Aga back in black as sales rise
ICONIC cooker manufacturer Aga Rangemaster has returned to profits and forecast that sales improvements are likely to continue throughout the rest of the year.
Reporting interim results, the Solihull-based business said revenues increased by 5% to £123.4m and operating profits improving from a loss of £1.7m last year to a surfeit of £0.8m, in line with expectations.
It said that adopting the successful Rangemaster business model in the UK and North America was raising efficiencies and reducing costs.
Net cash of £22.4m is more than £20m higher than at the same time last year, driven by continued working capital management.
Dividend payments have been restored at 0.7p per share.
Order intake remains positive with indications that the improvements of the first half will be carried over into the second half.
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“The current level of sales leads suggest that the improving trends should continue into the second half even though the level of housing mortgage approvals – a key lead indicator for us – is suggesting the market is now flat year-on-year,” it said in a statement.
William McGrath, group chief executive, said 2010 was proving encouraging with Rangemaster driving improved profit performance even though consumers remain cautious.
“Rangemaster’s export growth, product innovation and the breadth of its range of appliances are providing a stimulus and we look to it, alongside AGA, to trigger the operational gearing we have in place and we expect this to drive longer term earnings momentum,” he said.
Operating profit rose to £0.8m which compared to a loss of £1.7m in the first half of 2009.
The net pension credit of £16.4m compares with £0.8m last year and includes a curtailment gain of £16.3m following the freezing of pensionable salaries for the majority of the scheme members early in the year.
Non-recurring costs during the period were £0.7m, these mainly relate to the announced closure of the Canadian manufacturing operation. The move is expected to deliver annualised savings of £0.6m in 2011.
The company said its balance sheet remained strong with net cash of £22.4m and working capital stood at £19.4m by the end of the period.
“We are moving into the key autumn selling season and the current level of leads across our brands does suggest a reasonable sales period ahead although the consumer mood is currently more subdued than in the spring,” it said in its results statement.
