REG - Airea PLC - Final Results for the year ended 31 December 2024
27/03/2025 07:15
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RNS Number : 3636C Airea PLC 27 March 2025
27 March 2025
AIREA plc
("AIREA", the "Group" or the "Company")
Final Results for the year ended 31 December 2024
Strong sales growth in the second half, business transformation nearing
completion
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 2024.
Financial highlights
· Strong sales growth of 6.0% in the second half, recovering from 5.6%
shortfall in first half
· Full year revenue increased by 0.6% to £21.2m (2023: £21.1m)
· Underlying operating profit of £1.6m, excluding non-recurring costs
· Operating profit before valuation gain decreased to £0.7m (2023:
£1.8m), impacted by non-recurring costs of £0.9m
· EBITDA decreased to £1.1m (2023: £2.6m)
· Cash and cash equivalents at £2.1m (2023: £5.8m)
· Coronavirus Business Interruption Loan of £0.9m fully settled in
December 2024
· Final dividend increased by 9.1% to 0.60p per ordinary share (2023:
0.55p)
Operational highlights
· Excellent progress on the strategic investment in the Group's
manufacturing facility
· Business transformation completion in third quarter 2025, with
enhanced Group capabilities and market profile
· Increased focus on innovation and sustainability, highlighted by the
successful launch of two carbon-neutral products, snowfall® and standing
stones® and refresh of balance collection®
· Refresh of low-carbon products in alaska®, academy® and tivoli®
· Strategic review and successful implementation of stockholding
policy, £2.8m stock reduction in second half
Post period end
· Opening of new Dubai sales showroom in January 2025
· Winner at the Yorkshire Business of the Year awards 2025 in
Sustainability category
· Winner at the Made in Yorkshire awards 2025 in the Manufacturer of
the Year (under £25m) category
Médéric Payne, Chief Executive Officer of AIREA plc, commented:
"AIREA had another year of progress in 2024 as the strategic investment in the
manufacturing facility began to take shape, with production expected to come
online in the third quarter 2025. This investment will enable the Group to
increase production, capitalise on efficiencies, and improve quality and
enhance margins, whilst bringing new, more innovative and sustainable products
to the market.
"Following an unforeseen slowdown in the second quarter of the year due to the
global economic and geopolitical challenges, the second half recovered
strongly and delivered 6.0% growth year on year. Full year sales were 0.6%
ahead of prior year, with the UK and ROI outperforming the overall market in
sales volume according to recent market research.
"Our primary focus is the Group's future long-term profitable growth and
during the year we continued to invest in the business with this objective in
mind. Reported operating profit was impacted by non-recurring costs as well as
the programme of investment, however we are satisfied with the underlying
performance of the business during 2024.
"Throughout the year, we also continued to transform the business with a more
focused approach to quality, design, innovation, sustainability and working
closer with our customers. The last twelve months have seen an improvement in
the Group's capabilities and market profile which will leave us
well-positioned to deliver our growth strategy for the business."
- Ends -
For further information please contact:
AIREA plc Tel: +44 (0) 192 426 6561
Médéric Payne, Chief Executive Officer
Conleth Campbell, Chief Financial Officer
Singer Capital Markets Tel: +44 (0) 20 7496 3000
(Nominated Adviser and Sole Broker)
Peter Steel / Sam Butcher
Northstar Communications Tel: +44 (0) 113 730 3896
(Financial media and PR)
Sarah Hollins
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® 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/
(https://aireaplc.com/) .
Chairman's Statement
Overview
The year started well, with strong demand for our carbon-neutral 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 the ongoing economic and geopolitical turbulence. The second half saw a
strong recovery with the UK and ROI delivering 4.5% growth and international
markets growing by 11.8%.
Our focus on innovation and sustainability increased in the year, reflected in
the successful launch of several carbon-neutral products. The Group also
refreshed and relaunched several popular low-carbon ranges.
Results
Following the positive momentum in the second half of the year, the Group
delivered year on year sales growth of 0.6%. As expected, the continued
investment in the Group resulted in a lower operating profit of £0.7m.
Profitability was impacted by certain non-recurring costs associated with the
new manufacturing facility and ongoing investment in people and other
resources to support future profitable growth. Further commentary on these
items is included in the Chief Financial Officer's review.
Significant progress was made in the review and successful implementation of
the Group's stockholding policy, with inventory levels at the end of the year
£2.8m below half year-end and £0.9m lower for the year overall. This was
delivered without impacting customer service and testament to the decisive
action taken by management.
Dividends
The Group prioritised cash management in the year to assist with the funding
of its strategic investment. We continue to believe in rewarding our loyal
shareholder base and therefore propose a final dividend of £0.2m or 0.60p per
share for the year (2023: £0.2m or 0.55p per share), which is the total
dividend for the year as no interim dividend was paid. This is a fourth
consecutive year of dividend growth and is aligned with the Group's
progressive dividend policy. The final dividend will be paid on 21 May 2025 to
shareholders on the register on 22 April 2025. This proposal is subject to
shareholder approval at the Group's Annual General Meeting to be held on 7 May
2025.
Sustainability
Sustainability is central to our strategy and fundamental to delivering future
commercial success for the Group. We continue to believe that what we do
matters. Our sustainability principles, eco(2)matters®, now fully embedded
across the Group, remain key to how we manage all aspects of our business. We
are focused on driving commercial value from our position as a leader of
providing sustainable products to the markets we serve. Our portfolio is
supported by product specific Environmental Product Declarations (EPDs) that
are verified by an independent third party. This enables our customers to
quantify the positive impact our products have on the carbon footprint of
their projects.
The solar panels installed on the roof of the Group's manufacturing facility
are helping to mitigate against energy price volatility, whilst contributing
to our sustainability goals.
Our Board
With the successful appointments over the last few years, the Board has the
experience to provide effective oversight and guidance as AIREA continues its
transformation. The Board remains committed to creating value for
shareholders.
Our People
People are another key element to our strategy. We again recognise the role
our people play in helping the Group achieve its success. Throughout 2024,
with the ongoing disruption of transforming the business, our team again
demonstrated its resilience, adaptability and commitment, and I would like to
share my thanks and appreciation with them all.
The Board recognises the need for continued investment in the training and
development of our people. This is aligned with our commitment to embedding
our values throughout the Group.
In 2022, the long-term share incentive scheme was relaunched to a wider
employee pool as the Board recognised 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 subject to the achievement of both Group and
individual performance conditions.
Summary and Outlook
The Group was pleased with the positive momentum in the second half of the
year. This encouraging performance was delivered despite the ongoing global
economic and geopolitical challenges.
We made further progress in expanding our sustainable portfolio with the
launch of several carbon-neutral products both in the UK and in our key target
overseas markets.
The opening of the Group's new showroom in Dubai in January 2025 is another
example of our investment for future growth. This will operate as a strategic
hub to drive sales across the GCC, MEA regions and India.
The investment in our manufacturing facility is nearing completion and along
with the ongoing transformation of the business, the Group is well placed for
profitable future growth.
These are exciting times for the Group and the Board remains confident in
delivering long-term value for our shareholders.
Martin Toogood
Chairman
26 March 2025
Chief Executive Officer's Statement
Introduction
The business transformation gained momentum as the year progressed. We
continued to invest for future growth and successfully managed the strategic
investment at our manufacturing facility whilst delivering both sales value
and volume growth against a challenging economic and geopolitical backdrop.
The Group experienced strong growth in the second half of the year with sales
6.0% above the prior year, resulting in the full year being 0.6% ahead of
prior year at £21.2m (2023: £21.1m). The UK and ROI delivered 4.5% sales
growth in the second half, finishing the full year 2.4% above the prior year,
compared to a deficit of 0.3% at the half year.
Sales in our international markets grew by 11.8% in the second half, finishing
the full year 5.7% below the prior year, a large improvement on the shortfall
of 21.9% at the half year.
In May 2024, the Group exhibited at the renowned Clerkenwell Design Week. This
was another opportunity to showcase its new innovative and sustainable product
ranges, further strengthen the Burmatex® brand in the market and engage with
our existing and potential new customers. The Group also selectively promoted
its new ranges at overseas exhibitions dedicated to architects, specifiers and
interior designers.
Strong sustainability fundamentals
Over the last few years we have developed our sustainability credentials,
driven by our eco(2)matters® principles.
The renewed focus on design and quality has resulted in a step change in our
product portfolio. The Group's range of carbon-neutral and low-carbon products
has expanded to meet the growing demand from our customers as they quantify
the positive impact these products have on the carbon footprint of their
projects.
In 2024, both snowfall® and standing stones® were launched and balance
collection® refreshed within the carbon-neutral range. In addition, alaska®,
academy® and tivoli® were all refreshed and relaunched in the low-carbon
range.
Sustainability is a key pillar of our strategy and is at the heart of the
Group's growth agenda. We will continue to focus on providing more sustainable
and innovative products to meet our customers' needs.
People
We rely on the commitment, expertise and creativity of our people. Our values
are now firmly embedded across the organisation and are the catalyst for
working as One Team. 2024 saw the introduction of a newly revamped formal
performance appraisal process with annual personal objectives that align with
our values and financial targets.
The Group recognises that the key to future success lies in the skills and
abilities of its people. The continuous development and training of our people
is key to meeting the future demands of our customers, especially in relation
to creativity, innovation and sustainability.
I would like to take this opportunity to thank all of our people for their
continued contribution to the ongoing business transformation and continued
future success of the Group.
Summary and Outlook
Following an unforeseen slowdown in the second quarter, sales recovered
strongly in the second half in both the UK and overseas markets. The Group has
a well-established business model in the UK and is now developing its routes
to market in certain key overseas territories, including Eastern Europe and
the GCC.
As expected, operating profit was lower than the prior year due to the level
of investment in resources to deliver future growth and the impact of
non-recurring costs associated with the transformation. We are excited and
optimistic about the opportunities that the strategic investment in our
manufacturing facility will generate. The new investment will drive production
efficiencies and contribute to future profitable growth.
Médéric Payne
Chief Executive Officer
26 March 2025
Chief Financial Officer's Review
Group Results
One of our main objectives at the beginning of the year was to strengthen the
balance sheet. In this regard, several key initiatives were successfully
executed in the second half of the year. Inventory levels were reduced by
£2.8m to end the year £0.9m lower than December 2023. The outstanding
balance on the Coronavirus Business Interruption Loan of £0.9m was fully
settled in December 2024 and the investment property with a carrying value of
£4.1m is currently being marketed for sale.
Revenue increased 0.6% to £21.2m (2023: £21.1m). There was another strong
performance in the UK and ROI with sales 2.4% ahead of prior year. Following a
disappointing first half, international sales recovered strongly in the second
half and ended the year 5.7% down on the prior year. Demand for our
carbon-neutral and low-carbon products was again strong.
Operating profit before property valuation gain decreased to £0.7m (2023:
£1.8m) due to the impact of certain non-recurring costs and the ongoing cost
of investing for future growth. Excluding these costs, underlying profit was
£1.6m. There was also the impact of product mix on margin as the Group looks
to increase volume by selectively targeting routes to new markets.
The non-recurring costs of £0.9m included;
· an increase in labour and production overheads of £0.6m following
the strategic review and successful implementation of the Group's stockholding
policy
· investment in the new tiling line which resulted in the temporary use
of third-party storage at a cost of £0.1m
· legal expenses of £0.1m in defending a trademark challenge
· professional costs of £0.1m associated with investment in
intellectual property
Additional costs included the investment in a new sales showroom in Dubai,
United Arab Emirates at a cost of £0.2m. In the UK, the sales team was
expanded with a greater focus on architect and design specification projects
at a cost of £0.1m. Investment in other areas included £0.1m in supply chain
and quality which contributed to achieving ISO 14001 and ISO 9001
accreditation. This programme of investment in the business will support the
Group's long-term future profitable growth.
A decision was taken to extend the depreciation period for certain plant and
equipment from ten to fifteen years, which had a £0.4m positive impact on
profit. The new investment will be depreciated over this more appropriate
period of fifteen years. This item has been adjusted for in the calculation of
underlying operating profit.
Net finance costs of £0.6m (2023: £0.5m) increased on the prior year due to
higher costs relating to the pension scheme. The additional costs related to
administration expenses incurred in completing work on the triennial valuation
and subsequent recovery plan, and interest on the net defined benefit
liability.
Taxation decreased to £0.3m (2023: £0.6m) due to a reduction in taxable
profits and deferred taxation. The R&D tax credit claim of £0.1m was in
line with prior year.
The loss attributable to shareholders of the Group for the year was £0.3m
(2023: £0.8m profit). Earnings per share were (0.73p) (2023: 2.0p).
Operating cash flows before movements in working capital and other payables
were £1.2m (2023: £2.6m). Working capital increased by £1.0m (2023: £0.2m
increase) following an increase in trade and other receivables which included
£1.0m in relation to deposits paid to suppliers of key components for the new
manufacturing facility. The strategic review and implementation of the Group's
stockholding policy delivered an inventory reduction of £0.9m on the prior
year. Capital expenditure of £2.2m (2023: £1.2m) predominantly related to
the Group's strategic investment in its manufacturing facility.
The Group had £2.1m of cash on hand as of 31 December 2024 (2023: £5.8m). In
2020, the Group borrowed £2.75m under the government Coronavirus Business
Interruption Loan Scheme. The outstanding balance of £0.9m was settled in
full in December 2024.
In November 2024, the Group secured short-term funding in the form of a trade
finance facility to the value of £3.2m. This funding had not been utilised as
at 31 December 2024. Interest is payable at 2.1% above the Bank of England
base rate. The Group has access to further liquidity of £1.0m via our
unutilised banking facility (2023: £1.0m).
The Group took the decision to divest its investment property, which has a
current carrying value of £4.1m. The property is currently being marketed for
sale.
The deficit on the defined benefit pension scheme reduced by £1.0m to £4.0m.
Following the triennial valuation of the scheme as at 1 July 2023, the Group
and the scheme's trustees agreed a reasonable and affordable recovery plan to
address the scheme's deficit. This was submitted to The Pensions Regulator in
September 2024. The plan included an initial contribution of £0.3m from the
Group to the scheme and this was paid in July 2024. An experienced
professional independent trustee was appointed in July 2024 to assist in
managing the scheme. The trustees are currently in the process of updating the
scheme's investment strategy to further mitigate its 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, underlying 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 2024, underlying operating profit return on sales was 7.4% (2023:
8.5%), return on net operating assets was 3.1% (2023: 8.5%) and working
capital to sales percentage was 28.7% (2023: 24.2%).
Conleth Campbell
Chief Financial Officer
26 March 2025
Consolidated Income Statement
for the year ended 31 December 2024
Year Year
ended 31 December ended 31 December
2024 2023
£000 £000
Revenue 21,234 21,102
Operating costs (20,025) (19,788)
Other operating income 355 490
Underlying operating profit before valuation gain 1,564 1,804
Non-recurring items (911) -
Operating profit before valuation gain 653 1,804
Unrealised valuation gain 40 60
Operating profit 693 1,864
Finance income 69 72
Finance costs (699) (523)
Profit before taxation 63 1,413
Taxation (345) (644)
(Loss) / profit attributable to shareholders of the Group (282) 769
Basic and diluted earnings per share for the Group (0.73p) 1.99p
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2024
2024 2024 2023 2023
£000 £000 £000 £000
(Loss) / Profit attributable to shareholders of the Group (282) 769
Items that will not be classified to profit or loss
Remeasurement of the net defined benefit liability 1,215 (3,281)
Related deferred taxation (378) 820
Revaluation of Property 108 315
Related deferred taxation (27) (79)
Total other comprehensive 918 (2,225)
Income/(loss)
Total comprehensive income/(loss) attributable to shareholders of the Group 636 (1,456)
Consolidated Balance Sheet
as at 31 December 2024
2024 2024 2023 2023
£000 £000 £000 £000
Non-current assets
Property, plant and equipment 8,346 6,379
Intangible assets 46 65
Investment property - 4,060
Deferred tax asset 1,557 1,413
Right-of-use-asset 1,013 895
10,962 12,812
Current assets
Investment property held for sale 4,100 -
Inventories 4,855 5,753
Trade and other receivables 4,335 3,156
Cash and cash equivalents 2,063 5,758
15,353 14,667
Total assets 26,315 27,479
Current liabilities
Trade and other payables (3,111) (3,795)
Lease liabilities (179) (183)
Loans and borrowings (404) (739)
(3,694) (4,717)
Non-current liabilities
Deferred tax (2,334) (1,439)
Pension deficit (4,007) (4,972)
Lease liabilities (244) (287)
Loans and borrowings (500) (1,119)
(7,085) (7,817)
Total liabilities (10,779) (12,534)
Net assets 15,536 14,945
Equity
Called up share capital 10,339 10,339
Share premium account 504 504
Own Shares (1,217) (1,636)
Share-based payment reserve 317 150
Capital redemption reserve 3,617 3,617
Revaluation reserve 3,448 3,376
Retained earnings (1,472) (1,405)
Total equity 15,536 14,945
Consolidated Statement of Cash Flows
For the year ended 31 December 2024
Year Year
ended 31 December ended 31 December
2024 2023
£000 £000
Cash flows from operating activities
(Loss)/profit for the year (282) 769
Depreciation 345 374
Depreciation of right-of-use assets 44 279
Amortisation 33 33
Movement in provisions - (77)
Share-based payment expense 167 150
Net finance costs 630 451
Tax charge 345 644
Unrealised valuation gain (40) (60)
Profit on disposal of tangible fixed asset (6) -
Operating cash flows before movements in working capital 1,236 2,563
Decrease in inventories 898 142
Increase in trade and other receivables (1,179) (807)
(Decrease) / increase in trade and other payables (683) 479
Cash generated from operations 272 2,377
Contributions to defined benefit pension scheme (300) -
Net cash (used) / generated from operating activities (28) 2,377
Cash flows from investing activities
Payments to acquire intangible fixed assets (14) (27)
Payments to acquire tangible fixed assets (2,204) (1,166)
Receipt from the sale of tangible fixed assets 6 -
Interest received 69 72
Net cash used in investing activities (2,143) (1,121)
Cash flows from financing activities
Interest paid on lease liabilities (28) (17)
Interest paid on borrowings (121) (160)
Proceeds from asset financing 661 -
Principal paid on lease liabilities (209) (156)
Equity dividend paid (212) (193)
Repayment of loans (1,615) (734)
Net cash used in financing activities (1,524) (1,260)
Net decrease in cash and cash equivalents (3,695) (4)
Cash and cash equivalents at start of the year 5,758 5,762
Cash and cash equivalents at end of the year 2,063 5,758
Consolidated Statement of Changes in Equity
as at 31 December 2024
Share based payment reserve
Share Capital redemption
Share premium Own reserve Revaluation Retained earnings Total equity
capital account Shares reserve
£000 £000 £000 £000 £000 £000 £000 £000
As 1 January 2023 10,339 504 (2,000) - 3,617 3,096 888 16,444
Comprehensive income for
the year
Profit for the - - - - - - 769 769
year
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 - - 364 - - - (364) -
Revaluation Reserve Transfer - - - - - (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 year
Loss for the - - - - - - (282) (282)
year
Remeasurement of the net defined benefit liability
- - - - - - 837 837
Revaluation of property - - - - - 108 (27) 81
Total comprehensive income -
for the - - - - 108 528 636
year
Contributions by and
distributions to owners
Dividend Paid - - - - - - (212) (212)
Share-based payment - - - 167 - - - 167
Own Share Transfer - - 419 - - - (419) -
Revaluation Reserve Transfer - - - - - (36) 36 -
Total contributions by and
distributions to owners - - 419 167 - (36) (595) (45)
At 31 December 2024 10,339 504 (1,217) 317 3,617 3,448 (1,472) 15,536
In accordance with Rule 20 of the AIM Rules, AIREA confirms that the annual
report and accounts for the year ended 31 December 2024 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 (http://www.aireaplc.co.uk) on
27 March 2025 and will be posted to shareholders by 2 April 2025. The AGM will
be held on 7 May 2025, 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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