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(Sharecast News) - Specialist flooring company Airea reported a 5.6% year-on-year decline in sales for the first half on Tuesday, reflecting a challenging market environment.
The AIM-traded firm said it experienced an unforeseen slowdown in the second quarter, following a strong start to the year.
Despite that, it said its performance slightly outpaced the overall market trend.
Sales in the UK and the Republic of Ireland were relatively stable, down just 0.3% compared to the same period last year.
However, international sales were significantly impacted by ongoing economic and geopolitical uncertainties, resulting in a 21.9% decline from the prior year.
Looking ahead, Airea said it had seen an encouraging start to the third quarter, with positive trading in July and a strong order book, particularly for its low-carbon and carbon-neutral product lines.
The company said it remained committed to innovation, with several new product launches planned for the second half of the year.
Airea said it was also progressing with its long-term strategic initiatives, including a major investment in its manufacturing facility in Ossett, West Yorkshire, which was on track for completion early next year.
The investment was described as a key part of the group's ongoing transformation efforts.
Airea said the slowdown in sales during the second quarter resulted in higher-than-normal inventory levels at the end of the period.
In response, the board said it was implementing measures to address those levels in the second half, and would review its stockholding policy to introduce a more efficient, cash-generative strategy.
"The board anticipates a continued improvement in trading during the second half of the year," Airea's directors said in their statement.
"However, in view of the difficult conditions in the second quarter, coupled with the continued programme of investment in the Group's transformation, the board has moderated its full year sales growth and profit expectations.
"The board remains confident in the group's long-term trading and growth prospects."
Airea said its interim results would be announced on 26 September.
At 1246 BST, shares in Airea were down 12.93% at 25.25p.
Reporting by Josh White for Sharecast.com.
