The principal activity of the group is the design, manufacture, marketing and distribution of floor coverings.
The six months ended 30th June 2022 continued to see recovery from the impacts of the COVID-19 pandemic, which had suppressed activity in our key markets. H1 delivered improved sales and operating profit versus the prior year as demand in both our home and export markets continued to recover.
We remain focused on our operational and supply chain processes, which enable us to navigate the challenges from the current economic environment and the Ukrainian conflict both of which continue to put a strain on the availability of labour and raw materials.
The launches of our new products into the market continues with a noted increase in the sales of these products and the continuing specification of our product in the medium and premium sectors.
Net cash (cash less loans and borrowings) increased by £0.3m in the 6 month period to £2.5m as at 30th June 2022 from £2.2m as at 31 December 2021. We continue to have further liquidity available of £1.0m via our unutilised overdraft facility (2021: £1.0m unutilised). Our cash reserves and strong balance sheet enable us to manage the impact of the current economic environment and support our ongoing product development.
Revenue for the period was £8.6m, £1.2m above the prior year (2021: £7.4m). In the UK our sales were 7.5% ahead of the prior six month comparative period as home sales recovered to pre-pandemic levels. Export sales were up 45.5% compared to the comparative period, despite the recovery to date export sales are 26% down on the pre-pandemic levels with the general economic environment continuing to impact trading overseas.
The operating profit was £756,000 (2021: £574,000). Excluding inventory absorption impacts, underlying product margins have come under some pressure versus prior year due to significant raw material inflation. After charging pension, lease and loan related interest costs of £108,000 (2021: £114,000) and incorporating the appropriate tax charge the net profit for the period was £611,000 (2021: £440,000). Basic earnings per share were 1.58p (2021: 1.14p).
Operating cash flows before movements in working capital were £0.8m (2021: £0.5m). Working capital remained relatively stable in the period in spite of the increased prices of raw materials. Contributions to the defined benefit pension scheme were £nil (2021: £0.2m) in line with the agreement reached with the scheme trustees following the last triennial valuation as at 1st July 2020. There was capital expenditure of £0.2m on small enhancements to plant and equipment following the major spend in the previous year (2021: £1.2m).
Update on CEO Replacement
The selection process for our new CEO continues, we have made good progress and expect to be in a position to make an announcement in the coming months.
Read the full report on the Airea Website.