AGA Rangemaster cooks up confidence despite fall in FY revenues
ICONIC cooker manufacturer AGA Rangemaster has announced mixed results for 2011 with pre-tax profits up despite a near £10m fall in revenues.
The Warwickshire manufacturer said operating profits before amortisation had risen to £8m (2010: £6.9m) and £6.1m (2010: £5.1m) after amortisation. The increases were achieved even though revenue decreased to £250.9m (2010: £259.1m).
The firm said it finished the year with a strong net cash position of £31.3m (2010: £34.6m) and working capital ratios remain very good.
New initiatives such as the more energy efficient AGA Total Control products have opened up new opportunities in the UK and more importantly to firm, in Europe and in North America where it said its long-term brand building was now starting to pay off.
It said it also had a strong product mix which was helping to make greater impressions in other international markets.
New efficiencies are planned alongside further developments arising from investments already made in products and systems – seen in AGA Total Control being a factory assembled product which simplifies distribution, installation and service considerations. All the firm’s modern electric products will be factory built by the end of 2012.
The accounts show that the group’s pension schemes had a net surplus at year-end of £5.3m, which compares with a surplus of £7.1m a year ago.
The group said it had also reduced losses at its Fired Earth and Grange operations with the progress made last year set to continue.
William McGrath, chief executive, said: “The focus for 2011 was on maintaining our strong balance sheet and growing profit. The successful launch of the AGA Total Control ensures its continued relevance as a product at the heart of the home and gives us renewed confidence that we are on course to achieve our long-term performance objectives, even if current market conditions remain exacting.”
He said the firm had gone into 2012 expecting markets to remain tough and it had already taken further steps to improve efficiencies and lower the cost base, building on programmes of the last four years.
“We now have a single set of focused business processes across the UK manufacturing units. We are also, as more of our cast iron cookers are fully assembled in the factory, working with a simpler sales process and a single warehouse for all our cookers in Leamington Spa,” he said.
“We are pleased that our January sales programmes went well and consumer leads are up. We have well defined target markets in the UK and overseas and expect this targeting to bring sales growth this year. For Rangemaster at the biannual Kitchen Bedroom Bathroom trade show at the NEC, our dealers felt our product mix based on market leading ranges with a wider appliance and sink offering provides a strong platform for the year. We are encouraged that AGA Marvel in North America should see appreciable progress and trend lines at Fired Earth are better.
“Against this background we retain our confidence in our business model and a belief it will generate the expected returns given the tremendous affection and respect that our brands attract. Our determination through the downturn to build product and distribution to make us the beneficiary in a recovery could pay off this year – a year we approach with confidence.”
