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;
o sales slowdown
in second quarter
o non-recurring
costs associated with new investment
o 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: £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: £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 £0.7m (2023: £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.