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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
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 | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 30.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMAPG
RNS Number : 7567J
Airsprung Group PLC
05 July 2011
AIRSPRUNG GROUP PLC
Unaudited Preliminary Results for the year ended 31 March 2011
Financial and operational highlights
Airsprung Group PLC is a leading UK manufacturer of beds, mattresses and sofa beds selling under the Airsprung, Gainsborough, Hush and Hush-a-Bye brands. The Group's upholstery businesses manufacture and sell upholstery under the Collins & Hayes and Cavendish brands. In addition, the Group runs Airofreem foam conversion and Arena graphic design businesses. The Group supplies catalogue and internet retailers, multiple and independent retailers, and contract customers.
- Group sales GBP45 million
- Profit before tax and before exceptional items GBP0.9 million
- Profit before tax GBP0.5 million
- Dividend of 0.6p recommended
- Acquisition of Collins and Hayes Furniture Limited
- Pension deficit reduced by GBP1.2 million to GBP2.5 million
- Cash balance GBP1.7 million at year end
Stuart Lyons, Chairman, referring to financial year 2011/12 said:
"The outturn for the year as a whole will be dependent on the timing and pace of any economic recovery. In the meantime, management are continuing to take steps to maintain gross margins while reducing costs through operating efficiencies and internal restructuring. The directors regard the current trading challenges as short term and remain confident in the prospects for the Group."
For further information please contact:
Airsprung
Tony Lisanti, Chief Executive 01225 779114
finnCap
Marc Young (Corporate Finance) 0207 600 1658
Simon Starr (Corporate Broking) 0207 600 1658
AIRSPRUNG GROUP PLC
Preliminary Results for the year ended 31 March 2011
Chairman's Statement
Results and dividend
Sales for the year ended 31 March 2011 were GBP44.9 million, compared with the prior year's GBP46.5 million, a 4% reduction following the previous year's 9% increase. Underlying profit before tax and after crediting net finance income for the Group fell to GBP0.9 million compared with GBP1.0 million in 2010 as a result of the continued challenging trading conditions experienced by the Group as a whole. Reported profit on ordinary activities before taxation was GBP0.5 million reflecting three factors which are discussed in the course of this statement: market conditions, the restructuring of the Group's upholstered furniture interests and the expenses associated with the acquisition of Collins and Hayes. The directors recommend a maintained dividend of 0.6p per share payable on 19 October 2011 to shareholders on the register at 23 September 2011. The corresponding ex-dividend date is 21 September 2011.
Sector performance
The board considers that the Group operates in two market sectors; beds and other activities, and the accounts show the performance of each sector.
Group sales on a like for like basis fell by nearly 10% in the year and showed a sharp deterioration in trading conditions in the final quarter, with a rise in VAT accompanied by appalling winter weather conditions, and further pressures on disposable incomes which came into focus as the Chancellor's March Budget statement approached. Our sector suffered worse than many, as the purchase of beds and furniture is easily deferred and the squeeze on spending was felt particularly severely by middle and lower income families.
Beds
The economic difficulties hit different sub-sectors in different ways. Our Gainsborough business performed creditably in the middle and upper parts of the bed and sofa-bed markets. Airsprung Beds, however, had a mixed performance; much of its business remained solid and it continued to find new opportunities, but it experienced a very sharp fall in demand from a single major customer, which more than offset its successes.
Management took vigorous action to reduce labour costs in the bed companies in line with demand. The policy of using temporary labour for less skilled work allowed Airsprung Beds to reduce its workforce at little cost. Raw material and fuel prices were relatively stable compared with the prior year, and any increases were offset by the use of substitute materials and price increases to customers. Consequently, Group gross margins were satisfactorily maintained as a percentage of turnover.
Despite the temporary setbacks, Airsprung Beds continued to expand its reach. It won important business from major new entrants into the bed market, which augurs well for the future, and successfully launched a new range of Airsprung branded pillows and duvets in the UK market. The licensing agreement for bed and mattress manufacture and distribution in the USA was renewed by our client for a further three years from September 2011 on satisfactory terms.
Other activities
The Group has four business activities outside the bed sector. These are Airofreem, Arena Design, Collins & Hayes and Cavendish Upholstery.
The same reduction in demand seen by the Beds sector also affected Airofreem, the Group's foam conversion business, which did well to hold up its business overall. Our design group Arena performed well, winning new accounts and increasing its earnings on sales which were appreciably ahead of the previous year.
In December 2010, the Group acquired Collins and Hayes Furniture Limited and its trading brand Collins & Hayes, whose origins go back more than 130 years. This business is a manufacturer and distributor of high-quality upholstered furniture, based in St Leonards--on--Sea near Hastings in East Sussex. It produces beautifully designed upholstered furniture, and its customers include some of the most respected departmental and multiple stores in the UK.
The directors approved an initial cash payment for the acquisition of GBP2.1 million, plus a sum of up to GBP250,000 held in escrow to deal with any post acquisition warranty claims. The consideration has been funded by a new four-year revolving credit facility of GBP2.5 million at 2.5% over LIBOR. The board is confident that the acquisition will strengthen our presence in the furniture sector and create valuable synergies with other businesses within the Group.
The board has been concerned for some time at the performance of the Group's upholstered furniture business Cavendish, which operates from Chorley in Lancashire. The upholstered furniture sector should in theory provide a natural extension of Airsprung's business and provide a sensible and profitable diversification. The fashion element in upholstery fabrics and the short lines of supply and distribution mean that there should always be a solid position in the UK market for domestic manufacturers. However, Cavendish has underperformed in its traditional independent market and not made profitable headway in its mass-market initiatives.
Following the acquisition of Collins & Hayes, the Group has now embarked on a major restructuring of the Cavendish operations in Lancashire, with a view to reducing its cost base and increasing its efficiency, quality and productivity. Three directors of Cavendish are leaving the business, as well as about 24 staff and operatives from a total of 66. I would like to thank all of them for their past service.
Provided Cavendish is restored as a viable business, its financial administration will be integrated with the Group headquarters in Trowbridge, while operations, sales and marketing will be linked with Collins & Hayes. This programme will be kept under close review, and other business models may be used if necessary.
Financial impacts
From the acquisition date to the March year end, Collins & Hayes achieved sales of GBP2.9 million. The difficult trading conditions, already referred to, resulted in an operating profit of GBP15,000 before a bad debt write-off of GBP20,000 as a result of an unexpected retailer insolvency; these goods were sold under retention of title and recovered after the year end. The costs relating to the acquisition at GBP200,000 were as budgeted and have been charged to the profit and loss account.
The total costs of the Cavendish restructuring are approximately GBP200,000 all of which has been expensed in the profit and loss account as operating costs for the year under review.
The impact of these charges on the Group's consolidated accounts has been somewhat softened by a credit of GBP173,000 as finance income compared with a charge of GBP76,000 in the previous year. This has arisen as a consequence of the assumptions used by the Group pension scheme actuary which also impact the Group's pension deficit, which fell from GBP3.6 million to GBP2.5 million. It is important to remember that this, essentially theoretical, credit reflects a notional assessment of a fluctuating long-term liability.
Prior to exceptional costs and finance adjustments, the underlying operating profit for the Group was GBP0.8 million compared with GBP1.1 million in 2010.
Shareholders will note that the Group's cash position at the end of March was GBP1.7 million compared with GBP2.4 million in 2010. This reduction does not arise from the acquisition, but reflects new terms of trading with a major customer. The 2009 comparative was just under GBP1.5 million.
Directors and staff
I would like to thank all the Group's employees for their efforts in an exceptionally challenging year and, particularly, to welcome the management, staff and workforce of Collins & Hayes to the Airsprung Group. I thank our executive board members Tony Lisanti and Tean Dallaway for their considerable efforts on behalf of the shareholders, and our non-executives John Newman and Stephen Yates for their support and counsel.
Outlook
The current year has started slowly with weak consumer spending for the reasons outlined earlier in this statement. Our retail customers have experienced a difficult first quarter which has been followed by further weakness in the second quarter. This has impacted all of the Airsprung Group businesses. Our smaller business units are performing creditably in tough conditions; Airsprung Beds, however, has suffered a further downturn in sales attributable to continued poor trading by a major customer. Against this the Group has benefited from the sales of the newly acquired Collins & Hayes. Consequently, Group sales at the half year are expected to be ahead of the prior year.
Profits to date in the first half year have been level with those of 2010, thanks to vigorous actions taken by management. However, profits for the rest of the first half are likely to fall short, reflecting the deteriorating demand at Airsprung Beds. The outturn for the year as a whole will be dependent on the timing and pace of any economic recovery. In the meantime, management are continuing to take steps to maintain gross margins while reducing costs through operating efficiencies and internal restructuring. The directors regard the current trading challenges as short term and remain confident in the prospects for the Group.
Stuart Lyons CBE
Chairman
5 July 2011
Consolidated income statement for the year ended 31 March 2011
12 months 12 months to 31.3.11 to 31.3.10 GBP000 GBP000 -------------------------------------------------- ------------ ------------ Revenue 44,861 46,532 -------------------------------------------------- ------------ ------------ Cost of sales (31,778) (33,129) -------------------------------------------------- ------------ ------------ Gross profit 13,083 13,403 -------------------------------------------------- ------------ ------------ Operating costs (12,710) (12,329) -------------------------------------------------- ------------ ------------ Operating profit before financing 373 1,074 -------------------------------------------------- ------------ ------------ Operating profit is analysed as: Before depreciation, amortisation and exceptional items Depreciation and 1,377 1,691 amortisation (604) (617) Operating profit before exceptional items 773 1,074 Exceptional operating items (400) - -------------------------------------------------- ------------ ------------ Finance income 173 - -------------------------------------------------- ------------ ------------ Finance costs (62) (96) -------------------------------------------------- ------------ ------------ Profit before tax 484 978 -------------------------------------------------- ------------ ------------ Income tax (125) (218) -------------------------------------------------- ------------ ------------ Profit attributable to equity holders of the parent 359 760 -------------------------------------------------- ------------ ------------ Basic earnings per share 1.5p 3.2p -------------------------------------------------- ------------ ------------ Diluted earnings per share 1.4p 3.0p -------------------------------------------------- ------------ ------------
All the above figures relate to continuing operations.
Consolidated statement of comprehensive income for the year ended 31 March 2011
2010/2011 2009/2010 GBP000 GBP000 ------------------------------------------------ ---------- ---------- Profit for the period 359 760 ------------------------------------------------ ---------- ---------- Other comprehensive income: ------------------------------------------------ ---------- ---------- Actuarial gain/(loss) on defined benefit pension scheme 709 (1,946) ------------------------------------------------ ---------- ---------- Total comprehensive income/(expense) for the period attributable to equity shareholders 1,068 (1,186) ------------------------------------------------ ---------- ----------
All the above figures relate to continuing operations
Consolidated balance sheet at 31 March 2011
31.03.11 31.03.10 GBP000 GBP000 ------------------------------ --------- --------- Intangible assets 1,776 236 ------------------------------ --------- --------- Property, plant and equipment 7,943 7,856 ------------------------------ --------- --------- Deferred tax 99 295 ------------------------------ --------- --------- Total non-current assets 9,818 8,387 ------------------------------ --------- --------- Inventories 4,333 3,293 ------------------------------ --------- --------- Trade and other receivables 9,358 7,776 ------------------------------ --------- --------- Cash and cash equivalents 1,735 2,405 ------------------------------ --------- --------- Total current assets 15,426 13,474 ------------------------------ --------- --------- Total assets 25,244 21,861 ------------------------------ --------- --------- Called up share capital 2,389 2,389 ------------------------------ --------- --------- Share premium account 2,348 2,348 ------------------------------ --------- --------- Reserves 3,066 3,065 ------------------------------ --------- --------- Retained earnings 3,120 2,195 ------------------------------ --------- --------- Total equity 10,923 9,997 ------------------------------ --------- --------- Financial liabilities 2,557 153 ------------------------------ --------- --------- Pension scheme deficit 2,451 3,683 ------------------------------ --------- --------- Total non-current liabilities 5,008 3,836 ------------------------------ --------- --------- Trade and other payables 7,693 7,764 ------------------------------ --------- --------- Financial liabilities 1,620 264 ------------------------------ --------- --------- Total current liabilities 9,313 8,028 ------------------------------ --------- --------- Total liabilities 14,321 11,864 ------------------------------ --------- --------- Total equity and liabilities 25,244 21,861 ------------------------------ --------- ---------
Consolidated cash flow statement for the year ended 31 March 2011
2010/2011 2009/2010 GBP000 GBP000 ----------------------------------------------------- ---------- ---------- Profit before tax 484 978 ----------------------------------------------------- ---------- ---------- Adjustments for: ----------------------------------------------------- ---------- ---------- Depreciation 543 583 ----------------------------------------------------- ---------- ---------- Amortisation 61 34 ----------------------------------------------------- ---------- ---------- Interest (income)/expense (111) 96 ----------------------------------------------------- ---------- ---------- Contributions to defined benefit pension scheme (350) (366) ----------------------------------------------------- ---------- ---------- Charge for share based payments 1 - ----------------------------------------------------- ---------- ---------- Profit on sale of property, plant and equipment (7) (23) ----------------------------------------------------- ---------- ---------- Operating cash flows before movements in working capital 621 1,302 ----------------------------------------------------- ---------- ---------- Decrease/(increase) in inventories 35 (136) ----------------------------------------------------- ---------- ---------- Decrease/(increase) in receivables 202 (1,040) ----------------------------------------------------- ---------- ---------- Increase/(decrease) in payables (1,428) 1,510 ----------------------------------------------------- ---------- ---------- Cash (used in)/generated from operations (570) 1,636 ----------------------------------------------------- ---------- ---------- Taxation paid (77) - ----------------------------------------------------- ---------- ---------- Interest paid (62) (20) ----------------------------------------------------- ---------- ---------- Net cash (used in)/generated from operating activities (709) 1,616 ----------------------------------------------------- ---------- ---------- Investing activities ----------------------------------------------------- ---------- ---------- Acquisition (2,243) (113) ----------------------------------------------------- ---------- ---------- Proceeds on disposal of property, plant and equipment 9 46 ----------------------------------------------------- ---------- ---------- Purchase of property, plant and equipment (349) (200) ----------------------------------------------------- ---------- ---------- Net cash outflow from investing activities (2,583) (267) ----------------------------------------------------- ---------- ---------- Financing activities ----------------------------------------------------- ---------- ---------- Dividends paid (143) (120) ----------------------------------------------------- ---------- ---------- Increase in borrowing 3,328 - ----------------------------------------------------- ---------- ---------- Repayment of loan (514) (244) ----------------------------------------------------- ---------- ---------- Payment of finance lease liabilities (49) (49) ----------------------------------------------------- ---------- ---------- Net cash inflow/(outflow) from financing activities 2,622 (413) ----------------------------------------------------- ---------- ---------- Net (decrease)/increase in cash and cash equivalents (670) 936 ----------------------------------------------------- ---------- ---------- Cash and cash equivalents at beginning of period 2,405 1,469 ----------------------------------------------------- ---------- ---------- Cash and cash equivalents at end of period 1,735 2,405 ----------------------------------------------------- ---------- ----------
Consolidated statement of changes in equity for the year ended 31 March 2011
Shares Capital Share Share to be redemption Retained Total capital premium issued reserve earnings equity GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 -------------- -------- -------- -------- ----------- --------- -------- Balance 1 April 2009 2,389 2,348 65 3,000 3,501 11,303 -------------- -------- -------- -------- ----------- --------- -------- Dividends - - - - (120) (120) -------------- -------- -------- -------- ----------- --------- -------- Transactions with owners - - - - (120) (120) -------------- -------- -------- -------- ----------- --------- -------- Profit for the period - - - - 760 760 -------------- -------- -------- -------- ----------- --------- -------- Other comprehensive income: -------------- -------- -------- -------- ----------- --------- -------- Actuarial loss on defined benefit pension scheme - - - - (1,946) (1,946) -------------- -------- -------- -------- ----------- --------- -------- Total comprehensive income for the period - - - - (1,186) (1,186) -------------- -------- -------- -------- ----------- --------- -------- Balance 31 March 2010 2,389 2,348 65 3,000 2,195 9,997 -------------- -------- -------- -------- ----------- --------- -------- Balance 1 April 2010 2,389 2,348 65 3,000 2,195 9,997 -------------- -------- -------- -------- ----------- --------- -------- Dividends - - - - (143) (143) -------------- -------- -------- -------- ----------- --------- -------- Employee benefits - - 1 - - 1 -------------- -------- -------- -------- ----------- --------- -------- Transactions with owners - - 1 - (143) (142) -------------- -------- -------- -------- ----------- --------- -------- Profit for the period - - - - 359 359 -------------- -------- -------- -------- ----------- --------- -------- Other comprehensive income -------------- -------- -------- -------- ----------- --------- -------- Actuarial gain on defined benefit pension scheme - - - - 709 709 -------------- -------- -------- -------- ----------- --------- -------- Total comprehensive income for the period - - - - 1,068 1,068 -------------- -------- -------- -------- ----------- --------- -------- Balance 31 March 2011 2,389 2,348 66 3,000 3,120 10,923 -------------- -------- -------- -------- ----------- --------- --------
Notes for the year ended 31 March 2011
1 This summary of results does not constitute the statutory financial statements for the year ended 31 March 2011 within the meaning of Section 434 of the Companies Act 2006. 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 2011 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 2010 has been extracted from the full report and statements which were prepared under 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 s498 of the Companies Act 2006.
2 Total continuing turnover includes turnover generated in the United Kingdom of GBP44.3 million (2010: GBP46.0 million) and export sales of GBP0.5 million (2010: GBP0.5 million).
3 The profit per ordinary share has been calculated on 23,889,000 ordinary shares (2010: 23,889,000) being the weighted average number of shares in issue during the period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UGURAMUPGGRC
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