13th Mar 2009 07:00
13th March 2009FOR IMMEDIATE RELEASE AGA RANGEMASTER GROUP PLC 2008 PRELIMINARY RESULTS Year to 31st December 2008 Restated 2007Continuing operations £m £m Revenue 279.4 291.8 Operating profit 11.1 24.4 Profit before tax 14.4 27.0 Basic earnings per share 14.4p 18.9p Shareholders' equity 214.7 355.0 Net cash* 5.8 169.1 EBITDA (before non-recurring costs) 24.6
39.2
*During the year the Group returned £151.2 million to shareholders including a capital return of £139.7 million.
Strategic and operational highlights
- The Group delivered sound profits and had net cash at the end of 2008 leaving us with a strong balance sheet to help us withstand challenging market conditions.
- Overall cooker sales were lower in the year but some lines, notably wood
burning stoves and Rayburn cookers, performed well.
- The underlying order intake is currently down nearly 20% on the prior year
- with the US operations lower but Rangemaster better than the average.
- Given our intention to concentrate on cash conservation through 2009, no
final dividend is proposed, leaving the dividend for 2008 at 4.0 pence,
which was in addition to the capital return of 121.0 pence.
- In 2009 product innovation and the benefits of a lower sterling exchange
rate will help our drive for greater market shares. Cost cuts, reduced
capital expenditure and lower working capital will further strengthen the
cash position.
William McGrath, Chief Executive, commented: "The sound financial base we haveestablished and the benefits of many years of investment in production, productand brands mean that we should be able to deal effectively with the currenteconomic downturn as we work to strengthen our market shares and win newcustomers."
Enquiries:
William McGrath, Chief Executive {0207 404 5959 (today)Shaun Smith, Finance Director {01926 455 731 (thereafter)
Simon Sporborg/Charlotte Kenyon, Brunswick 0207 404 5959
AGA RANGEMASTER GROUP PLC 2008 PRELIMINARY RESULTS CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENT OverviewOur outstanding consumer brands provide the Group with its intrinsic strengthand this has been much needed in the current difficult markets. We haveadjusted rapidly to the challenging economic circumstances seen in a cyclicaldownturn which accelerated as consumer confidence fell in the second half ofthe year and more recently as unemployment has risen.The year started relatively well. We had completed the sale of our foodserviceoperations before market values declined and returned over £150 million toshareholders, paid down our bank debt and kept the Group in a net cashposition. We also reached an agreement with the trustees on the approach to thefinancing of the pension scheme through to 2020. For the continuing operationswe had set performance targets to grow revenue and raise returns. The firsthalf year showed our resilience and operating profits (excluding propertyprofits) rose in the half year even though markets were distinctly tightening.From September onwards we saw marked, sustained declines in activity and orderlevels were down by around 15% in the last third of the year. This had anappreciable impact on profitability and led us to take further action to cutcosts and adjust production levels to re-align them with demand. Having takenthese steps, the outlook is now tied to the assessment of when the markets inwhich we operate first stabilise and then start to recover.
Trading performance
We saw 2008 become more difficult as the year progressed. Hence the marked deterioration in performance which saw second half results appreciably below those achieved in the first half.
For Aga, Rayburn and Stanley, our cast iron cooker brands, volumes were down21.5% in the year. Average selling prices, however, particularly for Agas, werehigher as some customers moved to larger models. Volumes of lower value modelssold to Irish local authorities fell sharply. 40% of sales were outside the UK.Electric Agas represented 60% of sales and 3-oven Agas were 40% - both all timehighs. At Rayburn sales were flat but within the numbers solid fuel burningmodels rose from 36% to 54% of the total - largely at the expense of oilmodels. A strong product line for Aga and Stanley was solid fuel - primarilywood burning - stoves where record volumes were achieved of over 15,000 unitsin Ireland and over 4,500 units in the UK. Cookware continued to do well and weaim to develop this business further in 2009.For Rangemaster six years of sustained growth ended in the second half. Theswift decline of the new build housing market and subsequently the decline inhousing transactions reduced demand, first for the trade-led sink operationsand then for the cooker business. Within the product mix the good underlyingtrend lines continued. The Group had over 40% by volume and over 50% by valueof the UK range cooker market. 90cm width models were again particularlystrong. The breadth of the range with cooker hoods, splash backs, fridges andsinks all provided greater opportunities for customers to buy Rangemasterbranded products - notably we performed particularly well in the rapidlygrowing Rangemaster centres in dealer stores. In France and Belgium we againgrew rapidly and offset weak sales in Ireland. After four years of investment,France and Belgium are now a £6 million market for us. We have around 1,500displays and with range cooking now a firmly established part of the market weare looking for further significant growth.For Fired Earth a good first half gave way to a difficult second half in whichit was again loss making. The fundamentals of the business - the product mixled by tiles and paint backed by bathrooms and with kitchen furnitureincreasingly prominent - sourcing, distribution and the retail presentation areall in good shape. Using these strengths and the links with the Group'scustomer base and the 25th anniversary celebrations all suggest Fired Earth iscapable of improved results in 2009.In North America trading proved tough all year with consumer confidenceremaining low and appliance sales across all regions and markets sharply lower.With Marvel we took the major step of consolidating our two US refrigerationplants and moving to a newly built factory where we expect the lower unit costof production and strong product mix we have developed to generate good profitlevels in due course. Volumes are currently running over 25% below last year.Cooker sales in 2008 in North America similarly fell 5% in a market down 14%.
Financial performance
Total revenues for the Group were ahead at the half year by 1.9% but for thefull year revenues were down 4.2% at £279.4 million (7.6% lower at constantexchange rates) as sales of our core products slowed. Of total revenues 37% wasgenerated outside the UK.Operating profit before non-recurring costs was £16.5 million (2007: £30.4million - restated for £0.6 million of reallocated costs) including a netpension credit of £5.4 million (2007: £6.0 million). The first half performancewas resilient but as consumer confidence weakened the second half revenues weredown by 10% year on year and profits fell.In response to the deteriorating trading conditions the Group implemented aseries of reorganisation measures at a full year cost of £5.3 million. Thesemainly related to the reorganisations and headcount reductions at WaterfordStanley (cost £1.4 million), Rangemaster (cost £0.9 million) and Marvel in theUS (cost £1.9 million). Full year cost savings of over £6 million have beentargeted through these plans. We have also reached a number of agreements withthe workforce and Unions on working shorter hours while demand remainsexceptionally low. This is in the interest of both employees and the Group asit provides us with the ability to respond when the upturn in consumerconfidence materialises. The total number of employees has fallen in the yearfrom 3,169 and is now under 2,700.
Following the £265 million sale of the foodservice operations the Group successfully completed a £139.7 million capital return to shareholders in May which makes the total amount returned to shareholders since 2001 £616 million.
Total net finance income for the year was £3.2 million. In the first half netfinance income was £3.4 million whilst in the second half there was a net costof £0.2 million. The high level of interest income in the first half was aresult of the substantial cash balance the Group held following the foodservicedisposal pending the £139.7 million capital return.The Group continues to take a careful approach to financial planning and thatcoupled with the structural changes in the Group over a period of time has beenthe reason behind our lower than standard rate tax charge. In 2008 the taxcharge was £2.7 million, a rate of 18.8% on pre-tax profits. We expect the ratein 2009 to be close to 20%.Cash inflow from continuing operations decreased by £0.9 million to £4.5million. Inventories were higher as customers destocked in the final quarter ofthe year and trade payables fell as purchases decreased as a result of loweractivity levels in the business. The net disposal cash outflow, following thefoodservice disposal, totalled £2.4 million as fees and expenses of £7.2million were settled.Net cash flow on capital expenditure during the year, including intangibles,was £13.0 million. In the year we invested an initial £4 million in a newfactory for Marvel in the US. The final £2.8 million was paid in January 2009.We expect that capital expenditure in 2009 will be below the depreciationcharge in 2008 of £6.8 million.
The cash tax paid was £2.7 million (2007: £4.9 million). Dividends paid in the year including the capital return totalled £151.2 million (2007: £69.1 million).
At 31st December 2008 the IAS 19 net retirement benefit surplus was £57.5million compared with a £31.3 million surplus at the half year and a 2007year end surplus of £79.6 million. The year end discount rate of 6.4% (2007:5.8%) reflects higher corporate bond rates and has led to a significantreduction in the IAS 19 pension liability to £597.5 million (2007: £697.3million). Scheme assets totalled £655.0 million (2007: £776.9 million) as thefall in equity, property and bond markets all hit market values of assets held.The net pension credit in the year was £5.4 million (2007: £6.0 million) and isexpected to fall to approximately £1.0 million in 2009 based on the directors'view of the expected return on scheme assets based on current yield curves.Cash contributions into the scheme were £1.3 million in the year. A similarlevel is expected in 2009.Basic earnings per share, after taking account of the special capitalrepayments and the reduced number of shares in issue, were 14.4 pence. Thiscompares with 18.9 pence per share in the prior year. The Group ended the yearwith net cash of £5.8 million compared with net cash of £169.1 million at theend of 2007 and £16.9 million at the half year. Since the half year we haveinvested £4 million in the new Marvel factory, spent £2.8 million in cash onthe reorganisation programme and currency movements have increased the value ofcurrency loans held for hedging purposes by £3.2 million. Currency movementsaccount for £19.4 million of the £22.7 million movement in net assets in theyear excluding net cash balances.
Dividend payments
We have a long standing dividend cover target of 2.5 times fully taxedearnings. Given the outturn for 2008, the 4.0 pence interim dividend alreadypaid, the capital return of 121.0 pence and the high degree of uncertaintyabout prospects for 2009, the board has decided not to recommend the payment ofa final dividend this year.
2009: A year of innovation is in a long tradition
2009 sees the Group celebrate 300 years of innovation which runs through bothAga and Rangemaster's history with deeply embedded engineering andmanufacturing skills. Appended is a commentary of the contribution made by theGroup.
The last year as usual has seen a number of significant initiatives:
- The move of the Marvel factory to a new purpose built, state-of-the-art
facility in Greenville, Michigan featuring a new paint plant bringing the
highest quality finishing to the product range. - The introduction of the programmable gas Aga - alongside the electric version - cutting running costs in use by around 25%.
- The introduction of induction technology - bringing the responsiveness of
electric cooking up to the level of a gas hob - first into the Falcon range
and then into the best selling Rangemaster line up. - The launch of a single cavity cooker with a divider to be used when preparing smaller meals - designed to save energy and costs for the consumer. - The introduction of a new, energy efficient generation of wood burning Rayburn cookers and Aga and Stanley stoves responding to the revival of
interest in wood as a carbon neutral fuel which is more cost efficient than
oil.
We are also aligning our electric products to link in with a resurgence ofinterest in cheap rate overnight electricity as major producers seek to findmarkets in heat storage products for their otherwise wasted production frompower stations that cannot be turned off overnight. Similarly, we are workingwith a number of micro generators of electricity who see the Aga as providingan appropriate conduit into the consumer market. These developments are'Aganomics' and 'Rayburnomics' in action emphasising the economic andenvironmental case for cast iron cooking.
So after 300 years, the Group is still innovating and developing its products in line with market trends and customer needs.
Strategy and outlook
Last year we set demanding performance and growth targets that are not readilyachievable in current difficult market conditions. We will retain our target ofa 12% return on sales in the longer term whilst recognising that sales andmargin conservation together with a tight focus on cash flow will be theimmediate priorities of the Group.We have made progress over 2008 in Customer Relationship Management ("CRM") andour objective of making better use of the Group's customer database. Having acentral commercial hub with call centre and marketing resources at the headoffice is proving successful. Recent responses to campaigns, notably by Aga,have been encouraging and such customer contact will contribute substantiallyto enabling us to realise the long-term potential of the Group and our brands.
Our objective is to ensure that we can emerge stronger from the current downturn with improved market positions and to show we have the product platform and targeted customer base on which to build.
Economic conditions are difficult but they continue to evolve rapidly. A keytask is to ensure that we are able to respond quickly to changingcircumstances. The decline in sterling is an advantage when we export to Europeand the USA whilst at the same time handicaps European producers selling intothe UK. With interest rates on savings at historical lows, we are likely to seepeople invest in refurbishing their current homes - even if they are not movinghome. In addition, we have some particularly strong brands and products to taketo customers and our 300 years of innovation; the new product lines stylishlyaddressing the economic and environmental needs of the day.The upgrade options for Aga products underpin our work to re-invigorate salesfrom both existing as well as new customers to Aga. At Rangemaster the completekitchen appliance solution we have is winning support with dealers andconsumers alike.Order intake is currently approximately 20% down on the same time last year andwe are assuming that the order intake will continue to be weak. The operationalgearing of the Group should enable us to respond well as soon as marketconditions ease. The Group is well positioned with a strong balance sheet;outstanding brands; deeply rooted manufacturing skills; product initiatives;and a focus to cash management.The current markets are the least encouraging for many years but we are readyto take on these challenges and expect to become stronger with improved marketshares. Changing with the times is something on which the Group has thrived -through 300 years of innovation.J Coleman W B McGrathChairman Chief Executive13th March 2009 CONSOLIDATED INCOME STATEMENTYear to 31st December Restated 2008 2007 £m £m Continuing operations Revenue 279.4 291.8Net operating costs (268.3) (267.4)
______________________________________________________________________________________
Group operating profit 11.1 24.4 Net pension credit 5.4 6.0Non-recurring cost (5.3) -
______________________________________________________________________________________
Profit before net finance income and income tax 11.2 30.4Finance income 4.8 2.0Finance costs (1.6) (5.4)
______________________________________________________________________________________
Profit before income tax 14.4
27.0
Income tax expense (2.7)
(4.2)
______________________________________________________________________________________
Profit for year from continuing operations 11.7 22.8 Discontinued operations Post tax profit from discontinued operations -
40.7
_____________________________________________________________________________________
Profit for year 11.7
63.5
_____________________________________________________________________________________
Profit attributable to equity shareholders 12.4
63.4
(Loss) / profit attributable to minority (0.7)
0.1
shareholders
______________________________________________________________________________________
Profit for year 11.7
63.5
_____________________________________________________________________________________
Earnings per share - continuing operations p pBasic 14.4 18.9Diluted 14.4 18.7
_____________________________________________________________________________________
p pDividend per share 4.0 11.5 Cash return / special dividend 121.0
43.0
______________________________________________________________________________________
CONSOLIDATED BALANCE SHEET As at 31st December 2008 2007 £m £m Non-current assets Goodwill 70.9 60.1Intangible assets 24.0 18.0Property, plant and equipment 58.7 51.7Retirement benefit surplus 58.7 80.4Deferred tax assets 5.5 2.7
__________________________________________________________________________________
217.8
212.9
__________________________________________________________________________________
Current assets Inventories 63.5 54.9Trade and other receivables 39.9 46.4Current tax assets 2.1 1.5Cash and cash equivalents 42.9 181.5
___________________________________________________________________________________
148.4 284.3 Assets held for sale 1.9 - ____________________________________________________________________________________ Total assets 368.1 497.2Current liabilities Borrowings (9.7) (4.3)Trade and other payables (66.8) (76.4)Current tax liabilities (11.6) (8.7)Current provisions (4.3) (2.6)
___________________________________________________________________________________
(92.4)
(92.0)
__________________________________________________________________________________
Net current assets 56.0
192.3
__________________________________________________________________________________
Non-current liabilities Borrowings (27.4) (8.1)Retirement benefit obligation (1.2) (0.8)Deferred tax liabilities (21.9) (29.9)Provisions (8.7) (9.3)
___________________________________________________________________________________
(59.2)
(48.1)
___________________________________________________________________________________
Total liabilities (151.6)
(140.1)
__________________________________________________________________________________
Net assets 216.5
357.1
__________________________________________________________________________________
Shareholders' equity Share capital 32.5 32.4Share premium account 29.6 68.8Other reserves 95.5 37.1Retained earnings 57.1 216.7
__________________________________________________________________________________
Shareholders' equity 214.7
355.0
Minority interest in equity 1.8
2.1
__________________________________________________________________________________
Total equity 216.5
357.1
__________________________________________________________________________________
CONSOLIDATED CASH FLOW STATEMENT Year to 31st December 2008 2007 £m £m Cash flows from operating activities Cash generated from operations post pensions items 4.5 12.4Finance income 5.0 1.8Finance costs (1.6) (5.0)Tax payment (2.7) (4.9)
____________________________________________________________________________________
Net cash generated from operating activities 5.2
4.3
____________________________________________________________________________________
Cash flows from investing activities Disposal proceeds from sale of subsidiaries less costs (2.4)
259.8
Purchase of property, plant and equipment (10.2)
(17.1)
Expenditure on intangibles (3.3)
(3.9)
Proceeds from disposal of property, plant and equipment 0.5
5.3
____________________________________________________________________________________
Net cash (used in) / from investing activities (15.4)
244.1
____________________________________________________________________________________
Cash flows from financing activities Dividends and cash return paid to shareholders (151.2)
(69.1)
Net proceeds from issue of ordinary share capital and costs of share consolidation (0.1) 1.1Repayment of borrowings (1.5) (43.4)New bank loans raised 22.7 1.7
_____________________________________________________________________________________
Net cash used in financing activities (130.1)
(109.7)
_____________________________________________________________________________________
Effects of exchange rate changes 1.7
(0.4)
_____________________________________________________________________________________
Net (decrease)/increase in cash and cash equivalents (138.6)
138.3
Cash and cash equivalents at beginning of year 181.5
43.2
_____________________________________________________________________________________
Cash and cash equivalents at end of year 42.9
181.5
_____________________________________________________________________________________
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE Year to 31st December 2008 2007 £m £m Profit for year
11.7 63.5 _________________________________________________________________________________________ Exchange adjustments on net investments
19.4 3.1Actuarial (losses)/gains on defined benefit pension schemes (28.7) 27.4Deferred tax on items taken direct to reserves
7.9 (10.8) _________________________________________________________________________________________ Income and expenses recognised directly in equity
(1.4) 19.7
_________________________________________________________________________________________
Transfers to income statement Movement on exchange gains as a result of disposals
- 5.5 _________________________________________________________________________________________ Total recognised income for year
10.3 88.7_________________________________________________________________________________________Attributable to: Equity shareholders 11.0 88.6Minority interests
(0.7) 0.1 _________________________________________________________________________________________ Total recognised income for year
10.3 88.7_________________________________________________________________________________________ CONSOLIDATED CASH FLOW STATEMENT - RECONCILIATION Cash generated from operations Continuing Total 2008 Restated Restated 2007 2007 £m £m £m Profit before income tax - continuing operations 14.4 27.0 27.0 Profit before income tax - discontinued operations - - 13.3 Net finance (income)/costs (3.2) 3.4 3.0 Share based payments expense - 0.5 0.9 Amortisation of intangibles 1.3 1.2 2.2 Depreciation 6.8 7.6 11.2 Loss/(profit) on disposal of property, plant and equipment 0.3 (1.3) (1.3) Increase in inventories (3.6) (7.1) (24.4) Decrease/(increase) in receivables 5.4 (2.2) (9.7) (Decrease)/increase in payables (10.7) 0.7 17.1 Increase/(decrease) in provisions 0.5 (0.1) (0.3) Increase in pensions (6.7) (9.8) (12.1) Pension scheme additional cash contributions - (14.5) (14.5) ______________________________________________________________________________________________ Cash generated from operations post pensions items 4.5 5.4 12.4 ______________________________________________________________________________________________ SEGMENTAL ANALYSIS There are two operating segments which meet the aggregation criteria of IFRS 8in full therefore the directors consider that there is only one reportableaggregated segment, as aggregation is consistent with the core principle thatthe result is to provide information that enable users to evaluate the natureand financial effects of the business activities in which the Group engages andthe economic environments in which it operates. The operating segments havesimilar economic characteristics, products and services, production processes,types and classes of customer and methods used to distribute products. Thedirectors consider the aggregated reportable segment to be the manufacture andsale of range cookers and related home fashions product. Therefore the majorityof the disclosures as required under IFRS 8 have already been given in thesefinancial statements.
Segment assets include property, plant and equipment, intangibles, inventories, retirement benefit surpluses and receivables. Non-current assets exclude retirement benefit surplus and deferred tax assets.
Entity wide disclosures in respect of revenues from external customers and non-current assets are provided below.
2008 2007 Total Non- Total Non- segment current segment current Revenue assets assets Revenue assets assets £m £m £m £m £m £m United Kingdom 175.3 191.0 73.6 182.9 218.1 74.0North America 40.0 55.0 34.4 42.1 37.4 21.1Europe 60.0 71.6 45.6 63.2 56.0 34.7Rest of World 4.1 - - 3.6 - -______________________________________________________________________________________________ Total continuing 279.4 317.6 153.6 291.8 311.5 129.8operations Discontinued operations - - - 279.9 - -Tax - 7.6 - - 4.2 -Cash - 42.9 - - 181.5 -______________________________________________________________________________________________ Total 279.4 368.1 153.6 571.7 497.2 129.8______________________________________________________________________________________________ NOTES 1. DividendsThe directors are not proposing a final dividend in respect of the financialyear ended 31st December 2008 (2007: 7.65p). An interim dividend of 4.0p pershare (2007: 3.85p) has already been paid. A return of cash of £1.21 per sharewas paid during the year (2007: a special dividend was paid of 43.0p pershare).
2. Exchange rates
The income statements of overseas subsidiaries are translated into sterlingusing average exchange rates and balance sheets are translated at year endrates.3. Net pension credit 2008 2007 £m £m Pension cost (3.5) (3.9)Curtailment gain - 0.3Net pensions returns on assets and interest costs 8.9
9.6
_________________________________________________________________________________
Net pension credit 5.4
6.0
_________________________________________________________________________________
4. Income tax 2008 2007 £m £m United Kingdom corporation tax based on a rate of 28.5% (2007: 30%): Current tax on income for year 1.5
2.1
Adjustments in respect of prior years 2.6
(0.3)
________________________________________________________________________________
United Kingdom corporation tax 4.1
1.8
Overseas current tax on income for year 1.4
3.6
________________________________________________________________________________
Total current tax 5.5
5.4
________________________________________________________________________________
United Kingdom deferred tax (credit) / charge in year (1.6)
2.6
Overseas deferred tax credit in year (1.2)
(1.7)
________________________________________________________________________________
Total deferred tax (credit) / charge (2.8)
0.9
________________________________________________________________________________
Total United Kingdom tax 2.5
4.4
Total overseas tax 0.2
1.9
________________________________________________________________________________
Total income tax 2.7
6.3
________________________________________________________________________________
Income tax charge Continuing 2.7 4.2Discontinued - 2.1
________________________________________________________________________________
Total income tax 2.7
6.3
________________________________________________________________________________
5. Earnings per share 2008 Restated 2007 £m £m Earnings Profit after tax for year from continuing operations 11.7
22.8
Minority interests 0.7
(0.1)
________________________________________________________________________________
Earnings from continuing operations - for basic and diluted EPS 12.4
22.7
Profit from discontinued operations -
40.7
________________________________________________________________________________
Profit attributable to equity shareholders 12.4
63.4
________________________________________________________________________________
Weighted average number of shares in issue million million For basic EPS calculation 85.9 120.3
Dilutive effect of share options and Long-Term Incentive Plan 0.2
1.1
________________________________________________________________________________
For diluted EPS calculation 86.1
121.4
________________________________________________________________________________
Earnings per share p pContinuing operations Basic 14.4 18.9Diluted 14.4 18.7
________________________________________________________________________________
Total operations Basic 14.4 52.7Diluted 14.4 52.2
________________________________________________________________________________
6. Non-recurring cost
The £5.3m non-recurring cost relates to redundancy and reorganisation programmes across the Group, primarily at Marvel, Rangemaster and Waterford Stanley.
7. Restatement
The 2007 income statement has been restated by £0.6m between continued operations and discontinued operations due to the correction of the allocation of corporate costs.
2009 Financial Calendar Report and accounts posted 27th March 2009Annual General Meeting 8th May 20092009 half year end 30th June 2009The financial information set out in this announcement does not constitute theCompany's statutory accounts for the years ended 31st December 2008 and 2007.The financial information within this announcement is prepared in line with theaccounting policies presented within the Company's statutory accounts.Statutory accounts for 2007 have been delivered to the Registrar of Companiesand those for 2008 will be delivered following the Company's Annual GeneralMeeting. The Company's auditor has reported on these accounts; its reports wereunqualified and did not contain statements under section 237(2) or (3) of theCompanies Act 1985. APPENDIX
300 YEARS OF INNOVATION : OUR MANUFACTURING TRADITION
Two emblematic projects for us in 2008 were making the gas Aga programmable andtaking induction technology into mainstream cooking products. Both of theseinitiatives fit well into a pattern stretching back to the origins of the Groupthree hundred years ago in which the Group has been a great product innovatorusing its core strengths and experiences in manufacturing.The significance of our Group's 2009 anniversary is internationally recognised.In 1709 our foundry in Coalbrookdale - where the Aga and the Rayburn cookersare made - became the birthplace of industry. Then Abraham Darby was looking toraise cooking pot production levels with his new sand moulds first smeltingiron ore with coke - not charcoal - in his blast furnace. The curves of thecooking pots made the techniques difficult but when mastered they could be usedmore widely and more dependably, notably in the casings for steam enginepistons. The momentum for industrialisation was underway. Subsequently thefoundry became a World Heritage Site and one of which we are very proud. And asin 1709 cast iron cooking pots are a core product.The foundry was where the Ironbridge across the Severn was built in 1779 andfrom there ever more elaborate cast iron railings and models were produced forsale into international markets.A business was sustained in heating stoves and from the mid 19th century castiron range cookers were made there - direct ancestors of the Rayburn (firstbuilt in 1946). After the Second World War production of Aga cookers was alsomoved to Coalbrookdale by the Group - then called Allied Ironfounders.The Coalbrookdale foundry was modernised in the 1990s and today production andenvironmental standards are very high. An example is air quality inCoalbrookdale. On a wall in the foundry is a list of all 32 foundry managersdating back to Abraham Darby himself who have run the foundry with a record ofthe achievements of generations of foundry workers.The thread of innovation runs widely throughout the Group. Rangemaster'smanufacturing base in Leamington Spa is where the modern range cooker wasinvented in 1830 - with a single heat source being used to heat a number ofseparate ovens. The 'Kitchener' won a Gold Medal from Queen Victoria at theGreat Exhibition of 1851 and was to be found in the kitchens of the homes andpalaces of the European elite in the second half of the 19th century. Thebusiness continued to lead in cooking and introduced the first separate grill,dual fuel cooker and the modern range cooker itself.La Cornue's vaulted oven still used to produce the best French food from amyriad of starred French chefs, was invented in 1908 by the Dupuy family. Allof these cooking traditions were re-interpreted by Gustaf Dal©n, the SwedishNobel prize-winning physicist, as a heat storage cooker, the Aga, in 1922.
The Group has long been involved in commercial and domestic oven manufacture. The Falcon cooker operation in Scotland was the heart of the commercial business sold in 2007 and Stanley, our Irish business, was originally an offshoot of it in the 1920s.
Engineering and manufacturing skills are deeply embedded in the Group. Theyhave been sharpened in recent years as the Group has invested heavily in itsmanufacturing facilities, in engineering and in research and development. £50million has been invested in the last five years alone - as we have acceleratedour development programmes.These initiatives are made possible because the Group is open to ideas andinterested in production processes. The Group has invested in a succession ofprojects across our businesses to introduce lean manufacturing into the cultureand to find the best sources of components or - where appropriate - subassemblies for the Group.We have been alive to the progress of industries and technologies around us -most notably motor manufacturing which has set efficiency and effectivenessstandards for many years. Lean manufacturing, notably production flows, use ofrobotics and flexibility in assembly, have all been features of our progress.We have also been watchful in our approach to procurement. We have a sourcingteam in Shanghai that provides access to Far East markets. We have not,however, sought to off-shore core manufacturing competencies leaving usvulnerable to shifts in economic patterns.The Group has deliberately decided to keep core skills, which set its productsapart, close to its core markets and in-house. Hence, we remain manufacturersin the UK of the major product lines while in France we continue to manufacturethe classic La Cornue products and in Canada the classic Heartland products. Inthe USA we decided to keep manufacturing close to Marvel's core USA customerswhile at the same time looking for expansion into European markets.We have a long track record of innovation. Adjusting our product to changingconsumer and market needs is central to our business approach. This is clearlyseen with our Aga and Rayburn products. Over the last six years we haveintroduced a new generation of electric products; we have added a third oveninto the standard Aga footprint and we have made electric and now the gas Aga programmable. We will in the second half of this year be able to offernearly all existing owners opportunities to either trade up or to have theirexisting products made programmable.
A manufacturing area where Britain leads the world is in range cooking - Great British cookers - which we are taking not only to a home market but with determination to export markets.
So after 300 years of innovation, the Group can see clear outlines of where the development story goes next.
vendorRelated Shares:
AGA.L