23rd Mar 2012 17:17
23rd March 2012
AGA Rangemaster Group plc - 2011 Annual Report & Accounts
AGA Rangemaster Group plc (the "Company") has today posted to shareholders and, in accordance with Listing Rule 9.6.1R has submitted to the National Storage Mechanism copies of the following documents:
* Annual Report & Accounts for the year ended 31st December 2011 (`2011 Annual Report & Accounts'); * Notice of Annual General Meeting (`AGM Notice'); * Form of Proxy.
The documents will shortly be available for inspection on the National Storage Mechanism www.hemscott.com/nsm.do. Copies of the above documents may be obtained directly from the Company Secretary at the Company's registered office: AGA Rangemaster Group plc, Juno Drive, Leamington Spa, Warwickshire CV31 3RG.
As required by Disclosure and Transparency Rule 6.3.5R, the Company confirms that the 2011 Annual Report & Accounts and the AGM Notice are now available to view or download in pdf format on the Company's website at http:// www.agarangemaster.com/979 or under the `Investor Relations' section.
On 9th March 2012, the Company issued its 2011 Full Year Results for the year ended 31st December 2011. The results included a management report which contained an indication of the important events which had occurred during the year and their impact on the financial results. That information, together with the information set out below, which is extracted from the 2011 Annual Report & Accounts, constitute the material required by DTR 6.3.5R to be communicated to the media in unedited full text through a Regulatory Information Service. This material is not a substitute for reading the full 2011 Annual Report & Accounts. Page numbers and cross-references in the extracted information below refer to page numbers and cross-references in the 2011 Annual Report & Accounts.
Key Risks and Uncertainties
The key risks and uncertainties are set out on pages 14 and 15 of the 2011 Annual Report & Accounts. The unedited full text relating to these disclosures is set out below:
Key risks and uncertainties facing the Group
The board regularly reviews the risks faced by the Group, including business and wider social, environmental and ethical issues. Risk is an inherent part of doing business and the intention of AGA Rangemaster's risk management process is not to avoid all risk, but to identify, manage and, where appropriate, mitigate risks through the balance of risk versus reward. Details of our systems of internal control and risk management are set out on pages 28 and 29 of the report and this section describes the processes through which risks are assessed, managed and mitigated. The directors consider the principal risks and corresponding mitigation set out below represent the principal uncertainties that may impact on the Group's ability to effectively deliver our strategy in the future. The board recognises the profile of the risks changes constantly and additional risks not presently known, or that are currently deemed immaterial, may also impact on delivery of the Group's strategy.
Risks to the Group
Pension scheme
Risk - The Group is the sponsor of a large pension scheme and can be called on to meet funding deficits. The required periodic revaluations of the pension scheme may highlight a worsening deficit that may require the Company to provide additional cash contributions or guarantees to meet future funding needs. This could severely constrain the finances of the Group.
Mitigation - The Group works closely with the trustee of the main pension scheme and has in place a long-term funding strategy to manage closely assets and liabilities in relation to each other. The defined benefit scheme is closed to new entrants and pensionable salaries were frozen in 2009/10.
Funding
Risk - The Group has bank facilities requiring renewal over the next two years. Changes in the banking market since the facilities were put in place in 2008 may affect renewal.
Mitigation - The Group maintains an ongoing dialogue with its bankers and keeps them informed of the Group's progress against its business plans and financial covenants.
General economic conditions
Risk - The Group's operations are sensitive to global economic conditions and levels of consumer confidence particularly since the housing market slowed in 2007. This could impact on the Group's revenues and if the downturn persists or worsens may impact on currently planned production levels and profitability. A global economic recovery would bring benefits given the operational gearing of the Group, but could also result in an increase in raw material prices or restrict the availability
and quality of components.
Mitigation - The Group reviews financial forecasts and monitors economic conditions (in particular housing market trends in the UK and the US) to assess the impact on its budget and strategic plans. The Group seeks to increase international sales and to reduce individual market dependency. Internal processes are in place to continually monitor progress and the availability of raw materials and components.
Financial instruments
Risk - The Group is exposed to foreign exchange and interest rate risks as it sells its products and sources components world-wide. Significant movements could impact on future profitability and cashflow. For further details see note 19 to the accounts.
Mitigation - The Group's treasury policy sets the framework for hedging foreign exchange and interest rate risks. The Group offsets currency flows internally where possible and puts in place foreign exchange contracts, where appropriate.
Operational Risks
Competition/margin erosion
Risk - Competitors may introduce upgraded products and increase their marketing expenditure, which may impact on market share. There could be downward pressure on pricing if the sector accepts lower margins. Reduced demand for our products or being less price competitive could impact the Group's ability to deliver its strategy and business plans.
Mitigation - We actively invest in new product development and design capabilities. New products are extensively researched and market tested. We constantly monitor our market position and competitor strategies. Value engineering programmes assist with the maintenance and enhancement of margin and pricing strategies.
Intellectual property
Risk - The Group owns several well known brands and other intellectual property. Failure to protect our rights in our existing and in potential new markets could lead to a reduction in their value.
Mitigation - We actively monitor the market to identify and address breaches of our rights. We register trade marks, patents and designs in existing and new markets and take legal action as appropriate.
Over reliance on any individual customer or supplier
Risk - The Group's profitability could be impacted if any single customer became business critical or an individual supplier dominated our manufacturing process. Changing approaches to distribution emanating from increased consumer use of the
internet could alter dealer and distributor structures and the industry.
Mitigation - The Group sells its products through a wide range of channels and markets which helps to minimise single customer reliance. We avoid over reliance on any single supplier and monitor our supply chain accordingly.
People
Risk - Loss of key personnel or the failure to plan adequately for succession or to develop new talent could damage the future prospects of the Group. Competition for quality personnel is intense and the Group may not be successful in attracting or retaining suitably qualified personnel, such as skilled engineering staff. Loss of key employees and delays in recruiting new personnel could harm the Group's business and in time our competitive advantage may erode.
Mitigation - The Group has succession and development plans in place for key personnel and these are reviewed and updated at least annually. The Group HR director oversees talent management and recruitment of key personnel. Remuneration packages including fixed, variable and long-term elements and
compensation arrangements are regularly benchmarked to ensure the Group's remuneration policy remains in line with market practice.
Regulatory Risks
Legal, regulatory and litigation
Risk - The Group's operations or its products may fail to comply with laws and regulations in the markets in which it operates. We may take legal action against third parties to enforce our rights or face litigation from third parties. This may result in reputational damage and financial cost.
Mitigation - We are committed to the highest standards and conduct regular audits covering business processes and behaviours to ensure compliance with the relevant laws and regulations.
Health, safety and environmental
Risk - A health and safety incident could result in serious injury to the Group's employees, visitors to our premises or customers. An environmental incident could impact on the community in which we operate. The environmental performance and reputation of our products may affect customer demand.
Mitigation - We are committed to the highest standards and conduct regular audits to ensure compliance with relevant laws and regulations. Accreditation to ISO 9001:2008, ISO 14001:2004 and BS OHSAS 18001:2007 ensures a framework is in place with clear policies and procedures and these are regularly reviewed at operational and board level. Our product development and value engineering programmes help ensure product performance and benefits are continuously improved, taking advantage of new and emerging technologies.
Related Party Transactions
The related party transactions are set out in note 28 to the Group accounts on page 70 of the 2011 Annual Report & Accounts. The unedited full text relating to these disclosures is set out below:
The Group recharges the Group pension scheme with part of the cost of administration. The total amount recharged in the year to 31st December 2011 was £0.1m (2010: £0.1m). The amount outstanding at the year end was £nil (2010: £nil).
Key management's compensation
The compensation of the key management team, including the executive and non-executive directors, at the balance sheet date is set out below:
2011 2010 £m £mSalaries and short-term benefits 1.7 2.2Post employment benefits 0.1 0.1Share based payments - 0.1
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Total emoluments to key management 1.8 2.4
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Responsibility Statement
The 2011 Annual Report & Accounts contain a responsibility statement in compliance with DTR 4.1.12 signed by order of the board by W B McGrath, Chief Executive and S M Smith, Finance Director. The directors' responsibility statement is set out on page 24 of the 2011 Annual Report & Accounts for the Group. This statement is set out in unedited full text below. This states that on 9th March 2012, the date of approval of the 2011 Annual Report & Accounts, the directors confirm that to the best of their knowledge:
* the Group financial statements, prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Company and the undertakings included in the consolidation taken as a whole; and * the business and finance review, which is incorporated into the directors' report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation as a whole, together with a description of the principal risks and uncertainties they face.
For further information contact:
P M SissonsCompany SecretaryAGA Rangemaster Group plc
Telephone Number +44 (0)1926 455755
XLONRelated Shares:
AGA.L