AIREA Share News (AIEA)

LONDON (Alliance News) - Airea PLC shares jumped on Wednesday as it declared both a special dividend and a share buyback, as it attempts the sale of its loss-making residential carpets business.

Airea shares were up 26% on Wednesday at a price of 44.12 pence each.

Airea, which is reporting results for the 18 months to December, is paying a special dividend of 5.00 pence per share, which together with its maiden interim dividend takes its total for the period to 6.75p.

On top of this, Airea is to buy back up to 6.0 million of the company's shares, just under 15% of its entire issued share capital.

Revenue for the 18 months to December was GBP36.7 million, compared to GBP24.8 million in the year to June 2016. It swung to a pretax loss of GBP1.5 million in the period after a profit of GBP1.4 million in the year before.

Increased exceptional costs to GBP2.2 million from GBP1.3 million are due to the renationalisation of the residential carpets business and asset impairments, and the reduction in profitability was due to the poor performance of this business.

The UK-based floor coverings manufacturer on Tuesday said it will close its residential carpets business, Ryalux Carpets Ltd, due to mounting losses and a worsening trading environment.

It expects the closure to be completed by the end of April, and it will be cash generative for the firm, with this money to be returned to shareholders.

The increase in free cash generation going ahead will allow increased investment in its commercial flooring business Burmatex, which it described as "highly profitable".

The company said: "The changes we are making to the business and the increased investment in our successful commercial flooring business provides significant opportunities for profitable growth.

"Given our confidence in the future prospects of the business, the ongoing improvement in the performance of the commercial floor coverings business, and the cash surplus arising from the actions taken in the residential carpets operation we will be proposing a special dividend payment."