Full year profits heat up for AGA Rangemaster

RANGE cooker and kitchen lifestyle brand, AGA Rangemaster has seen a positive 2014 with full year revenue and profits rising, fuelled by a boom in consumer spending.

Revenues rose by 4.3% to £261.1m – 5.7% at constant currency, with 66% of the revenue generated in the UK.  Second half growth of 5.1% was higher than in the first half.  Operating profits rose again to £9.6m from £8.2m – a 17.1% increase.  

First half revenues were up 3.3% at £123.5m (H1 2013: £119.5m), while second half revenues were up 5.1% to £137.6m (H2 2013: £130.9m). Pre-tax profit was £0.7m (2013: £1.1m).

The board does not to make dividend payments without pension scheme trustee agreement and it said this would not change.

The firm’s success is normally seen as a good barometer for the strength of both the housing sector and the wider consumer economy.

One of the reasons for the group’s success was the instant popularity of its new 60cm wide oven, launched in September. The product is designed for AGA fans with city crash-pads as well as those with smaller homes.

Of the group’s total revenues, 34% were generated outside the UK (2013: 37%).

The West Midlands-based group said the success had come despite challenging trading conditions across its markets, where it said activity levels remained below those of pre-recession 2008.

It said UK mortgage approvals, which are a good indicator of activity levels for the business, ended the year with a Q4 fall, leaving rolling 12 month numbers only just ahead year-on-year.  

“This was sharply below expectations set a year ago by the Bank of England.  It was encouraging, therefore, that household goods expenditure and appliance expenditure increased after a long period in the doldrums.  With real incomes now rising and with inflation low, the trend towards higher spending on the home can be expected to continue in 2015,” it said in its results statement.  

Elsewhere, it said its markets in North America had shown sustained good growth, which was in contrast to its European markets which remained soft.

“Market conditions in our major business areas are expected to improve this year. Our order intake so far this year is back to 2014 levels after a slow start,” it said.

“Fired Earth and AGA Marvel have seen the strong trend lines of 2014 continue in 2015. There are some more encouraging signs in both Ireland and France. We are looking to our development work in wider markets to start to contribute additionally to our sales in Germany – where our distributor CoolGiants has been rapidly opening up new outlets – and China. In China, our distributor, Beijing Hi Seasons is to have 30 displaying outlets and there will be the formal launch later this month in Beijing.
 
“Overall, with these developments providing additional impetus, we expect trading outcomes to be encouraging this year.”