UK Small Caps

LONDON (ShareCast) - Mattress and sofa company Airsprung Furniture (LSE: APG.L - news) returned to profit in the second half of its financial year despite revenues showing little sign of recovery.

Despite recording a profit of £0.3m in the second half of its financial year the group recorded a pre-tax loss of £0.42m in the year to 31 March 2009, compared to £1.46m the year before.

Sales fell to £42.81m from £49.92m.

In view of the return to profitability in the second half of its financial year the board has recommended payment of a dividend of 0.5p.

The company said results were hit by sharp and unpredictable increases in raw materials and fuel, and although prices have since stabilised, once the economy picks up it expects prices to start rising again, particularly the cost of oil and steel.

Business activity is at a lower level but appears to have steadied, though the directors believe this may prove to be a temporary phenomenon as the effects of growing unemployment kick in.

“Although sales for the first quarter of the current year remain generally weak, operating results are appreciably ahead. Barring unforeseen circumstances, the board is confident that the first half of the current year will show a strong recovery with a return to reasonable profits after the severe losses of the previous year's comparable period,” said Stuart Lyons, chairman of Airpsrung.