16th Mar 2007 07:00
16th March 2007FOR IMMEDIATE RELEASE AGA FOODSERVICE GROUP PLC 2006 PRELIMINARY RESULTS HIGHLIGHTS
Full year to 31st December 2006
2006 2005 Increase ‚£m ‚£m %Continuing Operations -Revenue 528.9 459.9 15.0 -Operating profit 47.7 41.4 15.2 -Profit before tax 46.0 42.7 7.7 -Basic earnings per share 28.7p 26.4p 8.7 Dividend per share 10.5p 9.2p 14.1 Special dividend proposed 43.0p - Shareholders' funds 333.5 298.7 Net (debt) / cash (10.9) 20.4 * Good growth achieved by Aga, Rangemaster and Marvel our core consumer brands. * Continuing progress in foodservice with strong contributions from the
recently acquired Eloma and Amana businesses with energy and accelerated
cooking initiatives gaining customer recognition. * Aga Foodervice Inc named US Energy Star Partner of the Year by US Environmental Protection Agency. * Strong finances enable 50 pence dividend (including 43 pence special
dividend and 7 pence final dividend) to be paid at a cost of ‚£65 million.
* Decision to sell loss making Domain Home - treated as discontinued.
* Good order intake underpins confidence in current trading.
"We have strong brands and market positions. We have the ideas and resources todevelop them further as well as increasing shareholder returns with a specialdividend. We remain committed to driving innovation and structural change inthe foodservice sector." William McGrath Chief ExecutiveEnquiries:
William McGrath, Chief Executive 0207 404 5959 (today) Shaun Smith, Finance Director 0121 711 6015 (thereafter) Simon Sporborg/Nina Coad, Brunswick 0207 404 5959
Aga Foodservice Group plc 2006 Preliminary Statement CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENT Aga Foodservice is the Group that equips the world's best kitchens. We arepleased that in 2006 we achieved another good set of results which helped makeus a market leader in the premium consumer and commercial cooker andrefrigeration markets. Encouragingly, core businesses like Aga and Rangemasterand our international bakery and refrigeration activities performed well.Our vision encompasses the world's best kitchens be they in your home or whereyou eat out. Our aim is to continue to expand our premium brands and to be aworld leading supplier into the bakery and refrigeration markets where we havesector leading products for changing markets. We have invested heavily inrecent years in products and acquisitions. We have worked to make our businessless cyclical and dependent on narrow markets. This trend will continue. Weembrace enthusiastically the sustainability agenda covering energy efficiencyand waste reduction. We believe that our strategy developed in recent yearswill continue to generate attractive returns for shareholders.
Trading performance - continuing operations
In 2006 revenue rose by 15.0% to ‚£528.9 million of which organic growth wasover 5.0%. Operating profits were up 15.2% to ‚£47.7 million. The loss made byDomain Home is shown under discontinued operations. Profit before tax was up7.7% to ‚£46.0 million. Profit after tax and earnings per share rose 8.5% and8.7% respectively to ‚£37.0 million and 28.7 pence. These good figures and abalance sheet which showed a small debt level of ‚£10.9 million at the year endenables us to recommend an increase to the dividend for the sixth year in a rowto 10.5 pence per share - an overall increase of 110% in that period - and toannounce a special dividend of 43 pence per share. Since the disposal of pipesystems we have returned ‚£125.5 million to shareholders whilst the market valueof the company has increased from ‚£250 million to over ‚£525 million.The UK and European consumer markets remain the heartland of the businessgenerating 46.0% of total revenues. Whilst UK markets were mixed during theyear strong new product introductions and marketing campaigns for Aga andRangemaster in particular enabled us to make continued progress while growthcame through more strongly in continental markets. All of our brands performedparticularly well in Ireland which is now firmly established as a core businessarea. Revenues fell at Fired Earth as we switched from soft furnishings tohigher-margin kitchen furniture although prospects have steadily improved thereas the process of integrating Fired Earth into Aga was completed.There was a strong performance from the European foodservice operations in 2006with revenue up 12.7% and operating profits up 28.6% (11.4% excluding theWilliams property disposal profit). Aga Bakery continued its expansion outsideits home markets of the UK and France into Eastern Europe and the US.Similarly, in refrigeration, Aga Foodservice is expanding from thewell-established platform we have in the UK and is trading well in Australiaand China.In North America, markets remained mixed. In the consumer markets we havedeveloped a strong team incorporating Marvel, Aga Ranges and Heartland, our2005 acquisition in Canada. Marvel, the refrigeration appliance business, iswell established in its markets and grew strongly. We invested in our NorthAmerican cooking operations to build further market recognition which held backtheir results. Otherwise, in foodservice, during the first half we incurred acost of ‚£0.8 million to reorganise our bakery operations to better positionthem for the next phase of growth. The acquisition of Amana, the microwavebusiness, in September strengthened our operations materially, opening up newmajor account opportunities. Overall, the US contributed 17.2% of revenue and9.6% of operating profits.Corporate developmentWe have steadily grown the overall business over the last six years byinvesting in our products and by making acquisitions of businesses both strongin themselves, and using cross-selling initiatives which could bringoperational gearing benefits to the Group as a whole. This strategy has workedwell and is continuing to create opportunities. Aga is iconic and our consumerbrands are outstanding; their value and potential is at the heart of ourthinking. As we strengthen them further by investment, we see ever greateropportunities to grow them - primarily organically. Where we have lessintrinsic strength and where we are active in markets undergoing structuralchanges reducing profitability, decisive action is needed. This applies in thecase of Domain where a strong franchise is being impacted by a weak market andchanging sourcing patterns. In December the board concluded a review of thebusiness with the assistance of Ernst & Young Orenda and initiated its sale. Asa result it is being shown as a discontinued operation in these results.In foodservice we see a sector where the pace of change is accelerating becauseour customers need quality food faster and are starting to realise that for toolong equipment has been inefficient. We are already well placed to benefitbecause of our strong product offering and established market positions. Ourproposals for 'increasing efficiency in the commercial kitchen' highlight thecontribution this sector can make to address environmental imperatives.Government, lobby groups, manufacturers and caterers themselves are puttingefficiency high on their agendas. We are delighted that Aga Foodservice Inc hasbeen named 2007 Energy Star Partner of the Year by the US Federal EnvironmentalProtection Agency.During 2006 we approached Enodis, a UK quoted foodservice operation, primarilyoperating in the US. We believed that there was an opportunity to create aclear international leader in a sector which should consolidate and ingeographical, product and financial grounds value would be created. We remaincommitted to driving structural change in the sector and seeking the best wayto achieve it in the interest of our shareholders.Our strong balance sheet and good cash flows mean that we can return cash toshareholders as part of the process of establishing a sound long-term debt/equity structure. We are proposing a special dividend of 43 pence per share,bringing the total dividend payable in June 2007 to 50 pence per share. Thisleaves flexibility as we consider further acquisitions and a share buy-backprogramme. We also have flexibility to buy-back up to 10% of the shares in themarket given our longer-term gearing target of 2 times net debt to EBITDA.
Current trading and outlook
The start of 2007 has seen a continuation of the trends seen in the second half of 2006. The strength of our UK product offering and the positions we have created internationally is providing momentum. The mixture of product introductions, larger account wins and steady underlying markets provides confidence. Lead indicators and order books are positive. Against this background, we see 2007 as another year of progress.
V Cocker CBE W B McGrathChairman Chief Executive16th March 2007
OPERATIONAL REVIEW - 2006 PRELIMINARY RESULTS FOR AGA FOODSERVICE GROUP PLC
UK and European Consumer (Revenue ‚£243.1 million and operating profits ‚£25.1 million)
Our UK and European consumer operations had another good year. Revenue rose13.0% to ‚£243.1 million and operating profits rose 9.1% to ‚£25.1 million. Wehave added greater flexibility to our range of cast iron cookers through fueltypes and design and continue to win new converts to radiated heat cooking.Sales of the electric Aga and 3 and 4-oven models grew as the trend towards ourlarger models continued. In 2006 the wood burning Rayburn and Stanley modelssaw marked revivals. We see sales of 20,000 cast iron cookers sold under ourthree brands as a base point on which to build substantially. Of these cookers62% are sold in the UK, 30% in Ireland and the remainder primarily in NorthernEurope and the East Coast of the USA.The link between Aga and Fired Earth for paint and tiles and kitchen furnituresupplied by Grange continues to develop. Fired Earth has shifted from softfurnishings towards kitchen and bathroom furniture and the benefits of therepositioning are starting to be seen. The new catalogue and roll outs of FiredEarth branded paints in two major DIY chains will provide a boost this year.Our brands have distinctive selling processes linked to events anddemonstrations. This will prove important in our major current initiative tohighlight to existing customers the benefits in look, efficiency andfunctionality of our modern ranges as we offer upgrade options to them. Inaddition, new products like the high efficiency Rayburn and the Stanley Supremeare expected to sell strongly this year. The number of home surveys - a goodsales lead indicator - so far this year is up significantly on last year,providing confidence that we will see a rise in revenues this year.Rangemaster's success continues. In 2006 we sold over 70,000 cookers, up 7.6%in the year. The 90cm ranges account for 49% of sales (47% in 2005) and over18% (14% in 2005) are exported - with Ireland and France growing particularlyquickly. The high levels of functionality available, with our hobs and ourthree or four ovens, mean we can offer impressive flexibility alongside value.As we develop the business we are making Rangemaster a highly distinctiveoverall kitchen brand incorporating fridges as well as sinks. We expect thistrend to continue. Rangemaster, as a manufacturing centre, is also nowsupplying products to widen our Falcon, Aga, Heartland and La Cornue offeringsworldwide. During the year we expanded successfully through Divertimenti, ourmulti-channel cookware operation which has two London retail outlets. Thereported numbers also include the ‚£0.8 million cost of our exit from the AFEOnline business. La Cornue - notably in the USA where it is the only cooker inWilliams-Sonoma stores - is performing well. Orders year to date are running 8%up. We can build on this as new lines become available, such as via innovation,combining the advantages of range cookers and built-ins and adding inductionhobs to the Falcon range.
UK and European Foodservice (Revenue ‚£194.8 million and operating profits ‚£18.0 million)
Our UK and European foodservice operations had a good year. Revenues grew 12.7% to ‚£194.8 million and operating profits rose 28.6% to ‚£18.0 million.
The UK foodservice market is yet to see the investment in equipment at a levelto support the underlying growth in eating out and the need to cut energyconsumption translated into materially greater demand. Against that background,the impact of major individual projects remains significant to performance. In2006 we benefited from sports projects including Wembley Stadium and the newAscot racecourse grandstand. Our largest contract was with the Prison Serviceto which we have provided both equipment and ongoing service support under along-term maintenance agreement for a major asset renewal programme. At thestart of 2007 we are again working closely with the Prison Service as well ason some large pub chain roll out programmes. We are also supplying a wide rangeof equipment to the Whole Food Markets for its flagship store in Kensington. Ithas bakery, refrigeration and prime cooking equipment. We have also launchedInfinity II an update of our deep fat fryer which without in-built filtrationprovides a lower cost option whilst still achieving the oil savings from theburner system.Eloma, our German combi-oven manufacturer acquired in February 2006, accountedfor ‚£14.1 million of revenues and contributed ‚£1.3 million in operating profit.Its prospects are excellent internationally.Eloma has technically strong products and its most recent introductions, theCompact six tray and Genius Touch self cooking programmes, are within thattradition. We have added a sharper sales edge. The Eloma 'hot spot' trayaccessory provides a major patented product differentiator which will generatea significant new customer base particularly at the 'smaller table top' end ofthe market, where our Amana microwave operation is already strong.In Bakery our European operations continued to make good progress, notably inEastern Europe, where Poland, Russia and the Ukraine account for 16% of sales.The trend is being driven by the rise of in-store bakeries in supermarkets aswas seen in Western Europe some years ago. In addition, we are seeing thegrowth across our markets of cafƒ© bakeries in which our convection ovens andfridges are central. We have reinforced our position with the artisan bakersthis year with the launch of the Paneotrad, a moulder / divider which cutsproduction time by two hours or a quarter of the total time with commensuratewater, energy and labour savings. We expect it to become in time a standardpiece of equipment globally.
Our major markets remain France and the UK and while these are relatively mature they continue to provide sound platforms for our manufacturing operations working with leading companies like Sainsbury's, Marks & Spencer, Somerfield, Auchan and Carrefour.
Order intake in the year to date is running 7% ahead of the prior year and a good 2007 is expected.
US Foodservice Operations (Revenue ‚£55.5 million and operating profits ‚£3.2 million)
At the start of 2006 we focussed our manufacturing-led operations on ensuringthat our efficiencies, sourcing capabilities and management product expertisewas applied across the operations. This has worked well. A highlight of theyear was the acquisition of Amana Commercial Microwaves from Whirlpool for $49million (‚£26.1 million). Amana is the well-established leader in itsmarketplace, selling to a wide customer base in the USA with major chains likeMcDonalds, KFC and Burger King and with a strong international business. In2006 it contributed ‚£1.8 million on revenues of ‚£9.2 million after the date ofacquisition. We are currently investing in a new production facility close tothe existing Whirlpool factory where Amana products are produced and in twomajor new product lines, which will confirm its market leading position aftertheir launch within the next twelve months.In our established foodservice businesses, revenue growth helped raise profitsalthough these remained below the Group average and our targets. We are makinggood headway with the US buying groups and chains with our hot offering ofAmana, Eloma combis, the Infinity fryer and Stellar Steam, which represents amaterially better product offering than ever before.In Aga Bakery in the USA our doughnut equipment operation, Belshaw, continuesto perform particularly well as it supports the continuing expansion of Dunkin'Donuts and WalMart. We have integrated the management of Adamatic with Belshaw,whose roll lines for bakeries have much in common with some Belshaw lines.After a difficult period for Adamatic caused by weak market conditions and theneed to rationalise our lines and cut costs which reduced profits by ‚£0.8million in the year, the business is starting to recover.
US Consumer (Revenue ‚£35.5 million and operating profits ‚£1.4 million)
In consumer markets our Marvel business performed particularly well through itswine cabinet and ice maker business to which it has successfully added drawerunits. With the amount of refrigeration increasing both inside the house andoutside, in the 'kitchen in the garden', the market is buoyant. We supplyproduct to Viking, a major in upscale US appliances, and this business wasstrong throughout the year. With a new generation of product underway with newelectronic controllers and dual temperature zones, the prospects are good. Ourcooker business continued to gain recognition. Aga is now a well known brandand we look to our owned and dealer structure to accelerate the growth rate -as we do for Heartland in Canada, where Aga and Rangemaster sourcedproducts are now coming to market to supplement its own established lines.Domain in contrast was operating in a long running, severe consumer downturnfor soft furnishings and its revenues were down 7.4% - typical of the market.This resulted in a ‚£2.9 million operating loss, including costs forreorganisation and stock clearances, in spite of hard work on merchandising andsourcing and on expansion of the Aga led retail space. We have also writtendown the net assets by ‚£3.0 million. This makes the discontinued loss ‚£5.9million. As previously stated, the board concluded a review of the businesswith the assistance of Ernst & Young Orenda and has initiated its sale.
Financials
2006 was a further year in which our well established development plans for the Group saw us make progress both organically and through acquisitions.
Revenue from continuing operations of ‚£528.9 million (2005: ‚£459.9 million) wasup 15.0% on 2005 whilst operating profits from continuing operations of ‚£47.7million, before non-recurring items, were up 15.2%. Profit before taxation fromcontinuing operations was up 7.7% to ‚£46.0 million (2005: ‚£42.7 million).Return on sales was 9%. We have set ourselves the target to drive the return onsales to 10% over the next two years.
Consumer revenues were ‚£278.6 million and accounted for 52.7% of the total whilst foodservice revenues represented the other 47.3%.
The Group continues to expand internationally with the UK representing 49.2%(2005: 55.3%) of the total, Europe 26.9% (2005: 23.1%) and North America 18.7%(2005: 16.6%).
The tax charge was ‚£9.0 million in the period and represented 19.6% of the pre-tax profits - a rate we expect to rise only modestly this year. As anticipated cash tax paid was ‚£8.5 million (2005: ‚£1.2 million repayment).
Earnings per share from continuing operations were 28.7 pence (2005: 26.4pence) calculated on the average number of shares in issue during the year. Theboard, having considered the progress made by the Group, is proposing a 14.1%increase in the full year dividend, raising it from 9.2 pence to 10.5 pence pershare. This means the dividend paid has now more than doubled since 2001. Overthe same period the share price has risen from 216 pence at the end of 2001 toreach an all time high of 434 pence on 28th December 2006 giving the Group amarket capitalisation of ‚£560 million. The share price rose a third in 2006.Our strong financial position provides scope to return more cash toshareholders. The board is therefore, proposing a special dividend of 43.0pence per share. It is also proposing a share consolidation which will allowthe share price performance before and after the return to be more easilycompared. The special dividend will be proposed as an ordinary resolution atthe AGM and is expected to be paid on 1st June along with the 2006 finaldividend. A circular will shortly be sent to shareholders detailing theproposed return and the consolidation.
Operating cashflow performance in the year was similar to last year with an operating profit from continuing operations conversion rate of 85%. Working capital was ‚£71.6 million (2005: ‚£61.5 million) at the year end - acquired companies representing ‚£7.3 million of the increase.
Net capital expenditure in the year was ‚£14.0 million. We spent ‚£14.5 million(2005: ‚£10.6 million) on capital equipment which compares to depreciation of‚£11.1 million (2005: ‚£9.8 million). Of this investment, ‚£3.5 million was on anew facility for Waterford Stanley and ‚£0.3 million was the down payment on anew facility extension for Williams Refrigeration in King's Lynn which willcost ‚£1.3 million in total. We also purchased Marvel's Richmond, Indiana sitefor ‚£1.5 million. Our investment programme continues to help underpin futuregrowth. We also capitalised ‚£4.1 million of intangible expenditure (2005: ‚£3.2million) and amortised ‚£2.5 million (2005: ‚£1.9 million).
We made two foodservice acquisitions in the year; Eloma, the German combi-oven manufacturer in February for ‚£7.8 million and Amana, the market leading commercial microwave oven business for ‚£26.1 million in September. Both businesses have integrated well and contributed in total revenues of ‚£23.3 million and profits of ‚£3.1 million.
We continue to focus attention on our pension schemes. A formal actuarialvaluation by Watson Wyatt, the scheme actuaries, was concluded during the year.This showed an actuarial deficit of ‚£4.8 million at 31st December 2005. At 31stDecember 2006, the scheme was showing a surplus under IAS 19 of ‚£24.4 million(2005: deficit ‚£18.2 million) on assets of ‚£784.6 million (2005: ‚£750.6million) and appraised liabilities of ‚£760.2 million (2005: ‚£768.8 million).Movements in bond yields and actual experience being better than modelexpectations accounted for the improvements. The cash contribution for currentemployees was ‚£5.8 million (2005: ‚£4.9 million). This includes an additional‚£1.0 million contribution towards making good the actuarial deficit. A paymentof ‚£4.0 million to pay off the actuarial deficit will be made in 2007. Thecurrent service cost of ‚£6.9 million in 2006 was offset under IAS 19 by the netreturn on the assets / liabilities of the scheme. The income statement includeda ‚£3.8 million credit (2005: ‚£1.5 million) for pensions. In 2007 the net returnon scheme assets / liabilities is expected to exceed the current service costby around ‚£3 million.The Group ended the year with net debt of ‚£10.9 million (2005: cash ‚£20.4million). CONSOLIDATED INCOME STATEMENTYear to 31st December 2006 2005 ‚£m ‚£mContinuing operations Revenue 528.9 459.9Net operating costs (481.2) (418.5)
________________________________________________________________________________
Group operating profit 47.7
41.4
Non-recurring cost (1.0)
-
Share of post tax result from associate -
0.1
________________________________________________________________________________
Profit before net finance costs and income tax 46.7 41.5Finance income 1.3 2.3Finance costs (2.0) (1.1)
________________________________________________________________________________
Profit before income tax 46.0
42.7
Income tax expense (9.0)
(8.6)
________________________________________________________________________________
Profit for year from continuing operations 37.0
34.1
________________________________________________________________________________
Discontinued operation Post tax (loss) / profit from discontinued operation (5.9)
0.3
________________________________________________________________________________
Profit for year 31.1
34.4
________________________________________________________________________________
Profit attributable to equity shareholders 31.1
34.0
Profit attributable to minority shareholders -
0.4
________________________________________________________________________________
Profit for year 31.1
34.4
________________________________________________________________________________
Earnings per share - continuing operations p pBasic 28.7 26.4Diluted 28.5 26.3 Earnings per share - total operations p pBasic 24.1 26.6Diluted 23.9 26.5
________________________________________________________________________________
p pDividend per share 10.5 9.2
________________________________________________________________________________
CONSOLIDATED BALANCE SHEET As at 31st December 2006 2005 ‚£m ‚£mNon-current assets Goodwill 166.0 154.2Intangible assets 29.1 19.1Property, plant and equipment 85.7 85.3Investments in associates 0.3 0.3Retirement benefit surplus 29.9 -Deferred tax assets 6.5 11.3
________________________________________________________________________________
317.5
270.2
________________________________________________________________________________
Current assets Inventories 94.8 89.4Trade and other receivables 93.0 90.4Current tax assets 7.2 0.1Cash and cash equivalents 43.2 55.4
________________________________________________________________________________
238.2
235.3
Assets held for sale 8.1
-
________________________________________________________________________________
Total assets 563.8 505.5Current liabilities Borrowings (2.4) (2.1)Trade and other payables (115.2) (117.5)Current tax liabilities (14.4) (8.6)Current provisions (5.4) (5.1)
________________________________________________________________________________
(137.4)
(133.3)
________________________________________________________________________________
Net current assets 100.8
102.0
________________________________________________________________________________
Non-current liabilities Borrowings (51.7) (32.9)Other payables (1.0) (0.8)Retirement benefit obligations (5.5) (18.2)Deferred tax liabilities (14.6) (7.6)Provisions (10.1) (11.7)
________________________________________________________________________________
(82.9)
(71.2)
Liabilities held for sale (8.1)
-
________________________________________________________________________________
Total liabilities (228.4)
(204.5)
________________________________________________________________________________
Net assets 335.4
301.0
________________________________________________________________________________
Shareholders' equity Share capital 32.3 32.1Share premium account 67.8 65.8Other reserves 28.5 38.3Retained earnings 204.9 162.5
________________________________________________________________________________
Shareholders' equity 333.5
298.7
Minority interest in equity 1.9
2.3
________________________________________________________________________________
Total equity 335.4
301.0
________________________________________________________________________________
CONSOLIDATED CASH FLOW STATEMENT Year to 31st December 2006 2005 ‚£m ‚£mCash flows from operating activities Cash generated from operations 38.3 37.8Finance income 1.3 2.3Finance costs (1.8) (1.0)Tax (payment) / repayment (8.5) 1.2
________________________________________________________________________________
Net cash generated from operating activities 29.3
40.3
Cash flows from investing activities Acquisition of subsidiaries, net of cash acquired (31.8)
(13.8)
Purchase of property, plant and equipment (14.5)
(10.6)
Expenditure on intangibles (4.1)
(3.2)
Proceeds from disposal of property, plant and equipment and 4.6
0.7
intangibles
________________________________________________________________________________
Net cash used in investing activities (45.8)
(26.9)
________________________________________________________________________________
Cash flows from financing activities Dividends paid to shareholders (12.5)
(11.3)
Net proceeds from issue of ordinary share capital 2.2
2.7
Repayment of loan to associated undertaking -
0.3
Repayment of borrowings acquired with acquisitions (3.0) (4.8)Finance lease repayment (1.8) (0.4)Repayment of borrowings - (3.8)New bank loans raised 21.6 9.1
________________________________________________________________________________
Net cash used in financing activities 6.5
(8.2)
________________________________________________________________________________
Effects of exchange rate changes (2.2)
0.4
________________________________________________________________________________
Net (decrease) / increase in cash and cash equivalents (12.2)
5.6
Cash and cash equivalents at beginning of year 55.4
49.8
________________________________________________________________________________
Cash and cash equivalents at end of year 43.2
55.4
________________________________________________________________________________
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE Year to 31st December 2006 2005 ‚£m ‚£mProfit for year 31.1 34.4
________________________________________________________________________________
Exchange adjustments on net investments (9.8)
5.4
Cash flow hedges -
(0.1)
Actuarial gains / (losses) on defined benefit pension schemes 33.3 (17.5) Deferred tax on items taken direct to reserves
(9.9)
5.3
________________________________________________________________________________
Net gains / (losses) not recognised in income statement 13.6 (6.9) ________________________________________________________________________________
Total recognised income for year 44.7
27.5
________________________________________________________________________________
Attributable to: Equity shareholders 44.7 27.1Minority interests - 0.4
________________________________________________________________________________
Total recognised income for the year 44.7
27.5
________________________________________________________________________________
CONSOLIDATED CASHFLOW STATEMENT - RECONCILIATION
Reconciliation of operating profit to cash flows from operating activities
‚£m ‚£m Operating profit - continuing operations 47.7
41.4
(Loss) / profit - discontinued operations (5.9) 0.3Non-recurring cost (1.0) -Amortisation of intangibles 2.5 1.9Fair value adjustment of assets held for sale 3.0
-
Depreciation 11.1
9.8
Profit on disposal of property, plant and equipment (2.4) (0.2)Increase in inventories (8.6) (4.9)Increase in receivables (10.5) (4.1)Increase / (decrease) in payables 6.1
(3.0)
Decrease in provisions (3.7)
(3.4)
________________________________________________________________________________
Cash flows from operating activities 38.3
37.8
________________________________________________________________________________
SEGMENTAL ANALYSIS 2006 2005 By primary segment - Revenue Operating Segment Segment Revenue Operating Segment Segmentbusiness group profit assets liabilities profit assets liabilities ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m ‚£mUK & European Consumer 243.1 25.1 192.3 62.3 215.2 23.0 167.5 63.4US Consumer 35.5 1.4 32.0 6.5 27.7 2.0 31.5 6.1UK & European Foodservice 194.8 18.0 208.5 50.8 172.8 14.0 182.4 56.9US Foodservice 55.5 3.2 65.7 12.1 44.2 2.4 42.9 9.4______________________________________________________________________________________________________
Total continuing operations 528.9 47.7 498.5 131.7 459.9
41.4 424.3 135.8Discontinued operation 38.8 (5.9) 8.1 8.1 41.9 0.3 14.1 10.0Non-recurring cost - (1.0) - - - - - -Share of result of associate - - - - - 0.1 - -Net finance income - (0.7) - - - 1.2 - -
______________________________________________________________________________________________________
Total 567.7 40.1 506.6 139.8 501.8 43.0 438.4 145.8Provision for businesses sold - - - 5.5 - - - 7.5Tax - (9.0) 13.7 29.0 - (8.6) 11.4 16.2Investments - - 0.3 - - - 0.3 -Cash / borrowings - - 43.2 54.1 - - 55.4 35.0______________________________________________________________________________________________________ Total 567.7 31.1 563.8 228.4 501.8 34.4 505.5 204.5______________________________________________________________________________________________________ There are four main segments, as shown above: UK & European Consumer includesthe Aga, Rangemaster, Fired Earth, Waterford Stanley and Grange brandsoperating mainly in the UK and Europe. The US Consumer segment includes the AgaRanges, Heartland and Marvel brands and operates mainly in North America. TheUK & European Foodservice segment includes the Falcon, Mono, Millers Vanguardand Williams brands operating mainly in the UK and Bongard, Eloma, andPavailler operating in Europe. US Foodservice includes Adamatic, Amana, Belshawand Victory brands operating mainly in North America. All segments have similarcustomer bases, bringing together operations selling into particular marketsand working together to optimise sales in those markets. The discontinuedoperation relates to the soft furnishings line of the business at Domain.Revenue between UK & European and US Consumer was ‚£6.3m (2005: ‚£2.7m). Revenuebetween other business groups whilst growing is not material. Segment assetsinclude property, plant and equipment, intangibles, inventories andreceivables. Segment liabilities comprise operating payables, retirementobligations and provisions. Cash, borrowings and taxation are not included inthe segments. Other external charges and income relating to corporate companiesare apportioned to the UK segments based on revenue. 2006 2005 Amortisation AmortisationBy primary segment - Capital of Capital ofbusiness group expenditure Depreciation intangibles expenditure Depreciation intangibles ‚£m ‚£m ‚£m ‚£m ‚£m ‚£m UK & European Consumer 11.6 6.5 1.3 7.3 5.7 1.0US Consumer 2.6 0.5 0.1 1.5 0.3 0.1UK & European Foodservice 3.0 2.5 1.0 3.2 2.3 0.7US Foodservice 0.8 0.7 0.1 0.6
0.6 0.1 _____________________________________________________________________________________________________ Total continuing operations 18.0 10.2 2.5 12.6
8.9 1.9Discontinued operations 0.6 0.9 - 1.2 0.9 -
_____________________________________________________________________________________________________
Total operations 18.6 11.1 2.5 13.8 9.8 1.9_____________________________________________________________________________________________________ 2006 2005 By secondary segment - Segment Capital Segment Capitalgeographical origin Revenue assets expenditure Revenue assets expenditure ‚£m ‚£m ‚£m ‚£m ‚£m ‚£mUnited Kingdom 274.9 258.3 8.4 267.5 225.3 8.7North America 93.1 99.7 3.4 71.5 72.7 2.2Europe 147.2 132.3 6.2 113.4 119.0 1.7Rest of World 13.7 8.2 - 7.5 7.3 -
_____________________________________________________________________________________________________
Total continuing operations 528.9 498.5 18.0 459.9 424.3 12.6Discontinued operation 38.8 8.1 0.6 41.9 14.1 1.2Tax - 13.7 - - 11.4 -Investments - 0.3 - - 0.3 -Cash - 43.2 - - 55.4 -
_____________________________________________________________________________________________________
Total 567.7 563.8 18.6 501.8 505.5 13.8_____________________________________________________________________________________________________Revenue by geographical destination 2006 2005 ‚£m % ‚£m %United Kingdom 260.3 45.9 254.1 50.6North America 98.8 17.4 76.2 15.2Europe 142.1 25.0 106.4 21.2Rest of World 27.7 4.9 23.2 4.7
________________________________________________________________________________
Total continuing operations 528.9 93.2 459.9
91.7
Discontinued operations 38.8 6.8 41.9
8.3
________________________________________________________________________________
Total operations 567.7 100.0 501.8
100.0
________________________________________________________________________________
NOTES 1. Dividends
The Board are proposing a final dividend amounting to 7.0p per share (2005: 6.2p). An interim dividend of 3.5p per share (2005: 3.0p) has already been paid, making the total dividend for the year 10.5p per share (2005: 9.2p). The final ordinary dividend will be paid on 1st June 2007 to shareholders registered on 27th April 2007.
2. Exchange rates
The income statements of overseas subsidiaries are translated into sterling using average exchange rates and balance sheets are translated at year-end rates. The main currencies and exchange rates are:
Year to 31st December 2006 2005Average EUR 1.47 1.46USD 1.84 1.83Year end EUR 1.48 1.46USD 1.96 1.723. Income tax 2006 2005 ‚£m ‚£m
United Kingdom corporation tax based on a rate of 30% (2005: 30%):
Current tax on income for year 2.4
4.2
Adjustments in respect of prior years 0.7
(1.6)
________________________________________________________________________________
United Kingdom corporation tax 3.1
2.6
Overseas current tax on income for year 4.3
3.9
________________________________________________________________________________
Total current tax 7.4
6.5
________________________________________________________________________________
United Kingdom deferred tax charge in year 2.2
2.9
Overseas deferred tax credit in year (0.6)
(0.8)
________________________________________________________________________________
Total deferred tax 1.6
2.1
________________________________________________________________________________
Total United Kingdom tax 5.3
5.5
Total overseas tax 3.7
3.1
________________________________________________________________________________
Total income tax 9.0
8.6
________________________________________________________________________________
4. Earnings per share 2006 2005 ‚£m ‚£mEarnings Profit for year from continuing operations 37.0
34.1
Minority interests -
(0.4)
________________________________________________________________________________
Earnings from continuing operations - for basic & diluted EPS 37.0 33.7 (Loss) / profit from discontinued operations
(5.9)
0.3
________________________________________________________________________________
Profit for period 31.1
34.0
_________________________________________________________________________________
Weighted average number of shares in issue million
million
For basic EPS calculation 128.9
127.6
Dilutive effect of share options 1.1
0.8
________________________________________________________________________________
For diluted EPS calculation 130.0
128.4
________________________________________________________________________________
Earnings per share p pContinuing operations Basic 28.7 26.4Diluted 28.5 26.3
________________________________________________________________________________
Discontinued operations Basic (4.6) 0.2Diluted (4.6) 0.2
________________________________________________________________________________
Total operations Basic 24.1 26.6Diluted 23.9 26.55. Post balance sheet event
The Group has announced a special dividend of 43.0p to be paid in June 2007 and this will be accompanied by a share consolidation.
2007 FINANCIAL CALENDAR Report and accounts posted 30th March 2007
Record date for final ordinary dividend 27th April 2007 Annual General Meeting
11th May 2007 Final ordinary dividend payable 1st June 2007 2007 half year end 30th June 2007 The financial information set out in this announcement does not constitute theCompany's statutory accounts for the years ended 31st December 2006 and 2005but is derived from those accounts. Statutory accounts for 2005 have beendelivered to the Registrar of Companies and those for 2006 will be deliveredfollowing the Company's Annual General Meeting. The Company's auditor hasreported on these accounts; its reports were unqualified and did not containstatements under section 237(2) or (3) of the Companies Act 1985.
AGA FOODSERVICE GROUP PLCRelated Shares:
AGA.L