AGA simmers as markets fluctuate
COOKER and boiler manufacturer AGA Rangemaster has said progress in the business continues to be impacted by depressed activity levels in Ireland and the patchy nature of the consumer markets.
In a trading update ahead of its interim results, the Midland-based business said it had enjoyed a strong May but this had been offset by a quiet June.
In the first half overall revenues and operating profits excluding property profits were slightly lower. However, the group said it continued to expect revenue and profit growth for the full year as the product and cost initiatives work through.
The successful introduction of the more energy efficient Total Control range of cookers had helped to deliver a 4% growth in sales during the period, which the company hopes will be extended across all markets as the range is rolled out globally during the second half.
Sales in Ireland fell further in very weak markets, although the firm said exports to the continent continued to grow. UK cooker volumes a little lower overall, although sink sales volumes – which link to housing completions – were up. Fired Earth saw sales up over 6% with a better performance across its product categories as its turnaround continues.
The group’s North American operation, AGA Marvel, saw new ranges of refrigeration products being brought to market. Sales of these to date are replacing sales to one major customer, it added.
The Grange home furnishings business had a further difficult time in North America and revenue and cost initiatives continue to be focused on returning the overall Grange operation to profitability.
Within the group, AGA said discussions about the funding needs of its Pension Scheme on an actuarial basis continued with the trustee of the scheme and its advisers. The scheme was fully funded on an accounting basis at December 31, 2011 and AGA said a clear, stable medium term framework for the scheme would be set out as soon as possible.
Cash continues to be closely managed. After payments made as part of the German litigation settlement announced in March, increased Pension Scheme funding payments, the funding of international expansion and the usual seasonal working capital movements, net cash balances at the half year were around £12m.
William McGrath, AGA chief executive, said: “Our performance has been sound in a tough first half. We have tremendous brands led by our re-energised AGA ranges and key product lines are starting to gain momentum. International sales growth remains a central objective. This will become clearer in a year in which we expect further progress.”
The firm announces its interim results for the six months to June 30, 2012 on August 24.
