Profits up 60% for AGA Rangemaster as housing market heats up

MIDLAND-based cooker and boiler manufacturer AGA Rangemaster has said the improving housing market and the increasing availability of mortgages is having a beneficial effect on its business as latest trading figures show half year profits up 60%.

Revenue was up 3.3% to £123.5m as the company said its outlook for the full year remained unchanged, with trading likely to be well ahead of last year. The first half pre-tax loss fell to £0.3m compared with a loss of £2.4m in the first half of 2013.

The Leamington Spa-based company said its markets had picked up, although they remained inconsistent and variable.  While there could be no certainties around the availability of mortgages, it said consumers in both the UK and the United States appeared more willing to spend money on kitchen appliances.

It has also introduced more efficient products and has even produced a smaller oven which it hopes will appeal to buyers in city crash-pads.

“If that boosts sales further we will see the benefits of operational gearing that the rationalisation programmes in recent years have created.  We expect that the move into 60cm cookers for AGA and then for Rangemaster will be of particular note,” it said.

At the half year order intake was up 6% with the trend for Rangemaster products to be above the average. Its Fired Earth business had a strong sale period leaving order intake so far this year up over 14%.  

It said the weak performance in Ireland had bottomed out but still left the company with work to do to obtain the benefits of last year’s rationalisation plan – something which it said applied equally to Grange in America.

The company’s pensions black hole improved but the deficit at the end of the half-year period was £46.7m. Assets rose by £10.4m since the start of the year after payments of £19.4m.

William McGrath, AGA chief executive said: “We are happy with the progress achieved during the period, given our markets are improving but remain varied.  We now have the market wind behind us and the product and distribution in place to benefit.  The AGA City60, in particular, can grab the attention of new urban consumers and is an important ingredient to our growth plans.”      

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