Airsprung sales slide

Airsprung said today profits for the half-year to end-September were slightly ahead of the prior year period, with profit before tax at £479k, but sales fell 12.8%.

Earnings per share were steady at 1.4p.

Although sales fell by 12.8% reflecting the very difficult retail environment for beds and furniture, the Group said it benefited from a reduction in its direct operating costs and the release of unutilised provision in a prior period.

While operating profit before financing fell by £110,000 to £421,000, the Group recorded £74,000 of favourable interest adjustments on the pension scheme deficit, and finance costs were down due to tight cash control and low interest rates. Income tax is estimated to be at a somewhat lower level than last year's corresponding period, leaving profit after tax at £346,000 just ahead of the prior year's £317,000. Cash and cash equivalents ended the period at £2.3m compared with £2m one year earlier.

In a separate announcement today, the Group said it has agreed terms for the acquisition of Collins and Hayes Furniture Limited. Collins and Hayes is an upmarket manufacturer of upholstered furniture with distribution through many of the UK's premium department stores, and has a successful management team and committed workforce. The addition of Collins and Hayes to Airsprung's furniture interests is expected to bring significant benefits to the Group.

The outlook for the Group's existing businesses for the remainder of the year will depend on the retail environment over Christmas and the New Year and the impact of a higher rate of VAT. On present trends, operating profits are likely to continue at the current level and, while a positive contribution is expected from Collins and Hayes in the last quarter, there will be non-recurring costs, including professional fees, for the acquisition. The directors believe the enlarged Group will have good prospects for 2011-12 and beyond. Story provided by StockMarketWire.com