Half Yearly Report

RNS Number : 5329Z

Airea PLC

08 March 2013

 



AIREA plc

Interim Results for the Six Months Ended 31 December 2012

Review of Operations

Introduction

Airea plc has delivered an increase in profitability and a healthy improvement in its cash position during the first six months of the current financial year, despite the challenging market conditions that persisted in all of its major markets.  In addition, good progress continues to be made in strengthening our strategic position with a number of successful product launches completed in the period.

Residential sector sales were once again adversely affected by fragile customer demand.  However, contract volumes held up well due to significant progress in a number of overseas markets, and the success of new product introductions.  Improved sales margins have been driven by tight management of pricing policy, along with a strengthening of the sales mix through investment in new products with higher added value and the substitution of out-sourced products by in-house manufacture.  The relentless drive for cost reduction and efficiency improvements has added significantly to profitability, and we are now benefiting from the property footprint reduction and factory reorganisation completed last year.

Group results

Revenue for the period was £13.5m (2011: £13.9m).  The operating profit before exceptional items was £404,000 (2011: £156,000).  The operating profit after charging exceptional operating costs of £45,000 (2011: £17,000) was £359,000 (2011: £139,000).  After charging pension related finance costs of £89,000 (2011: income £16,000) and incorporating the appropriate tax charge the net profit for the period was £176,000 (2011: £114,000).  Basic adjusted earnings per share were 0.45p (2011: 0.28p) and basic earnings per share were 0.38p (2011: 0.25p).

Operating profit benefited from improved sales margins and cost reduction.  The increase in pension related finance costs arose from the reassessment of the pension deficit as disclosed in the last annual report. 

Operating cash flows before movements in working capital were £929,000 (2011: £716,000).  Working capital reduced by £1,317,000 (2011: increase £580,000) due to tight control of inventory.  Expenditure on onerous leases was negligible (2011: outflow £645,000) and contributions to the defined benefit pension scheme reduced to £217,000 (2011: £300,000) in line with the agreement reached with the scheme trustees following the last triennial valuation as at 1^st July 2011.  Capital expenditure of £134,000 (2011: £566,000) was focussed on essential replacements and productivity improvements.  

Current trading and future prospects

Whilst we can foresee little change in the trading environment in the near future, we are well placed to make further progress in the second half of our financial year based on the ongoing development of our product offer, the continuing strengthening of our trading network, particularly overseas, and ongoing cost reduction programmes.  Whereas we are encouraged by the prospects for the business, and the improvement in the cash position, we feel it is right to maintain a prudent approach.  As a result the board has decided that any dividend payment should be judged in the light of the financial performance for the year as a whole, and consequently we will not be making a dividend payment at the interim stage.

Enquiries:

Neil Rylance                                                                                                                  01924 266561

Chief Executive Officer

Roger Salt                                                                                                                     01924 266561

Group Finance Director

Richard Lindley                                                                                                              0113 388 4789

N+1 Singer

	Consolidated Income Statement
	6 months ended 31st December 2012
			Unaudited	Unaudited	Audited
			6 months ended	6 months ended	year ended
			31st December	31st December	30th June
			2012	2011	2012
		Note	£000	£000	£000
	Revenue		13,521	13,918	26,276
	Operating costs		(13,162)	(13,779)	(25,925)
	Operating profit after exceptional items		359	139	351
	Analysed between:
	Operating profit before exceptional items		404	156	423
	Exceptional operating costs	1	(45)	(17)	(72)
	Finance income		-	16	32
	Finance costs		(89)	-	-
	Profit before taxation		270	155	383
	Taxation		(94)	(41)	(114)
	Profit for the period		176	114	269
	Earnings per share (basic and diluted)	2	0.38p	0.25p	0.58p
	All amounts relate to continuing operations
	Consolidated Statement of Comprehensive Income
	6 months ended 31st December 2012
			Unaudited	Unaudited	Audited
			6 months ended	6 months ended	year ended
			31st December	31st December	30th June
			2012	2011	2012
			£000	£000	£000
	Profit attributable to shareholders of the group		176	114	269
	Actuarial losses recognised in the pension scheme		-	-	(7,572)
	Related deferred taxation		-	-	1,931
	Total comprehensive income/(loss) for the period		176	114	(5,372)
	Consolidated Balance Sheet
	as at 31st December 2012		Unaudited	Unaudited	Audited
			31st December	31st December	30th June
			2012	2011	2012
			£000	£000	£000
	Non-current assets
	Property, plant and equipment		6,872	7,653	7,308
	Deferred tax asset		2,495	839	2,589
			9,367	8,492	9,897
	Current assets
	Inventories		7,501	8,148	8,661
	Trade and other receivables		3,467	3,915	4,659
	Cash and cash equivalents		3,090	1,542	1,342
			14,058	13,605	14,662
	Total assets		23,425	22,097	24,559
	Current liabilities
	Trade and other payables		(4,304)	(4,442)	(5,339)
	Provisions		(64)	(173)	(26)
			(4,368)	(4,615)	(5,365)
	Non-current liabilities
	Pension deficit		(8,129)	(951)	(8,257)
	Deferred tax		(41)	(149)	(41)
			(8,170)	(1,100)	(8,298)
	Total liabilities		(12,538)	(5,715)	(13,663)
			10,887	16,382	10,896
	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
	Retained earnings		(3,589)	1,906	(3,580)
			10,887	16,382	10,896
	Consolidated Cash Flow Statement
	6 months ended 31st December 2012		Unaudited	Unaudited	Audited
			6 months ended	6 months ended	year ended
			31st December	31st December	30th June
			2012	2011	2012
		Note	£000	£000	£000
	Operating activities
	Cash generated from/(used in) operations	3	2,067	(809)	(867)
	Investing activities
	Purchase of property, plant and equipment		(134)	(566)	(708)
	Proceeds on disposal of property, plant and equipment		-	100	100
			(134)	(466)	(608)
	Financing activities
	Equity dividends paid		(185)	(231)	(231)
	Net increase/(decrease) in cash and cash equivalents		1,748	(1,506)	(1,706)
	Cash and cash equivalents at start of period		1,342	3,048	3,048
	Cash and cash equivalents at end of period		3,090	1,542	1,342
	Consolidated Statement of Changes in Equity
	6 months ended 31st December 2012
			Share capital	Share premium account	Capital redemption reserve	Share option reserve	Retained Earnings	Total equity
			£000	£000	£000	£000	£000	£000
	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 1st January 2012		11,561	504	2,395	16	1,906	16,382
	Total comprehensive income for the period		-	-	-	-	(5,486)	(5,486)
	At 1st July 2012		11,561	504	2,395	16	(3,580)	10,896
	Total comprehensive income for the period		-	-	-	-	176	176
	Dividend paid		-	-	-	-	(185)	(185)
	At 31st December 2012		11,561	504	2,395	16	(3,589)	10,887
	Notes
1	EXCEPTIONAL OPERATING COSTS
	The exceptional costs of £45,000 (6 months ended 31st December 2011: £17,000, year ended 30th June 2012: £72,000) are severance payments relating to the ongoing streamlining of the 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
			2012	2011	2012
	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
			2012	2011	2012
			£000	£000	£000
	Group results:
	Earnings		176	114	269
	Exceptional operating costs (net of tax)		34	17	54
	Adjusted earnings		210	131	323
	Group earnings per share
			Unaudited	Unaudited	Audited
			6 months ended	6 months ended	year ended
			31st December	31st December	30th June
			2012	2011	2012
			pence	pence	pence
	Basic adjusted		0.45	0.28	0.70
	Basic		0.38	0.25	0.58
	Diluted EPS
	All options in issue at 30 June 2012 and 31 December 2012 were anti-dilutive.
3	RECONCILIATION OF PROFIT FOR THE PERIOD TO NET CASH GENERATED FROM OPERATIONS
			Unaudited	Unaudited	Audited
			6 months ended	6 months ended	year ended
			31st December	31st December	30th June
			2012	2011	2012
			£000	£000	£000
	Profit for the period		176	114	269
	Tax charged		94	41	114
	Finance costs /(income)		89	(16)	(32)
	Depreciation		570	577	1,140
	Loss on disposal of property, plant and equipment		-	-	39
	Operating cash flows before movements in working capital		929	716	1,530
	Decrease/(increase) in working capital		1,317	(580)	(940)
	Increase/(decrease) in provisions		38	(645)	(907)
	Contributions to defined benefit pension scheme		(217)	(300)	(550)
	Net cash generated from/(used in) operations		2,067	(809)	(867)
4	BASIS OF PREPARATION AND ACCOUNTING POLICIES
	The financial information for the six month period ended 31st December 2012 and 31st December 2011 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 2012 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 2012.  These policies are set out in the annual report and accounts for the year ended 30th June 2012 which is available on the company's website at www.aireaplc.co.uk.

 

END

 

 

IR KMGGFNNLGFZM