Mattress manufacturer bounces into profit but warns on economic outlook and VAT increases
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The British-based mattress manufacturer Airsprung reported today (29 June) that it had increased sales and turned last year's losses to profits but warned that it would continue to take "vigorous steps" to ensure future progress.
Airsprung – which manufacturer beds, mattresses and sofa beds, under the Airsprung, Gainsborough, Hush and Hush-a-Bye brands as well as operating the Cavendish Upholstery, Airofreem foam component and Arena graphic design businesses – saw sales for the year ended 31 March rise 9% on the prior year to £46.5 million, while pre-tax profit was £978,000, a strong recovery after last year's loss of £417,000 and representing a favourable swing of £1.4 million.
Commenting on the results, chairman Stuart Lyons said: "Airsprung Group is well positioned in the marketplace but vigorous steps will continue to be necessary to secure a satisfactory platform for future progress. Our management teams are continuing to look for operational and buying efficiencies, and to develop strategic and market opportunities."
Among the Group's bed brands, all based on sites in Trowbridge, Wiltshire, Airsprung Beds was the major driver of £38.0 million-worth of sales and £1.5 million profit. While the sales were little changed from the previous year in a challenging marketplace, significant reductions in direct and indirect costs were achieved while maintaining raw materials cost ratios. The Gainsborough and Hush businesses achieved increased sales in a difficult market, but at lower gross margins.
The Group's three business activities outside the bed sector are Cavendish Upholstery, Airofreem and Arena.
After a difficult three years and following a change in its retail business model, Cavendish Upholstery – which manufactures and distributes upholstered furniture from its site in Chorley, Lancashire – saw increased revenues of well over 50%, and a 70% reduction in losses over the previous year.
Airofreem – which supplies cut foam components increased its margins during the year as a result of greater operational efficiencies despite rising costs for petrochemically derived materials.
The graphic design business Arena also had a good year and is developing strength in web design.
Combined, sales for these three businesses rose to £8.4 million, yielding pre-tax profits of £0.4 million.
However, looking ahead, Airsprung said that trading in the first quarter of the current financial year had been weaker than expected with revenues for the first two months (April and May) down on last year and it was likely that profits for the first six months will fall modestly below the level of 2009.
