Weak UK sales dent first half for AGA

REDUCED consumer spend in the UK has dented the first half performance of iconic range cooker manufacturer AGA Rangemaster.

The Leamington Spa group, which has manufacturing facilities in Shropshire, said revenues were down in the six month period to June 30 but margins had improved.

However, the company said its export business was still strong, with sales into continental Europe reaching new records.

In a trading update ahead of its interim results on August 26, the group said: “Good operating profit progress was made even though housing-related consumer expenditure remained subdued.

“Revenues were slightly lower but margins improved, particularly in parts of the group that had been weaker performers. Net cash balances have increased year-on-year.

“Rangemaster cooker volumes were, overall, slightly down because of the relatively quiet UK market. Exports continued to achieve new record levels on the continent.”

The company said it was also now reaping the benefits of decisive management action at its Fired Earth subsidiary. It said the run rate of losses had fallen sharply and a clear plan with a strong incentive structure was now in place which was set to improve performance over the next three years.

For AGA Marvel in North America, it said demand remained subdued and the onus was on programmes to widen the customer base. Hopes are that a new range of premium undercounter refrigerators will help boost performance.

The major development for the group in the first half was the UK launch of energy efficient AGA Total Control heat-storage cooker, which it said had been very well received. It will be launched this autumn in international markets.

The group said cash flows remained carefully managed and working capital ratios were now in line with long run objectives. At June 30, 2011 net cash was in excess of the £22.4m balance of a year ago.

William McGrath, chief executive, said: “In the current market we are pleased with our performance, strong cash balance and market leading positions. Looking forward we are excited about the growth opportunities for our new products, led by AGA Total Control,  which epitomises our plans for the future.”