LONDON (ShareCast) - (ShareCast News) - Shares in Airea soared by nearly 40% on Thursday as the designer flooring company reported a significant increase in profits and dividend thanks to growing UK contract sales.
Operating profit for the year ended 30 June increased by 86% to £2m compared to same period last year, due to a rise in UK contract sales and operating margins, despite an adverse currency impact on international sales.

Revenue for the year fell slightly by 3.52% to £24.6m due to euro weakness in the first half.

The second half of the year benefited from reduced costs when the company consolidated two sites at Ossett and Wakefield, which is part of the company's strategy to reduce its property footprint in the last four years, cutting the number of sites from six to two. The consolidation of manufacturing operations cost £1.3m.

The AIM-listed company reduced its pension deficit to £6.7m from £7.4m after a pension increase exchange that resulted in £1.3m of exceptional income.

Cash generation increased, operating profit after exceptional items was about £2.04m and the company said it continued to operate debt free.

Basic earnings per share was up 133% to 3.01p as the company made a further repurchase of shares funded from cash flow.

The company proposed final dividend of 1.5p per share, which was up 67% for the previous year.

Airea said it was investing manufacturing technology and was well positioned for growth as it remains buoyant over the current competitive foreign exchange rate.

"After a number of years of strengthening sterling, we are now enjoying a more competitive exchange rate, which offers potential opportunities to restore growth in our export business, and improve our competitive position against international competition in the home market... Of most concern is the threat of depressed market activity within the construction sector generally which has the potential to overwhelm any price and cost advantages we may enjoy.

"As ever our plans do not assume any help from the market and whilst the board notes the uncertainty arising from the political and economic changes currently taking place, our focus is on exploiting the expanding opportunities that arise from the repositioning of the business over recent years."

Shares in Airea were up 39.53% to 30p at 0913 BST.

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