AGA boosted by strengthening cooker sales
ICONIC cooker manufacturer AGA Rangemaster has said that sales of its main product have helped to give the company a boost while consumer markets remain subdued.
In a trading update ahead of its interim results for the six months to June 30, the Solihull group said it had traded in line with expectations and had made steady progress.
The company, which is exposed to fluctuations in the property market, endured a difficult 2009 as consumers cut down on spending.
It said its plan for 2010 remained to rebuild profitability and to generate cash as markets improved. With the onset of recession the company looked to reduce costs, improve operational gearing and invest in product development.
The update confirmed that sales of its cast iron cookers were up in the first half of the year and current lead levels suggested that 2010 would prove better than 2009 although sales of the all-in-one cooker and boiler Rayburn and Stanley models were appreciably lower.
The Rangemaster division enjoyed a better period with sales of the group’s broader appliance range performing well.
Sales on the near continent have been particularly strong reflecting an established growth pattern. After a slow start, first half orders for Rangemaster were up over 8% on 2009 and production is being increased from budgeted levels for the second half of the year.
The group said closer integration of its operations continued to bring benefits, notably between AGA and Rangemaster in the UK. In North America, it said the decision to make its new state-of-the-art site in Michigan the main production and distribution centre for hot, as well as cold products, would see its cooker production facility in Ontario close later this year.
The group’s home fashions lines showed an overall improvement but remained loss-making with revenues from Fired Earth down even though orders were up. Grange performed better with orders and revenues both ahead, while cookware lines from AGA and Divertimenti both performed well.
The company said it continued to manage its cashflow carefully and net cash balances at June 30 were in excess of £20m compared with £2.3m a year earlier. The group expects to generate net cash again this year.
William McGrath, group chief executive, said: “We have had a sound first half as activity levels ticked up and Rangemaster is providing considerable impetus.
“The sustained and innovative work on our product offering and in supporting our brands, alongside the cost base reductions made, all mean we are well positioned for a recovery.”
