Airea profit falls

UPMARKET carpet manufacturer Airea announced a fall in half-year profit today as market conditions remain “depressed”,

The Wakefield-based group said it continues to face a “volatile” trading environment with a mix of erratic demand and raw material inflation.

For the six months ended December 31, sales fell to £15.1m from £16.7m over the same period the previous year.

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Pre-tax profits dropped to £189,000 from £515,000 while operating profit before exceptional items was £514,000, down from £757,000.

Airea said residential sector sales had been hit by “an extremely weak” performance on the high street. But chief executive Neil Rylance said the firm remained “encouraged” by progress in the sales of new products and the winning of new business with a major multiple retailer, which should start to come on stream in its fourth quarter.

He said raw material price inflation had become a “major factor” in the running of Airea, and that selling prices had to be managed carefully to protect margins.

The company said business wins in new contract markets had “cushioned the dip” in general maintenance and refurbishment work.

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Looking to the future, Mr Rylance said: “The trading environment remains challenging especially in the residential sector with consumer confidence weakening in the face of an increasing tax burden, government cuts and fears over job security.

“We have yet to see how changes in government expenditure will impact demand for floor-coverings in the public sector markets that we serve.

“Increasing raw material prices resulting from commodity price inflation only add to the challenges we face but so far we have been able to pass on appropriate price increases to the market.

“On a more optimistic note against this backdrop of difficult trading conditions we continue to demonstrate our ability to manage costs.”

Airea said it was debt free with a strong balance sheet. Its Poland-based operation, Burmatex Sp z.o.o., achieved sales growth of 50 per cent in that market.

Airea is not paying an interim dividend.

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