Airea confident of future despite tough market
HOSTILE market conditions have created a challenging period for flooring manufacturer Airea, which has today posted a fall in profits.
In its interim results for the six months to the end of December 2013, the Ossett-based business posted revenue of £11.6m, down from £13.5m in the same period last year. Operating profit fell to £222,000 from £359,000 and pre-tax profit was down to £24,000 from £270,000.
However, the group said the products it has launched in the first half of its financial year, combined with the work it has been doing in reshaping the salesforce, puts the firm in a stronger competitive position.
The group said: “The six months to December 2013 have been a challenging period for Airea, as we continue to reshape the business towards our goal of sustainable profitable growth against a backdrop of on-going hostile market conditions.
“We stated in the annual report that we could not see any reliable signs of an upturn in market conditions and this continued to be the case throughout the period. Whilst we discerned some marginal improvement in demand for our residential carpet range in the final quarter of the calendar year, this was patchy and volatile. Demand in the contract flooring market remained weak as the non-residential construction sector continued to be subdued. Our revenue reflected this general market picture and was further impacted by timing issues on larger contracts and stocking deals.
“Against this back-ground of weak demand, the business has demonstrated financial resilience. Margin improvement, resulting from the work done on product engineering and price management, and a lower cost base kept the business in profit and we have maintained the financial headroom to allow us to operate debt free.”
Airea said the change in operating profit resulted from a combination of reduced sales volumes improved margins and a lower cost base.
The group added that it continues to make good progress in strengthening the product portfolio and a number of important product launches were successfully completed in the first half from which it can expect to see sales in future periods.