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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Airsprung Group | LSE:APG | London | Ordinary Share | GB0000119940 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 30.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number : 6693X Airsprung Furniture Group PLC 27 June 2008 AIRSPRUNG FURNITURE GROUP PLC Preliminary Results for the year ended 31 March 2008 Chairman's Statement Results Profit before tax on ordinary activities for the year ended 31 March 2008 rose to £1.464 million compared with the previous year's £847,000. Profit after tax attributable to equity holders reflected a tax charge of £42,000, compared with the prior year's partial release of deferred taxation. Shareholders' equity increased to £11.4 million from £7.2 million one year earlier. Group turnover rose to £49.9 million against the previous year's £45.3 million, the second consecutive annual increase of more than 10%. Although gross margins fell by one percentage point to 28.5% of sales, operating profit before financing increased to £1.52 million compared with £991,000. Operating profit before finance and adjustments relating to the pension scheme rose to £1.07 million compared to the previous year's £853,000, an increase of 25%. Net cash at the year-end stood at £1.67 million against £1.99 million. Shortly before the year-end, the Group announced it would be resuming interest payments to holders of its 655,000 cumulative 10% preference shares. Operating review Airsprung Beds, the Group's largest business by volume, had another creditable performance in challenging market conditions. Sales rose strongly for the second successive year in spite of intense price competition in the marketplace. Trading margins came under further pressure as the business had to contend with sharp increases in the prices of steel, foam and diesel fuel, which it was initially unable to pass on to customers. Nevertheless, the continuing sales growth and improved manufacturing, distribution and buying efficiencies brought about a further rise in operating profits for the year. Over recent years, the Group has made significant progress in outsourcing from overseas, which has helped contain prices and maintain competitiveness, but lead times for such programmes are longer, giving rise to greater pressure on working capital. Group inventories rose over the year to £4.3 million compared with the prior year's £3.5 million, reflecting this factor and the increased sales level. After Gainsborough's strong performance the previous year, when it was fulfilling start-up orders for a major department store group, this division just failed to maintain its sales, and operating profits fell slightly. The business is continuing to invest in innovative products and a new range of foam-based mattresses was well received by the trade towards the year-end. Cavendish Upholstery, based in Chorley, had a poor year. This business supplies independent furniture retailers, a sector which has found itself under increasing pressures in the marketplace. The division suffered an operating loss in deteriorating market conditions. Towards the end of the year, Cavendish won floor space for a new designer range of upholstered furniture with a national department store group, but this came too late in the year to have a material effect on profitability. Airofreem, the Group's foam conversion business, again produced a good result, due to the high volumes going through Group businesses and growing demand from external customers. The division invested in a new computerised cutting system which is now operational, and will provide greater flexibility and lower unit costs. In order to improve the return on the Chorley site, a new foam processing facility has been established there to make more productive use of space and provide competitively priced foam components for the Cavendish business. Airsprung Beds also took over part of the same facility to provide forward assembly of mattresses at a reduced distribution cost. These initiatives are now operational. Arena Design Associates, which supplies high quality graphic design and marketing support services to both Group businesses and external companies, made an improved contribution to group profits. Property The Group's application for outline planning consent for the 2.9 hectare Brick Lane Business Park was successful. A raw materials store is now available for external letting and some enquiries have been received. However, in view of the current weakness in the industrial property market, no further expenditure has been authorised on any refurbishment or building works on the site. During the year, the Group discussed with the Trustees of the Airsprung Retirement and Death Benefits Plan various changes in management and investment policy, which were then implemented. The actuarial deficit fell at the end of the year to £2.9 million from the previous year's £6.2 million, partly due to the favourable impact of corporate bond rates. Some of these improvements are purely technical and may be reversed in later periods. Nevertheless, the general progress in reducing the deficit is encouraging. Directors and staff I would like to express my thanks and that of the board to Tony Lisanti, Chief Executive, and Tean Dallaway, Finance Director, for leading the management teams to another positive result, and to the executives and staff who have contributed with energy and commitment to the year's outturn. I would also like to thank our two non-executive directors John Newman and Stephen Yates for their helpful and wise advice during the year. Outlook During the past three months, there has been a serious deterioration in the market sectors in which the Group is involved. The negative impacts of the sub-prime mortgage crisis and the subsequent credit squeeze have led to a fall in consumer spending and marked weakness in the residential property market, both of which affect the sales of beds, mattresses and furniture. Meanwhile, the prices of raw materials and fuel have increased sharply. Price rises announced over the period include cumulative increases for steel of 80%, petrochemical-derived foam of 25% and diesel fuel of 25%. It is essential for the stability of the manufacturing industry on which they depend that major retailers recognise commodity prices on this scale cannot be absorbed by their suppliers and must be reflected in their own pricing to consumers. Group sales for the first quarter will be significantly down on 2008, with falls in volumes and average selling prices. Sales and profits for the first half-year are likely to be well down on the previous year's comparable period. For the year as a whole, sales will be dependent on the restoration of disposable incomes, consumer confidence and housing activity. Every effort is being made by our management teams to secure price increases, but gross margins will remain under pressure. The Group's restructuring over recent years has given it greater flexibility and improved control over operational efficiencies. This has enabled it to respond to current market pressures by reducing controllable costs. The board believes the present difficulties will be temporary and that the Group will emerge from them satisfactorily, but there are no grounds for believing the current year's trading results will match the progress of the recent past. Stuart Lyons CBE Chairman 27 June 2008 For further information, please contact: Tony Lisanti, Chief Executive of Airsprung Furniture Group PLC 01225 754411 Mike Coe, Blue Oar Securities Plc 0117 933 0020 Consolidated income statement for the year ended 31 March 2008 12 months 12 months to to 31.03.08 31.03.07 £000 £000 Revenue 49,920 45,252 Cost of sales (35,705) (31,912) Gross profit 14,215 13,340 Operating costs (13,145) (12,487) IAS 19 pension movement 450 138 Operating profit before financing 1,520 991 Finance income 18 36 Finance costs (74) (180) Profit before tax 1,464 847 Income tax (42) 620 Profit attributable to equity holders of the parent 1,422 1,467 Basic earnings per share 6.0p 6.1p Diluted earnings per share 5.6p 5.8p All the above figures relate to continuing operations. Consolidated balance sheet At 31 March 2008 31.03.08 31.03.07 £000 £000 Property, plant and equipment 8,754 8,689 Deferred tax 578 620 Total non-current assets 9,332 9,309 Inventories 4,349 3,507 Trade and other receivables 7,723 7,916 Cash and cash equivalents 1,672 1,986 Total current assets 13,744 13,409 Total assets 23,076 22,718 Called up share capital 2,389 2,389 Share premium account 2,348 2,348 Reserves 2,399 2,380 Retained earnings 4,301 65 Total equity 11,437 7,182 Obligations under finance leases 145 22 Shares classed as financial liabilities - 655 Pension scheme deficit 2,927 6,207 Total non-current liabilities 3,072 6,884 Trade and other payables 7,912 8,652 Shares classed as financial liabilities 655 - Total current liabilities 8,567 8,652 Total liabilities 11,639 15,536 Total equity and liabilities 23,076 22,718 Consolidated cash flow statement For the year ended 31 March 2008 2007/2008 2006/2007 £000 £000 Profit before tax 1,464 847 Adjustments for: Depreciation 542 643 Interest expense 56 144 Contributions to defined benefit pension scheme (450) (138) Charge for share based payments 19 21 Profit on sale of tangible fixed assets - (4) Operating cash flows before movements in working 1,631 1,513 capital (Increase) in inventories (842) (2) Decrease/(increase) in receivables 193 (866) (Decrease)/increase in payables (599) 1,451 Cash generated from operations 383 2,096 Non-equity dividends and appropriations paid (198) - Interest paid (8) (22) Net cash from operating activities 177 2,074 Investing activities Interest received 2 36 Proceeds on disposal of property, plant and equipment - 7 Purchase of property, plant and equipment (607) (173) Repayment of loan - 112 Net cash inflow/(outflow) from investing activities (605) (18) Financing activities Increase in borrowing 197 - Payment of finance lease liabilities (83) (96) Net cash outflow from financing activities 114 (96) Net (decrease)/increase in cash and cash equivalents (314) 1,960 Cash and cash equivalents at beginning of period 1,986 26 Cash and cash equivalents at end of period 1,672 1,986 Consolidated statement of recognised income and expense For the year ended 31 March 2008 2007/2008 2006/2007 £000 £000 Profit for the period 1,422 1,467 Actuarial gain on defined benefit pension scheme 2,814 649 Total recognised income and expense for the period 4,236 2,116 Notes for the year ended 31 March 2008 1 The financial information has been prepared using the accounting policies set out in the Interim Report. 2 This summary of results does not constitute the statutory financial statements for the year ended 31 March 2008. The financial statements have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. The statutory accounts for the year ended 31 March 2008 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies. The financial information for the year ended 31 March 2007 has been extracted from the full report and statements which were prepared under UK GAAP and converted to International Financial Reporting Standards (IFRS) as adopted by the European Union. Those accounts were filed with the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under s.237 (2) or (3) Companies Act 1985. 3 Transition to IFRS - the board have closely reviewed the financial statements and do not believe there to be any effect on the income statement or balance sheet items from the point of transition (1 April 2006) to the balance sheet date of the transition to IFRS. The board have identified two areas where the treatment under IFRS will be different to the policy previously employed: - Freehold land and buildings were held at a 1997 valuation under the transitional provision of FRS 15 "Tangible fixed assets". This revalued amount has been deemed to be the cost under the transitional provisions of IFRS 1. As a result there has been no adjustment to the carrying value of the amount previously reported under FRS 15 "Tangible fixed assets". The revaluation reserve has been transferred into the profit and loss reserve. - The Group uses foreign currency swaps to manage its foreign currency exposure. These instruments should be recognised at fair value under IAS 39. There were no instruments in effect at the transition date, or at 31 March 2007. At 31 March 2008 the fair value of these swaps was £13,000. This was considered immaterial by the directors and has not been reflected in the financial statements. 4 Total continuing turnover includes turnover generated in the United Kingdom of £49.3 million (2007: £44.7 million) and export sales of £0.6.million (2007: £0.6 million). All profit is generated from activities located in the United Kingdom. 5 The profit per ordinary share has been calculated on 23,889,000 ordinary shares (2007: 23,889,000) being the weighted average number of shares in issue during the period. The diluted earnings per share has been calculated on 25,425,000 ordinary shares (2007: 25,427,000) after adjusting the weighted average number of shares in issue during the period by the shares options in existence during the period. This information is provided by RNS The company news service from the London Stock Exchange END FR FKAKPABKDOAB
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