AGA confident despite stagnating markets and £6m full year revenue fall

LEAMINGTON Spa cooker and boiler manufacturer AGA Rangemaster has said its outlook remains positive despite no immediate improvement in its major markets.

The company made the statement as its annual results showed a revenue fall of £6m during 2012 due to a continuing weakness in the major consumer markets.

Despite the fall, the company saw pre-tax profits rise to £8.4m (2011: £7.5m). It has attributed this to a clampdown on costs.

Overall, group revenue declined 2.5% to £244.6m (2011: £250.9m). On a constant currency basis revenues were down 1.3% as the Euro weakened during the year. Second half revenues of £125.4m were 3.2% down (2011: £129.5m) and compared with first half revenues of £119.2m, down 1.8% on the £121.4m seen in the first half of 2011.   Of the total revenues, 37% were generated outside the UK (2011: 37%).

Basic earnings per share on continuing operations is 10p (2011: 18.8p) while the directors said they were not recommending a final dividend.  This follows the agreement with the trustee of the group’s main pension scheme following the 2011 actuarial valuation. This means no dividends will be paid in relation to the 2012 results (2011: 1.9p per share).  The cash cost of the final 2011 dividend paid in June 2012 was £0.8m (2011: £1.2m).  

William McGrath, Aga chief executive, said: “2012 was a year which required the most determined efforts to achieve profit growth.  While a market upturn in the near future is unlikely our prospects are good. We have heritage brands with contemporary relevance which creates tremendous opportunities in both established and new markets for us.  With major marketing initiatives imminent we expect to see greater impetus in the coming months.”

In a review of current trading, the firm said the pressures on consumers had reduced the number of house moves and larger improvement initiatives. These factors have impacted on the business since the beginning of the credit crunch and it said there was little end in sight.

“We have to prepare for a continuation of the flat markets we have been seeing. That in turn is reflected in cost reduction measures already underway, most notably seen in further rationalisation programmes involving Waterford Stanley in Ireland and Grange in North America,” it said.

“We are at the same time determined to allocate resources to obtain the best returns from the product innovations of recent years, through which we can establish positions in faster growing markets whereby we can make use of the operational gearing available within the businesses.”

So far this year it said it had seen a slow January followed by a positive February. It said there was a notable pick up against last year for AGA Marvel in North America and for Fired Earth.  

AGA orders are currently flat, while Rangemaster orders have trended down pending the sales and marketing initiatives planned for this spring, it added.

“The cost and revenue initiatives we have taken suggest that 2013 will see more progress and we look forward with some confidence,” said the firm.