Airea’s confidence returns
LUXURY carpet manufacturer Airea has seen its performance improve after stabilising its residential business.
The Wakefield-based firm said today that following a “fundamental” overhaul of its manufacturing operation, the implementation of a cost reduction programme and investment in new products sales in both its divisions were improving.
Earlier this year Airea, which was formerly known as Sirdar, announced losses of £9m for the period December 31, 2008.
It blamed difficult trading conditions on the global economic downturn, which had affected consumer confidence and lending.
As a result of actions taken, the firm has made “excellent progress” against its key objective of stabilising its residential business, which was close to breaking even in the second half of the financial year.
Within continuing operations sales of floor covering products reduced by 15.8% to £41m (2008, £48.7m).
The operating loss was £8.8m (2008 profit, £1.9m) after exceptional operating costs of £4.3m and goodwill impairment of £4m, which completes the write-off of the goodwill relating to the residential floor coverings business.
The operating result before these exceptional items was a loss of £500,000 compared to a profit of the same amount the year before.
Airea said it was pleased that the operating result before exceptional items in the second half of the year was a profit of £400,000 compared to a loss of £100,000 in the previous year.
Losses stood at £9m compared to £3.6m for the same period last year. However, its results include the sale of fixed assets of £9.9m and a loss on disposal of discountinued operations of £2.7m.
Net cash has been almost halved to £2.4m while working capital reduced by £1.7m compared to an increase of £1.9m. Capital expenditure has been slashed from £2.3m to £900,000.
Airea said that despite improvement market conditions remained “extremely challenging” and it didn’t predict any improvement for at least the next 12 months.
However, it said actions taken meant that both its residential and commercial businesses were well placed to withstand further economic uncertainty.
