Shares in Airea (AIM:AIEA) dropped 11% to 20p after the specialist flooring group reported a slowdown in trading during the second half of 2025, despite a resilient full-year performance.
The AIM-quoted company said group sales for the year rose just 1% to £21.44 million, down from 5.8% growth at the half-year stage.
Demand weakened in the second half, particularly in the UK and Ireland, where market uncertainty increased following the government's November budget.
International sales were down 4% year on year, with AIREA pointing to ongoing geopolitical instability as a drag on performance. However, the group said its Dubai hub continued to attract interest and was building traction as a gateway to the Gulf, Middle East and India.
Despite the sales slowdown, AIREA said operating profit for the year is expected to be ahead of 2024, supported by disciplined cost management and strong cash generation.
The company also completed the £4.1 million sale of an investment property in October, further strengthening its balance sheet.
Its new manufacturing facility is now close to completion, with final inspections underway. The group said there has been no disruption to operations during the build.
Chairman Martin Toogood said the board remained confident in the company’s long-term growth prospects.