Airea pays out dividend as Ryalux closure to increase cash generation

Airea PLC shares skyrocketed by over 25% on Wednesday as the company paid out a 5p special final dividend amid the release of its final results for the 18 month period leading up to 31 December.

Aside from the dividend, the AIM traded flooring company reported a loss before tax for the period of £1.5m, compared with a profit of £1.39m in the 12 months prior, as operating profits before exceptional items fell to £1.2m from £2m.

Airea has proposed the closure of its residential carpets business, which trades as Ryalux Carpets Limited, in an effort to curb losses.

In a statement, Airea said: “The trading environment for residential carpets has worsened and the ongoing trend to cheaper synthetic products has led to further declines in demand for high quality tufted woollen carpets. In the 18 months to 31 December 2017 Ryalux Carpets Limited generated an operating loss before exceptional items of £3.1m on revenue of £9.9 million.”

The company believes that the closure is “likely to be cash generative” as receipts from the realisation of assets are projected to exceed costs associated with the closure process.

The increase in free cash generation resulting from the closure is intended for investment in the company’s “highly profitable” commercial flooring business which is operated under the Burmatex brand.

This business generated an operating profit before exceptional items of £4.3m over the 18 months preceding 31 December and sales of £26.9m over the period.

“The changes we are making to the business and the increased investment in our successful commercial flooring business provides significant opportunities for profitable growth,” the company statement continued.

As of 1013 GMT, Airea’s shares were up 26.00% at 44.10p.