Airea sees progress but treads carefully

The Wakefield-based company, whose carpets are popular with rock stars and footballers, said revenues in the year to the end of June fell by 10.1m to 30.9m.

Around 6.5m of this was put down to quitting loss-making contracts and shrinking the domestic product range.

It made a 427,000 pre-tax profit compared with a 9m loss a year earlier.

Of the remaining business, sales to the residential sector fell by 14.8 per cent and to the contract sector by 6.7 per cent.

The operating result before exceptional items was a profit of 900,000 compared to a loss of 500,000 in the same period last year.

The company said it still remains to be seen what the long term effect of UK public sector expenditure cuts will have on the UK economy as a whole.

Demand for household goods could be particularly affected.

Chief executive Neil Rylance said: "We remain optimistic but prudent in terms of strict control of cash resources.

"The board have concluded that it would not be appropriate to propose a final dividend, but remains committed to introducing a progressive dividend policy when circumstances allow."

The group has been through some of the most difficult market conditions for many years.

Airea's residential Ryalux brand has benefited from a revamp of its ranges and investment in new point-of-sale displays.

Airea also has a commercial business, Burmatex, which fits out larger buildings ranging from schools to office blocks.