)	(14,731)	(28,396)
	Operating profit after exceptional items		139	349	508
	Analysed between:
	Operating profit before exceptional items		156	514	805
	Exceptional operating costs	1	(17)	(165)	(297)
	Finance income		16	-	-
	Finance costs		-	(160)	(316)
	Profit before taxation		155	189	192
	Taxation		(41)	(95)	(111)
	Profit for the period		114	94	81
	Earnings per share (basic and diluted)	2	0.25p	0.20p	0.18p
	All amounts relate to continuing operations
	Consolidated Statement of Comprehensive Income
	6 months ended 31st December 2011
			Unaudited	Unaudited	Audited
			6 months ended	6 months ended	year ended
			31st December	31st December	30th June
			2011	2010	2011
			£000	£000	£000
	Profit attributable to shareholders of the group		114	94	81
	Actuarial gains recognised in the pension scheme		-	-	3,968
	Related deferred taxation		-	-	(1,091)
	Total comprehensive income for the period		114	94	2,958
	Consolidated Balance Sheet
	as at 31st December 2011		Unaudited	Unaudited	Audited
			31st December	31st December	30th June
			2011	2010	2011
			£000	£000	£000
	Non-current assets
	Property, plant and equipment		7,653	7,862	7,482
	Deferred tax asset		839	2,001	876
			8,492	9,863	8,358
	Current assets
	Inventories		8,148	7,024	8,723
	Trade and other receivables		3,915	4,308	4,475
	Cash and cash equivalents		1,542	2,430	3,048
			13,605	13,762	16,246
	Total assets		22,097	23,625	24,604
	Current liabilities
	Trade and other payables		(4,442)	(3,518)	(6,157)
	Provisions		(173)	(830)	(482)
			(4,615)	(4,348)	(6,639)
	Non-current liabilities
	Provisions		-	(100)	(54)
	Pension deficit		(951)	(5,379)	(1,267)
	Deferred tax		(149)	(163)	(145)
			(1,100)	(5,642)	(1,466)
	Total liabilities		(5,715)	(9,990)	(8,105)
			16,382	13,635	16,499
	Equity
	Called up share capital		11,561	11,561	11,561
	Share premium account		504	504	504
	Capital redemption reserve		2,395	2,395	2,395
	Share option reserve		16	16	16
	Profit and loss account		1,906	(841)	2,023
			16,382	13,635	16,499
	Consolidated Cash Flow Statement
	6 months ended 31st December 2011		Unaudited	Unaudited	Audited
			6 months ended	6 months ended	year ended
			31st December	31st December	30th June
			2011	2010	2011
		Note	£000	£000	£000
	Operating activities
	Cash used in operations	3	(809)	(946)	(144)
	Investing activities
	Purchase of property, plant and equipment		(566)	(396)	(605)
	Proceeds on disposal of property, plant and equipment		100	-	25
			(466)	(396)	(580)
	Financing activities
	Equity dividends paid		(231)	-	-
	Net decrease in cash and cash equivalents		(1,506)	(1,342)	(724)
	Cash and cash equivalents at start of period		3,048	3,772	3,772
	Cash and cash equivalents at end of period		1,542	2,430	3,048
	Consolidated Statement of Changes in Equity
	6 months ended 31st December 2011
			Share capital	Share premium account	Capital redemption reserve	Share option reserve	Profit and loss account	Total equity
			£000	£000	£000	£000	£000	£000
	At 1st July 2010		11,561	504	2,395	5	(935)	13,530
	Total comprehensive income for the period		-	-	-	-	94	94
	Share based payment		-	-	-	11	-	11
	At 1st January 2011		11,561	504	2,395	16	(841)	13,635
	Total comprehensive income for the period		-	-	-	-	2,864	2,864
	At 1st July 2011		11,561	504	2,395	16	2,023	16,499
	Total comprehensive income for the period		-	-	-	-	114	114
	Dividend paid		-	-	-	-	(231)	(231)
	At 31st December 2011		11,561	504	2,395	16	1,906	16,382
	Notes
1	EXCEPTIONAL OPERATING COSTS
	The exceptional costs of £17,000 (6 months ended 31st December 2010: £165,000, year ended 30th June 2011: £297,000) are severance payments relating to the streamlining of the operating business.
2	EARNINGS PER SHARE
	The calculation of basic and adjusted earnings per share is based on the following data:
	Number of shares
			Unaudited	Unaudited	Audited
			6 months ended	6 months ended	year ended
			31st December	31st December	30th June
			2011	2010	2011
	Ordinary shares for the purpose of basic earnings per share		46,242,455	46,242,455	46,242,455
	Earnings
			Unaudited	Unaudited	Audited
			6 months ended	6 months ended	year ended
			31st December	31st December	30th June
			2011	2010	2011
			£000	£000	£000
	Group results:
	Earnings		114	94	81
	Exceptional operating costs (net of tax)		17	119	215
	Adjusted earnings		131	213	296
	Group earnings per share
			Unaudited	Unaudited	Audited
			6 months ended	6 months ended	year ended
			31st December	31st December	30th June
			2011	2010	2011
	Basic adjusted (pence per share)		0.28	0.46	0.64
	Basic (pence per share)		0.25	0.20	0.18
	Diluted EPS
All options in issue at 30 June 2011 and 31 December 2011 were non-dilutive.
3	RECONCILIATION OF PROFIT FOR THE PERIOD TO NET CASH USED IN OPERATIONS
			Unaudited	Unaudited	Audited
			6 months ended	6 months ended	year ended
			31st December	31st December	30th June
			2011	2010	2011
			£000	£000	£000
	Profit for the period		114	94	81
	Share based payment		-	11	11
	Tax charged		41	95	111
	Finance (income)/costs		(16)	160	316
	Depreciation		577	581	1,163
	Profit on disposal of property, plant and equipment		-	-	(18)
	Operating cash flows before movements in working capital		716	941	1,664
	Increase in working capital		(580)	(1,186)	(413)
	Decrease in provisions		(645)	(401)	(795)
	Contributions to defined benefit pension scheme		(300)	(300)	(600)
	Net cash used in operations		(809)	(946)	(144)
4	BASIS OF PREPARATION AND ACCOUNTING POLICIES
	The financial information for the six month periods ended 31st December 2011 and 31st December 2010 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 30th June 2011 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 year ended 30th June 2011.  These policies are set out in the annual report and accounts for the year ended 30th June 2011 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.

 

END

 

 

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