TIDMAIEA
RNS Number : 4497V
Airea PLC
05 April 2023
5 April 2023
AIREA plc
("AIREA", the "Group" or the "Company")
Final Results
AIREA plc (AIM: AIEA), the UK design-led specialist flooring
company, supplying both the UK and international markets, is
pleased to announce its final results for the twelve months ended
31 December 2022.
Financial summary
-- Group revenue increased by 16.5% to GBP18.5m ( 2021: GBP15.9m )
-- Operating profit before valuation gain increased by 25.8% to GBP1.7m ( 2021: GBP1.3m )
-- Profit before tax up 11.0% to GBP1.4m ( 2021: GBP1.3m )
-- Cash and cash equivalents increased to GBP5.8m ( 2021: GBP5.7m )
-- Net cash increased by 53.0% to GBP2.8m (2021: GBP1.9m)
-- Final dividend of 0.5p per ordinary share (2021: 0.4p)
Operational highlights
-- Appointment of Médéric Payne, Chief Executive Officer, in August 2022.
-- Launch of sustainability principles, eco2matters to focus on
improving all aspects of the Group's impact on the environment and
society.
-- Employee Share Scheme relaunched to a wider employee pool to
help drive long-term performance.
Post-period end
-- First carbon neutral flooring range arctic was launched in early 2023.
Médéric Payne, Chief Executive Officer of AIREA plc,
commented:
" I am pleased to report on the Group's final results for the
twelve months ended 31 December 2022.
" AIREA has made continued progress and maintained a high
standard of service to our customers, with improved revenue growth
of 16.5%, even in the face of economic challenges. Despite the
inflationary cost pressures the Group experienced throughout the
financial year, we maintained our margins and balance sheet
strength.
"The launch of our sustainability principles, eco2matters, along
with our product range and carbon-neutral flooring, focuses on the
way we will improve the Group's impact on the environment and
society. These principles play an important role in driving the
inherent long-term values of the Group and we are confident in our
commitment to our ESG strategy.
"We have made progress in our energy efficiency and the Group
will continue to explore alternative methods to improve that
further.
"Demand is starting to recover to pre-pandemic levels, as we
have identified further export growth opportunities.
"With our focused strategy, whilst leveraging the Burmatex (R)
brand , we are building a strong platform for growth to deliver
continued progress for AIREA and returns to its shareholders."
- Ends -
For further information please contact:
AIREA plc Tel: +44 (0) 192 426 6561
Médéric Payne, Chief Executive
Officer
Ryan Thomas, Chief Financial Officer
Singer Capital Markets Tel: +44 (0) 20 7496 3000
(Nominated Adviser and Sole Broker)
Peter Steel / Sam Butcher
Yellow Jersey PR Tel: +44 (0) 20 3004 9512
(Financial media and PR)
Sarah Hollins / Shivantha Thambirajah
/ Jazmine Clemens
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) 596/2014 as
amended by regulation 11 of the Market Abuse (Amendment) (EU Exit)
Regulations 2019/310. With the publication of this announcement,
this information is now considered to be in the public domain.
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(R) is one of the UK's leading
designers and manufacturers of commercial carpet tiles and planks.
Burmatex(R) 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/.
Chairman's Statement
Overview
The Group is pleased to report the continued progress from the
impacts of the COVID-19 pandemic, where there has been a recovery
in demand both in our home and export markets. We do, however, have
some key markets that continue to be negatively impacted by the
ongoing conflict in Ukraine.
Our continued efforts to enhance our operational and supply
chain processes have helped manage the impact of the unprecedented
increases in the prices of raw materials, energy and availability
of labour. Where possible, increased costs have been mitigated
through cost-saving initiatives, consumption reduction actions or
increased onward pricing.
The Group continues to maintain its cash reserves and strong
balance sheet position to enable us to invest in the future of the
business and manage the impact of the continued economic
uncertainty and related risks.
Results
AIREA has delivered good revenue growth in the year following
the recovery from the COVID-19 pandemic. Underlying volumes remain
below pre-pandemic levels with price increases and sales mix being
the major contributory factors of the 16.5% revenue growth. The
Group's operating profit margins have been maintained despite the
increases in raw materials, labour and energy costs.
Dividends
The Group has been cash generative in the period and plans to
continue to invest in the future of the business. We also believe
in rewarding our loyal shareholder base and therefore propose a
final dividend of GBP0.2m or 0.5p per share for FY22, also
representing the total dividend for the year as no interim dividend
was paid (2021: GBP0.2m or 0.4p per share). The final dividend will
be paid on 18 May 2023 to shareholders on the register on 21 April
2023. This proposal is subject to shareholder approval at the
Group's Annual General Meeting to be held on 10 May 2023.
Environmental, Social and Governance (ESG)
ESG is fundamental to the continued commercial success of AIREA,
as evidenced in our values, our actions and our products. We have
made excellent progress in 2022 through the launch of our
sustainability principles, eco2matters, which have been laid out to
highlight our ongoing commitment in anchoring our business to a
sustainable ethos. The Group's focus is, and will continue to be,
the promotion of trade responsibility and the active pursuit of
achieving a Net Zero business.
We have begun work on the installation of solar panels on the
roof of our factory and warehouse as the implementation of this
investment is believed to help protect us against energy price
volatility, whilst contributing to our sustainable goals.
Our Board
The Board appointed Médéric Payne as Chief Executive Officer and
as a member of the Board of Directors on 25 August 2022. Médéric
brings his extensive leadership, commercial, supply chain and
marketing expertise to the role with a passion for developing
people.
The Board's composition continues to evolve based on the
required level of skills and experience alongside ensuring the
business operates efficiently and is able to react quickly to any
issues that may arise.
Our People
We recognise the hard work and dedication of our staff
throughout the year and sincerely thank them for the continued
contribution they make towards the future of AIREA.
The employee share scheme that was launched in 2019 has lapsed,
with none of the 2.8 million shares being held in the employee
benefit trust ("EBT") vesting. The scheme has been re-launched to a
wider employee pool as the Board recognises the need to retain and
reward members of staff for long-term performance. The scheme
incentivises employees through nil cost share awards. Awards will
vest with beneficiaries over a three-year period ending 31 December
2025 after the achievement of the Group and individual performance
conditions.
Outlook
The development of our product ranges is exciting with the
launches of new sustainable products and the refresh of existing
products with a drive towards sustainability whilst refreshing the
colour and design including as appropriate switching to a better
more sustainable yarn.
We launched our first carbon neutral range arctic, which has
been well received in the market and thus fulfilling the demands of
our existing customers.
Even though the Ukrainian conflict has adversely impacted some
of our key export markets, the Group has been able to recover in
both our UK and export market, along with identifying further
export growth opportunities.
We are pleased that cost pressures are beginning to ease and
stabilise, however, it should be noted that the cost increases
experienced during 2022 will be felt in 2023. In managing these
cost pressures, we have taken mitigating actions including the
installation of solar panels, increased onward pricing and a
continued focus on waste reduction.
Summary
We are optimistic that the Group has been able to minimise our
cost pressures and inflationary headwinds in 2022 to ensure margins
and profitability are maintained. The Group made significant
progress in our ESG ambitions through creating a point of
distinction and competitive advantage through the launch of our
eco2matters principle as this will be the foundation to help drive
AIREA shareholder growth for FY23 and beyond.
Martin Toogood
Chairman
4 April 2023
Chief Executive Officer's Statement
Introduction
2022 for AIREA started off with the sad passing of Neil Rylance,
former Chief Executive Officer, in March 2022. Whilst the situation
may have caused some initial uncertainty, a recruitment process was
put in place and I feel privileged to have taken the role in August
2022 to continue the legacy that Neil achieved.
AIREA has faced many price pressures throughout the year, not
least the increase in energy prices which triggered a focused
response in trying to address the opportunities available in
reducing energy usage across our business. We have made progress
towards improving our energy efficiency and the Group is looking to
explore alternative methods to improve that further. I am confident
that the team will rise to those challenges.
The increasing cost pressures have resulted in us passing on
some price increases to customers. However, we have sought to do
this in keeping with our value of principles in being honest,
transparent and providing notice as early as possible of
forthcoming price changes.
As noted in the Chairman's statement, demand is beginning to
recover to pre-pandemic levels, with further opportunities in our
export markets which we have identified as being key areas of
growth.
Products and Planet
Our product offering continues to develop with sustainability,
design and quality being key to our success, we have developed our
first Carbon neutral range arctic which launched at the beginning
of 2023, with more yet to come. Our eco2matters sustainability
principles were launched as we focus on improving all aspects of
the way we impact the environment and society.
Our efforts in this area have been well received in the market,
particularly by the specifier and architect communities.
People
2022 saw the launch of our new values across the organisation as
part of our transformation project of putting our people at the
heart of our business, empowering, encouraging and inspiring them
to deliver the products to our customers whilst contributing to
protecting our planet. These are the fundamentals for us to succeed
as a team, driving sustainable shareholder value.
Summary and Outlook
The results for FY22 have shown AIREA is able to continuously
provide a high standard of service to our customers, even in the
face of economic challenges. As referred to in the Chairman's
statement, we have maintained our margins and stable balance
sheet.
The Group has a number of opportunities that we are looking to
explore, notably on products that are commercially more
sustainable, a more customer-orientated business, new markets and
appropriate investment to improve manufacturing capabilities.
We are confident in our commitment to our ESG strategy which
will deliver shareholder returns in due course. With our focused
strategy, we are building a strong platform for growth within the
commercial flooring market and will leverage the value of the
Burmatex(R) brand.
Finally, we would like to thank everyone associated with the
AIREA Group for their support during the period.
Médéric Payne
Chief Executive Officer
4 April 2023
Chief Financial Officer's Review
Group Results
Revenue increased 16.5% year on year to GBP18.5m (2021:
GBP15.9m) with home sales recovering to pre-pandemic levels. Our
access to some export markets has been impacted by the Ukraine
conflict. We are, however, seeing recovery in markets outside this
region . Operating profit before property valuation gain
nevertheless increased to GBP1.7m (2021: GBP1.3m). Gross profit
margins increased marginally year on year despite the cost
pressures experienced.
There was no unrealised valuation gain /(loss) on the investment
property in the year (2021: GBP0.3m gain), with the Group recording
an operating profit after valuation gains of GBP1.7m (2021:
GBP1.6m).
Other finance costs relating largely to borrowing costs were
GBP0.2m (2021: GBP0.3m).
After a tax charge of GBP0.1m primarily due to deferred tax on
property, plant and equipment and changes in the tax rate at which
deferred tax is recognised (2021: GBP0.2m), profit attributable to
shareholders of the Group for the year was GBP1.3m (2021: GBP1.0m).
Earnings per share were 3.36p (2021: 2.70p).
Operating cash flows before movements in working capital and
other payables were GBP1.8m (2021: GBP1.7m). Working capital
increased by GBP0.1m (2021: GBP0.3m increase) following an increase
in trade and other receivables partially offset by a decrease in
inventories coupled with an increase in trade and other payables.
Capital expenditure of GBP0.4m (2021: GBP1.3m) related to the
Group's investment in maintaining the site, plant and
machinery.
The Group had GBP5.8m of cash on hand as of 31 December 2022
(2021: GBP5.7m). In 2021 the Group borrowed GBP2.75m under the
government Coronavirus Business Interruption Loan Scheme, as of 31
December 2022 the amount outstanding was GBP1.9m (2021: GBP2.4m).
The Group fully repaid the long-term loan which was taken out to
acquire shares for the Employee Benefit Trust. The Group has access
to further liquidity of GBP1.0m via our unutilised banking facility
(2021: GBP1.0m unutilised).
The Group has GBP2.8m of net cash as of 31 December 2022 (2021:
GBP1.9m).
The value of our investment property was maintained in the
year.
The defined benefit pension scheme deficit increased from an
unrecognised surplus of GBP5.1m to a deficit of GBP1.3m. The
Group's contributions to the scheme were GBPnil (2021: GBP0.4m)
based on the latest agreed schedule of contributions between the
Group and the scheme's trustees. There continues to be volatility
in global equity markets with the scheme's investment strategy
constantly under review to mitigate the scheme's long-term risk
profile as much as possible.
Key performance indicators
As part of its internal financial control procedures the Board
monitors the key financial metrics of revenue, operating profit,
gross margin, working capital (debtor and creditor days), inventory
turns and cash. These KPIs are reviewed in comparison to the
previous year and the budget and analysis undertaken to establish
trends and variances. For the year ended 31 December 2022,
operating profit return on sales was 8.9% (2021: 8.3%), return on
net operating assets was 8.3% (2021: 6.7%) and working capital to
sales percentage was 52.8% (2021: 57.7%).
Ryan Thomas
Chief Financial Officer
4 April 2023
Consolidated Income Statement
for the year ended 31 December 2022
Year Year
ended 31 ended 31
December December
2022 2021
GBP000 GBP000
------------------------------------- -------------------- -------------------
Continuing Operations
Revenue 18,483 15,865
Operating costs (17,111) (14,832)
Other operating income 280 280
-------------------------------------- -------------------- -------------------
Operating profit before valuation
gain 1,652 1,313
Unrealised valuation gain - 275
-------------------------------------- -------------------- -------------------
Operating profit 1,652 1,588
Finance income 32 8
Finance costs (251) (305)
-------------------------------------- -------------------- -------------------
Profit before taxation 1,433 1,291
Taxation (138) (249)
-------------------------------------- -------------------- -------------------
Profit attributable to shareholders
of the Group 1,295 1,042
-------------------------------------- -------------------- -------------------
Basic and diluted earnings per share
for the Group 3.36p 2.70p
-------------------------------------- -------------------- -------------------
Consolidated Statement of Comprehensive
Income
for the year ended 31 December 2022
2022 2022 2021 2021
GBP000 GBP000 GBP000 GBP000
-------------------------------------------- -------- ------- ------- -------
Profit attributable to shareholders of the
Group 1,295 1,042
Items that will not be classified to profit
or loss
Actuarial (loss)/gain recognised in the
pension scheme (1,247) 1,599
Related deferred taxation 318 (380)
-------------------------------------------- -------- ------- ------- -------
Revaluation of Property (25) 166
Related deferred taxation 5 (32)
-------------------------------------------- -------- ------- ------- -------
Total other comprehensive (949) 1,353
(loss)/income
-------------------------------------------- -------- ------- ------- -------
Total comprehensive income attributable
to shareholders of the Group 346 2,395
-------------------------------------------- -------- ------- ------- -------
Consolidated Balance Sheet
as at 31 December 2022
2022 2022 2021 2021
GBP000 GBP000 GBP000 GBP000
------------------------------ ---------------- ---------------- ----------- --------
Non-current assets
Property, plant and equipment 5,272 5,305
Intangible assets 71 55
Investment property 4,000 4,000
Deferred tax asset 917 720
Right-of-use-asset 879 972
------------------------------- ---------------- ---------------- ----------- --------
11,139 11,052
Current assets
Inventories 5,895 6,150
Trade and other receivables 2,351 1,887
Cash and cash equivalents 5,762 5,688
------------------------------- ---------------- ---------------- ----------- --------
14,008 13,725
------------------------------ ---------------- ---------------- ----------- --------
Total assets 25,147 24,777
------------------------------- ---------------- ---------------- ----------- --------
Current liabilities
Trade and other payables (3,316) (3,258)
Provisions (77) (245)
Lease liabilities (131) (124)
Loans and borrowings (734) (935)
------------------------------- ---------------- ---------------- ----------- --------
(4,258) (4,562)
Non-current liabilities
Deferred tax (1,040) (1,031)
Pension deficit (1,345) -
Lease liabilities (202) (183)
Loans and borrowings (1,858) (2,592)
------------------------------- ---------------- ---------------- ----------- --------
(4,445) (3,806)
------------------------------ ---------------- ---------------- ----------- --------
Total liabilities (8,703) (8,368)
------------------------------- ---------------- ---------------- ----------- --------
Net assets 16,444 16,409
------------------------------- ---------------- ---------------- ----------- --------
Equity
Called up share capital 10,339 10,339
Share premium account 504 504
Own Shares (2,000) (555)
Share-based payment reserve - 157
Capital redemption reserve 3,617 3,617
Revaluation reserve 3,096 3,150
Retained earnings 888 (803)
------------------------------- ---------------- ---------------- ----------- --------
Total equity 16,444 16,409
------------------------------- ---------------- ---------------- ----------- --------
Consolidated Statement of Cash Flows
as at 31 December 2022
Year Year
ended 31 December ended 31
2022 December
GBP000 2021
GBP000
--------------------------------------------- ----------------------------- -------------------
Cash flows from operating activities
Profit for the year 1,295 1,042
Depreciation 309 276
Depreciation of right-of-use assets 260 250
Amortisation 29 30
Movement in provisions (168) (220)
Share-based payment expense (157) 16
Net Finance costs 219 297
Tax charge 138 249
Profit on disposal of tangible fixed asset (77) -
Unrealised valuation gain - (275)
---------------------------------------------- ----------------------------- -------------------
Operating cash flows before movements in
working capital 1,848 1,665
Decrease / (Increase) in inventories 255 (528)
Increase in trade and other receivables (464) (152)
Increase in trade and other payables 66 347
---------------------------------------------- ----------------------------- -------------------
Cash generated from operations 1,705 1,332
Contributions to defined benefit pension
scheme - (400)
---------------------------------------------- ----------------------------- -------------------
Net cash generated from operating activities 1,705 932
Cash flows from investing activities
Payments to acquire intangible fixed assets (45) (31)
Payments to acquire tangible fixed assets (312) (1,236)
---------------------------------------------- ----------------------------- -------------------
Receipt from the sale of tangible fixed
assets 77 -
---------------------------------------------- ----------------------------- -------------------
Net cash used in investing activities (280) (1,267)
---------------------------------------------- ----------------------------- -------------------
Cash flows from financing activities
Interest paid on lease liabilities (11) (12)
Interest paid on borrowings (142) (83)
Interest received 32 8
Proceeds from asset financing - 934
Principal paid on lease liabilities (141) (260)
Equity dividend paid (154) -
Repayment of loans (935) (1,119)
---------------------------------------------- ----------------------------- -------------------
Net cash used in financing activities (1,351) (532)
---------------------------------------------- ----------------------------- -------------------
Net increase/(decrease) in cash and cash
equivalents 74 (867)
Cash and cash equivalents at start of the
year 5,688 6,555
---------------------------------------------- ----------------------------- -------------------
Cash and cash equivalents at end of the
year 5,762 5,688
---------------------------------------------- ----------------------------- -------------------
Consolidated Statement of Changes in Equity
as at 31 December 2022
Share
Share based Capital
Share capital premium Own payment redemption Revaluation Retained Total
account Shares reserve reserve reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------- --------------------- ----------------- ---------------- ---------------- ------------------ ------------------- ------------ ------------
As 1 January 2021 10,339 504 (1,197) 141 3,617 3,014 (2,420) 13,998
Comprehensive income
for
the year
Profit for the year - - - - - - 1,042 1,042
Actuarial gain recognised
on the pension scheme - - - - - - 1,219 1,219
Revaluation of property - - - - - 166 (32) 134
----------------------------- --------------------- ----------------- ---------------- ---------------- ------------------ ------------------- ------------ ------------
Total comprehensive income
for the year - - - - - 166 2,229 2,395
Contributions by and
distributions to owners
Share-based payment - - - 16 - - - 16
Own Share Transfer - - 642 - - - (642) -
Revaluation Reserve Transfer - - - - - (30) 30 -
----------------------------- --------------------- ----------------- ---------------- ---------------- ------------------ ------------------- ------------ ------------
Total contributions by
and
distributions to owners - - 642 16 - (30) (612) 16
----------------------------- --------------------- ----------------- ---------------- ---------------- ------------------ ------------------- ------------ ------------
At 31 December 2021
And 1 January 2022 10,339 504 (555) 157 3,617 3,150 (803) 16,409
Comprehensive income
for
the year
Profit for the year - - - - - - 1,295 1,295
Actuarial loss recognised
on the pension scheme - - - - - - (929) (929)
Revaluation of property - - - - - (25) 5 (20)
----------------------------- --------------------- ----------------- ---------------- ---------------- ------------------ ------------------- ------------ ------------
Total comprehensive income
for the year - - - - - (25) 371 346
Contributions by and
distributions to owners
Dividend Paid - - - - - - (154) (154)
Share-based payment - - - (157) - - - (157)
Own Share Transfer - - (1,445) - - - 1,445 -
Revaluation Reserve Transfer - - - - - (29) 29 -
----------------------------- --------------------- ----------------- ---------------- ---------------- ------------------ ------------------- ------------ ------------
Total contributions by
and
distributions to owners - - (1,445) (157) - (29) 1,320 (311)
----------------------------- --------------------- ----------------- ---------------- ---------------- ------------------ ------------------- ------------ ------------
At 31 December 2022 10,339 504 (2,000) - 3,617 3,096 888 16,444
----------------------------- --------------------- ----------------- ---------------- ---------------- ------------------ ------------------- ------------ ------------
In accordance with Rule 20 of the AIM Rules, AIREA confirms that
the annual report and accounts for the year ended 31 December 2022
and notice of Annual General Meeting ("AGM") and related proxy form
will be available to view on the Company's website at :
www.aireaplc.co.uk on 5 April 2023 and will be posted to
shareholders by 18 April 2023. The AGM will be held on 10 May 2023,
at 2.00 p.m. at Victoria Mills, The Green, Ossett, West Yorkshire,
WF5 0AN. Further details are set out in the notice of the AGM
available within the financial statements which can be viewed on
the Group's website.
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FR UPUMWCUPWUAA
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