12th Mar 2010 07:00
12th March 2010FOR IMMEDIATE RELEASE AGA RANGEMASTER GROUP PLC 2009 PRELIMINARY RESULTS Year to 31st December 2009 2008 £m £m Revenue 245.0 279.4 EBITDA (before non-recurring costs) 12.6
24.6
Operating profit before amortisation 0.1 12.4 Operating (loss) / profit (1.5) 11.1 Profit before tax 0.5 14.4 Basic earnings per share 2.5p 14.4p Shareholders' equity 133.8 214.7 Net cash 28.0 5.8
Strategic and operational highlights
* Cash balances increased to £28.0 million from £5.8 million in the year
reflecting the emphasis placed on strong business processes, good working
capital management and on cash generation.
* The Group made a profit before tax in an extremely tough year for its core
product lines internationally.
* Markets improved as the year progressed. Rangemaster orders were up in the
year whilst AGA cooker orders were ahead in the last quarter.
* New products backed by strong commercial offers are designed to maintain
the momentum established at the end of 2009.
* The Group expects to contribute an additional £2 million this year and next
to the Group's pension scheme.
William McGrath, Chief Executive commented: "The generation of cash was the bigachievement of 2009 and that remains the focus given the caution needed in thecurrent market. Our lead indicators, however, are positive and after a sloworder intake at the start of the year, the prospects are encouraging headinginto the Spring."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 2009 PRELIMINARY RESULTS CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENT OverviewThe Group responded quickly and well to the downturn in the consumer marketscaused by the recession which made 2009 a tough year. The Group was well placedto do so having maintained a net cash position after returning £140 million incash to shareholders in May 2008 following the well timed Foodservice disposalat the end of 2007. The board prioritised remaining profitable and having morecash at the end of the year than at the start thereby ensuring that the Group'slong-term financing arrangements organised in early 2008 remained unaltered.The stable financial base meant that the Group was free to direct its energiesto work to integrate operations and to have a set of disciplined businessprocesses that apply across the Group. These steps helped to reduce costs in away that would be in the long-term interests of the Group and to sustainproduct investment, positioning the business for an upturn.Trading performance in 20092009 saw sharp falls in demand in the first half before levelling out and, insome areas, strengthening later in the year. These trends were reflected infirst half sales down 18.8% and sales down 12.3% for the full year. This put2009 revenues at £245.0 million down from £279.4 million in 2008. EBITDA (prenon-recurring costs) fell from £24.6 million to £12.6 million. There was anoperating loss in the first half of £1.7 million and a small operating profitin the second half. Non-recurring rationalisation costs were incurred in theyear of £3.6 million primarily from business integration costs and provisionsagainst the carrying value of properties no longer required after theintegration. With net finance income in the year and with pension creditsarising, there was an overall profit before tax in the year. Given the sharpprofit fall and the continuing market uncertainties the board concluded itwould not be appropriate to pay a dividend in respect of 2009.Strategy for 2010The 300 years of innovation we highlighted last year put us in good stead todeal with the current economic cycle. The warmth felt towards our key brandsled by AGA came through strongly in the year - notably through the 300thanniversary of the first smelting of iron ore with coke at the AGA foundrywhich is where the Industrial Revolution began. Our confidence that the powerof our brands will drive strong performance remains. The market conditions of2009, however, required us to modify our ambitions for the business in theshort-term and focus on cutting costs and cash generation to ensure we emergedstronger from the recession. We now have new opportunities to improve furtherour market positions.Our key objectives are:
* To continue to grow and create new markets for our range cookers and cooker
/ boilers. The board sees energy management in the home - seen in new
Government initiatives to boost renewable energy - as a major theme for the
years ahead and believes that the product offering it has been developing
over the last decade is particularly well attuned to future consumer requirements. * To widen the position of range cookers in the UK and Ireland and on the
continent as being at the heart of family life and show that the look and
functionality of the range cooker brings benefits over built-in equivalents
which make up the larger part of the market.
* To become a significant force in the North American appliance market under
the AGA Marvel brand - highlighting the best of European style range
cooking and USA made undercounter refrigeration.
* To use the high level of consumer response we receive, to look to all our
brands to increase the overall sales opportunities in the home by effective
customer relationship management.
With our well managed financial position, we have the financial flexibility toback our brands and to ensure that we use the capacity we have available tobest effect. The board's strategy remains to focus on being the major force inthe range cooker market internationally and to use that to attract consumers tothe wider product offering. We will enhance our marketing effort to support ourproduct introductions and will take market opportunities that saw theacquisition of Mercury in 2009 and saw that of La Cornue, Heartland and Stanleyin earlier years.We have to take into account our pension scheme to which we have alreadyprovided £50 million in guarantees of contingent liabilities. We are finalisingfunding arrangements with the trustees taking account of the 2008 actuarialvaluation. We expect to make additional payments of £2 million into the schemein 2010 and 2011. Total pension contributions could equate to £10 million perannum from 2012 depending on the outturn of the 2011 actuarial valuation.In achieving these objectives the Group is dependent on the skills andcommitment of its employees. It was an exceptionally difficult year in whichshort-time working was needed in some factories and staff reductions were made.The continuing enthusiasm and energy in the Group ensured that confidence grewover the year. The board is, of course, grateful to all the employees for theircontributions. Helen Mahy left the board after six years. I should like tothank her in particular for her important contribution, notably in thedevelopment of our corporate governance practices.Current tradingEconomic uncertainties remain as markets seek to recover from the long anddifficult recession and against that background we remain cautious andconservative in our trading and financial expectations. We have focused onhaving strong business processes and disciplines. We will continue to drivedown costs and to generate cash as we did in 2009. In 2010 the Group willcontinue to keep capital expenditure below depreciation and to reduce inventorylevels. The important benefits of integrating AGA and Rangemaster in the UKwill show through. Overall the key factor is the extent of the revenuerecovery.The board has thus taken the right steps to ensure the Group is best placed totake advantage of improved conditions while remaining cautious and able tocontinue with the defensive approach of 2009 that saw costs cut and cashgeneration set as a key driver. At present the board would hope that thecurrent year will show a real improvement. A decision on dividend payments willbe made when the earnings outlook becomes clearer.The cold weather may have slowed short-term activity but it has alsohighlighted the virtues of our heat storage and stove products and home surveynumbers are ahead of 2009 and confidence in the AGA shops is high. ForRangemaster the start of the year has been slower after the VAT rate assistedend of 2009 but the trend lines continue to be positive. For Fired Earth andGrange improvement plans covering both broadening of markets and costreductions are well underway. Headed into the Spring the Group expects revenuesto run ahead of the prior year. BUSINESS AND FINANCE REVIEW Today's AGA Rangemaster Group has its strength in its much loved brands andwell-developed sales channels and structures. In 2008 we concentrated theresources of the Group on our consumer operations as they have long-termsignificant growth potential arising from investments made over many years. Wefocus on producing products for the kitchen - the heart of family life - led byour outstanding range cookers. Looking back, key decisions in the creation ofthe Group had been to make AGA the centre stage brand in 2001 and the decisionto concentrate resources on Rangemaster and the premium range cooker market andto sell off the lower added value brands in 2002. The AGA and Rangemasteroperations have since then worked increasingly closely together. In 2009 wedecided to integrate the operational management of the two businesses. This hasworked well for all the core processes from product identification and now formanufacturing and distribution. It means that the Group has a single strongcore cooker operation in the British Isles - encompassing the Group's Irishbrand, Stanley.We knew early in 2009 that it would be a difficult year but we remaineddetermined not to lose sight of the key objectives we had set in 2007 for thedevelopment of the Group. We discuss below the progress made towards thoseobjectives and related 'Key Performance Indicators' ('KPI'). With strong linksacross our international operations, the appliance-led activities are now wellassimilated and able to benefit from the economies of scale and thecustomer-led opportunities of being part of a Group. * KPI I : Grow sales of cast iron cookers 2007 2008 2009 19,600 15,400 12,150 Sales in 2007 have proved to be a peak - when a good level of Irish statesupported orders assisted Stanley sales. From mid 2008 it became clear thatcustomers were deferring expenditure because of weakening markets while at thesame time there was enthusiasm for our modernisation programmes. Our responsewas to continue with the development themes of making the AGA programmableacross the range and adding upgrade options for products in the field. Thisfocus on customers who may have acquired their AGA many years ago was a majornew development making all existing owners potential new customers. The Groupdoes expect a significant number of owners to upgrade their existing model orreturn their existing model for recycling and purchasing a new product over thenext few years. As consumers focused on what they found essential in theirhome, we also emphasised how the warmth and reliability of cast iron cookerswas relevant to modern needs.2009 also saw the Group increase its focus on Rayburn - and not only thesuccessful upgraded wood burning model but now a restyled oil series. Rayburn -the all-in-one cooker/boiler - is not only a great cooker but its boiler - soonto have condensing oil as well as gas models - makes it tremendously flexibleand an attractive alternative to standard boiler systems. With Rayburnlaunching a second generation of control systems linking to renewable energysources, it is a highly relevant modern product. The objective is to ensureRayburn is seen as a clear option to consumers and their installers assessing'heating and eating' options.In Ireland cast iron cooker sales fell again and for the first time the stovebusiness was a similar revenue generator to cookers. Growth in stove sales inIreland and the UK is set to continue as consumers ensure that given energycost and availability concerns, that they have more than one energy source intheir homes.
The Group continues to make the foundry and factory complex in Shropshire more efficient. It has ample capacity to produce above the targeted level.
* KPI II : Grow sales of Rangemaster made cookers 2007 2008 2009 76,000 67,900 60,600 Rangemaster and our wider range cooker brands all proved resilient - withvolumes lower but average selling prices up - and towards the end of 2009orders were running well ahead of 2008 levels. Rangemaster was 14% down inorder values at the half year but full year order values were just ahead of theprior year. The performance reflects the breadth of product and theinternational reach of Rangemaster - with sales on the continent where there issustained expansion in France and now growth in Belgium and Holland and morerecently Germany, being up. Ireland, in contrast, was again well down. Thepurchase of Mercury in August added a further modern style to our range andwith new products to come to market this year under the Mercury brand aimedparticularly at the independent kitchen specialist market - it is proving animportant addition.The range cooker market in the UK is estimated to be around 113,000 units perannum. The total UK equivalent premium built-in cooker market is larger. In2010 Rangemaster and the related brands will emphasise the case for having thehighly functional, attractive range at the heart of modern family life. Ourefficient Leamington Spa factory has the capability of producing well above thetargeted volumes. With higher volume expectations, notably with anticipatedsales in North America of the new AGA Pro+ range, progress can be made in 2010towards our performance objective.
Our cookware operations comprise AGA Cookware and Divertimenti and 2009 was a good year. Divertimenti has a new catalogue and has the potential to grow appreciably. The newly upgraded web shopping sites of both brands have been successful.
* KPI III : Return Fired Earth and Grange to profit
Fired Earth specialises in tiles and paint. It had another tough year asconsumers deferred major projects. Sales on a like-for-like basis were down 17%and did not show a marked improvement in the last quarter. Fired Earth hasbecome tightly run and is admired for its quality and style. To balance thebusiness, Fired Earth has set out to ensure it attracts consumers looking forquality products for everyday purposes at appropriate prices. This developmentof diffusion lines, combined with the new catalogue and the provision ofconsumer credit, is expected to boost Fired Earth with a wider audience.Additionally, a move into fitted kitchens, with Charles Smallbone designedproduct with an affordable luxury message made by Grange, is an excitingdevelopment. The first kitchen in the range attracted the Editor's prize at theHouse Beautiful 2009 Awards and features in our Marylebone High Street storeand soon to be seen in our Adderbury and Cobham stores.Grange similarly had a difficult year as revenues fell sharply - hitting the USdesign centre business particularly hard. Short time working was in place inthe factories for much of the year. There was also a major productionrationalisation programme in Lyon, France with three factories being mergedinto one. The confidence of the dealer base in the product range and prospectsof Grange continues to improve. Orders at the start of 2010 are moreencouraging. Particular effort will be made this year to raise Grange's UKprofile using the database resources of the Group.
One of the key strategic objectives and a key performance indicator for the Group remains to see Grange and Fired Earth return to profit and for the inter-relationships with the wider customer base to prove effective.
* KPI IV : International expansion with half the business to be outside the UK
The largest market for the Group is in the UK. The objective is to makeoverseas markets account for over half the business - up from the current 36%.On the continent we continue to progress where the Grange, La Cornue and Falconbrands are all well established.In North America the Group set about revisiting its approach - accelerated bythe three year decline in the appliance market which is now just bottoming out.We have integrated our activities under AGA Marvel to provide our overallmarket positioning as having available from Europe the best range cookers aswith refrigeration "at its best" - made in North America at our new Greenville,Michigan factory. We are delighted with our new Greenville production facilitywhich became fully operational in Spring 2009 and has already received ISO 9001and ISO 14001 quality and environmental accreditation. It is producing at asubstantially lower unit cost than was practical at our two previousfacilities. We would like to acknowledge the excellent support of the State ofMichigan in the successful delivery of the project. We have just launched theAGA Pro+ in Canada at C$4,000 - a Rangemaster made product with a single ovenand self cleaning features aimed at a competitive price in the North Americanmarket. This is backed by a suite of appliances including refrigerators anddishwashers similar to that found in design centres in the UK. We feel thatdealers can look to our hot and cold offering to anchor their sales efforts.
We look to markets less mature than the UK for our products to provide sustained sales impetus taking us towards our KPI.
* KPI V : Leveraging the Group's customer database
The Group's contact with its customers is generated by advertising, directmarketing and through our retail operations. This continues through our servicesupport for the products in the field - many of which last for decades. Thisall provides the Group with a large customer database in addition to that ofdealers selling the Group's products.The Group has 670,000 customers on its UK database and nearly another 600,000prospective customers who have contacted the Group. In 2009 the Group receivednearly 60,000 sales enquiries into the contact centre. It has nearly 200,000customers contactable by email. It has 120,000 specifically AGA owners on thedatabase - of which nearly 18,000 were added in 2009.Web traffic increased across the brands in 2009 with AGA receiving over 700,000visitors and Fired Earth nearly 600,000 visitors. At the start of 2010, webenquiries and brochure requests have increased markedly and for Fired Earth andRangemaster web traffic is up over 20%. The Group sees the development ofcustomer contact and the development of closer links in the eyes of customersacross the brands as an important source of growth in the years ahead.
* KPI VI : Return on sales
The Group believes that by raising efficiencies while also investing in productthat there is appreciable operational gearing available in the business. Aninitial target of a return on sales of 10% was set in 2007. Some of the Group'soperations achieved returns above that - but the average was below 10% when therecession impacted the Group. This has not deflected us from the belief thatthe brands and their strength with identifiable customer bases is such thatreturns at or above it - a peak cycle return on sales target is 12% - remain areasonable expectation.
* Raising efficiencies across the Group to improve operational gearing
During the recession the Group has accelerated plans to cut costs, raiseefficiencies and improve operational gearing. In particular, structures havebeen streamlined further - as with AGA and Rangemaster and in the NorthAmerican operations - production facilities integrated - as for AGA Marvel andGrange. Company-wide procurement strategies have helped control costs. Over thelast two years the Group has reduced the cost base by over £9 million throughsuch measures. In addition to major structural programmes it continues toidentify and implement a comprehensive programme of process improvementinitiatives which senior managers have identified.
* Home energy management and new product investments
An underlying theme for the Group is investing in new product. A key area islooking into home energy management. The Group has the background and thetechnologies to play an important part in the changing approach to energymanagement in the home. The Government's new initiative to boost the renewableenergy market will further stimulate interest. The electric AGA uses a smallamount of energy over a long period and can store energy. This works well withthe intermittent nature of wind and solar micro generation. The Rayburn isprimarily an all-in-one cooker and boiler. Its burners can use biofuels : wehave field trials with methane produced from biomass. We are now linkingRayburns with wood burning stoves and solar collectors in a comprehensive homeheating package. Our investment programmes align our products to the renewablesmarkets as they develop. We aim to make our products more flexible -future-proofing purchasers so that they can, if not immediately then in duecourse, take advantage of the rapidly increasing output of micro generation andof reliability of non-fossil fuels.Consumers are concerned to ensure that their homes remain warm and comfortableand that they have reliable energy sources throughout the year. This means thathaving more than one energy source in the home is particularly attractive. Weexpect the rapid growth in stove sales to continue. We sold over 20,000 stovesin 2009 and they are now the core activity of Stanley in Ireland and they are agrowing part of sales in the UK.Pension scheme fundingThe Group continues to consider carefully its obligations to its definedbenefit pension scheme which is large, reflecting the Group's long industrialhistory in the Midlands. The scheme has around 14,000 members of which circa650 are current employees.The triennial valuation as at 31st December 2008 is close to finalisation. Itis likely to show a deficit of well over £100 million at a date when there wasa £57.5 million surplus on an accounting basis. Rolled forward a year to 31stDecember 2009, the actuarial deficit is considered to be potentially around £50million above the accounting deficit of £40.5 million. The Group has previouslyprovided £50 million of guarantees in support of the Group's potentialobligation to the scheme in 2020. The Group currently expects to be asked tocontribute an additional £2 million per annum in 2010 and 2011. From 2012 theGroup expects to be asked to contribute around £10 million annually to meet thecurrent service cost and deficit contributions or to add to the guaranteesalready provided. The 2011 triennial valuation is expected to be concludedbefore these cash contributions or additional guarantees are required.The Group continues to work hard and closely with the trustee of the scheme toensure that the obligations to members are met and the costs to the Group arecarefully monitored and managed as the scheme moves towards the targetedself-sufficiency position in 2020.As part of the management of pension costs, following consultations, thecurrent member pensionable salaries were frozen. This gave rise to acurtailment gain in 2009 against the previous IAS 19 valuation assumptions forfuture salary inflation when applied to higher paid employees of £3.8 millionand will give rise to a curtailment gain in 2010 of around £15 million whenapplied to all other current members.
The Group would like to reduce the contingent risks the scheme creates - should markets make that sensible economically for all relevant parties.
Finance strategyThe Group maintains its conservative approach to finances in light of thedifficult markets and the scale of the Group's pension scheme. The Group lookedto maintain profits during the recession while investing carefully in productfor the future.The Group had moved to a net cash position at the end of 2007 and we tookfurther action to manage the business through a severe economic downturn. Weset the objective of having more cash at the end of the year than at the start.It is, therefore, pleasing against this background to report cash of £28.0million compared to £5.8 million. This gives us a strong position upon which wecan build.
Revenue
Group revenues decreased by 12.3% to £245.0 million from £279.4 million in2008. In constant currency the revenue decrease was 15.7%. Second half revenuesof £127.2 million were down 5.3% from £134.3 million which was much improved onthe first half when revenues of £117.8 million were down 18.8% from the £145.1million reported in the first half of 2008. Of total revenues 36% were outsidethe UK.Operating profitThe operating loss for the year was £1.5 million (2008: profit £11.1 million).The first half loss of £1.7 million was partly offset by a small second halfprofit. The results for the year reflect the significant fall in revenues. Wetook action early to address the revenue decrease by reducing headcount by afurther 200 to below 2,600 following on from a reduction of around 400 in 2008.Non-recurring costs in the year totalled £3.6 million (2008: £5.3 million). Thefurther reorganisations undertaken in the year were at a cost of £2.8 million.Taken together, cost cutting measures implemented in the last two years haveled to cost savings of over £9 million.Finance incomeNet finance income for the year was £0.2 million (2008: £3.2 million). Themovement was principally due to lower interest income resulting from thesubstantial reduction in cash balances following the £140 million cash returnto shareholders in 2008, lower interest rates on cash deposits offset by £0.8million of interest on a tax repayment received.
Taxation
The Group's tax charge was nil on profits before tax of £0.5 million. The Groupconsidered the level of tax paid for years yet to be finalised with the revenueand sought a tax repayment which was received in the second half. There wasaltogether a net tax repayment of £4.0 million relating to prior tax years.
Moving forward the Group expects to pay tax at around the UK standard rate of 28% once the benefit of tax losses arising during the recession have been utilised.
Earnings per shareBasic earnings per share were 2.5 pence (2008: 14.4 pence) based on an averagenumber of shares in issue of 69.2 million (2008: 85.9 million).
Dividends
While no interim dividend has been paid or a final dividend proposed for 2009, the board will continue to keep this under review and intends to return to paying a dividend as soon as it is appropriate to do so.
Cashflow
One of the most encouraging features of the year was the cashflow fromoperational activities which at £25.3 million (2008: £4.5 million) was £20.8million higher. The increase was mainly due to action taken in the first partof the year to destock in response to the downturn - the value of inventoryheld by the Group fell in the year by £15.3 million. Particular focus was alsoplaced on debtor and creditor management across the Group. The net inflow fromworking capital was £22.9 million in the year (2008: outflow of £8.9 million).New capital expenditure projects in the year totalled £3.4 million which makesthe net cash flow on capital items, including intangibles, £8.1 million in theyear. This figure includes the £2.8 million final payment on the AGA Marvelfactory in the US. The depreciation and amortisation of intangibles charge in2009 was £8.7 million (2008: £8.1 million).The resulting net cash position at 31st December 2009 was £28.0 million (2008:£5.8 million). CONSOLIDATED INCOME STATEMENTYear to 31st December 2009 2008 £m £m Revenue 245.0 279.4 Net operating costs (246.5) (268.3)
___________________________________________________________________________________
Group operating (loss) / profit (1.5) 11.1 Net pension credit 5.4 5.4Non-recurring cost (3.6) (5.3)
___________________________________________________________________________________
Profit before net finance income and income tax 0.3 11.2Finance income 1.1 4.8Finance costs (0.9) (1.6)
___________________________________________________________________________________
Profit before income tax 0.5 14.4 Income tax expense - (2.7)
___________________________________________________________________________________
Profit for year 0.5
11.7
___________________________________________________________________________________
Profit attributable to: Equity holders of the parent 1.7 12.4Minority shareholders (1.2) (0.7)
___________________________________________________________________________________
Profit for year 0.5
11.7
___________________________________________________________________________________
Earnings per share p pBasic 2.5 14.4Diluted 2.5 14.4
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p pDividend per share - 4.0 Cash return - 121.0
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All operations are continuing.
CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSSES)/lNCOME Year to 31st December 2009 2008 £m £m Profit for year 0.5 11.7_________________________________________________________________________________________ Exchange adjustments on hedge of net investments 1.6 (3.2)Exchange differences on translation of foreign operations (9.3) 23.0 Actuarial losses on defined benefit pension schemes (104.5) (28.7)Deferred tax on actuarial losses
29.3 7.9 _________________________________________________________________________________________ Other comprehensive losses for the year
(82.9) (1.0) _________________________________________________________________________________________ Total comprehensive (losses) / income for the year
(82.4) 10.7_________________________________________________________________________________________ Attributable to: Equity holders of parent (81.1) 11.0Minority interests
(1.3) (0.3) _________________________________________________________________________________________ Total comprehensive (losses) / income for the year
(82.4) 10.7_________________________________________________________________________________________ CONSOLIDATED BALANCE SHEET As at 31st December 2009 2008 £m £m Non-current assets Goodwill 66.9 70.9Intangible assets 23.2 24.0Property, plant and equipment 50.8 58.7Retirement benefit surplus - 58.7Deferred tax assets 21.7 5.5
__________________________________________________________________________________
162.6
217.8
__________________________________________________________________________________
Current assets Inventories 46.0 63.5Trade and other receivables 31.7 39.9Current tax assets 1.8 2.1Cash and cash equivalents 45.0 42.9
__________________________________________________________________________________
124.5
148.4
Assets held for sale 3.1
1.9 __________________________________________________________________________________ Total assets
290.2
368.1
__________________________________________________________________________________
Current liabilities Borrowings (1.3) (9.7)Trade and other payables (63.2) (66.8)Current tax liabilities (18.4) (11.6)Current provisions (2.4) (4.3)
__________________________________________________________________________________
(85.3)
(92.4)
__________________________________________________________________________________
Net current assets 39.2
56.0
__________________________________________________________________________________
Non-current liabilities Borrowings (15.7) (27.4)Retirement benefit obligation (40.5) (1.2)Deferred tax liabilities (6.1) (21.9)Provisions (8.3) (8.7)
__________________________________________________________________________________
(70.6)
(59.2)
__________________________________________________________________________________
Total liabilities (155.9)
(151.6)
__________________________________________________________________________________
Net assets 134.3
216.5
__________________________________________________________________________________
Shareholders' equity Share capital 32.5 32.5Share premium account 29.6 29.6Other reserves 85.8 95.5Retained (losses) / earnings (14.1) 57.1
__________________________________________________________________________________
Equity attributable to equity holders of the parent 133.8
214.7
Minority interest 0.5
1.8
__________________________________________________________________________________
Total equity 134.3
216.5
__________________________________________________________________________________
CONSOLIDATED CASH FLOW STATEMENT Year to 31st December 2009 2008 £m £mCashflows from operating activities Profit before income tax 0.5
14.4
Reconciliation of profit before income tax to net cashflows: Net finance income (0.2)
(3.2)
Depreciation of property, plant and equipment 7.1
6.8
Impairment of assets held for sale 0.8
-
Amortisation of intangible assets 1.6
1.3
Loss on disposal of property, plant and equipment 0.1
0.3
Share based payments expense 0.2
-
Decrease / (increase) in inventories 15.3
(3.6)
Decrease in receivables 5.6
5.4
Increase / (decrease) in payables 2.0
(10.7)
(Decrease) / increase in provisions (1.3)
0.5
Increase in pensions (6.4)
(6.7)
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Cash generated from operating activities 25.3 4.5Finance income 1.1 5.0Finance costs (0.9) (1.6)Tax receipt/(payment) 4.0 (2.7)
___________________________________________________________________________________
Net cash generated from operating activities 29.5
5.2
___________________________________________________________________________________
Cash flows from investing activities Disposal proceeds from sale of subsidiaries less costs (0.4)
(2.4)
Purchase of Mercury (0.5)
-
Purchase of property, plant and equipment (6.2)
(10.2)
Expenditure on intangibles (1.9)
(3.3)
Proceeds from disposal of property, plant and equipment -
0.5
___________________________________________________________________________________
Net cash used in investing activities (9.0)
(15.4)
___________________________________________________________________________________
Cash flows from financing activities Dividends paid and cash returned to shareholders -
(151.2)
Net proceeds from issue of ordinary share capital and costs of share consolidation - (0.1) Repayment of borrowings (20.5) (1.5)New bank loans raised 2.6 22.7
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Net cash used in financing activities (17.9)
(130.1)
___________________________________________________________________________________
Effects of exchange rate changes (0.5)
1.7
___________________________________________________________________________________
Net increase / (decrease) in cash and cash equivalents 2.1
(138.6)
Cash and cash equivalents at beginning of year 42.9
181.5
___________________________________________________________________________________
Cash and cash equivalents at end of year 45.0
42.9
___________________________________________________________________________________
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year to 31st December 2009
Equity attributable to equity holders of the parent Share Share Other Retained Total Minority Total capital premium reserves earnings interests equity £m £m £m £m £m £m £m At 1st January 2009 32.5 29.6 95.5 57.1 214.7 1.8 216.5 _________________________________________________________________________________________ Comprehensive income Profit / (loss) for the year - - - 1.7 1.7 (1.2) 0.5 Other comprehensive (losses)/ income: Exchange adjustments on hedge of net investments - - 1.6 - 1.6 - 1.6Exchange differences on
translation of foreign operations - - (9.2) - (9.2)
(0.1) (9.3)Actuarial losses on defined benefit pension schemes - - - (104.5) (104.5) - (104.5)Deferred tax on actuarial losses - - - 29.3 29.3 - 29.3 _________________________________________________________________________________________ Total comprehensive losses for the year to 31st December 2009 - - (7.6) (73.5) (81.1) (1.3) (82.4) Transfer between reserves - - (2.1) 2.1 - - - Share based payments - - - 0.2 0.2
- 0.2 __________________________________________________________________________________________ At 31st December 2009 32.5 29.6 85.8 (14.1) 133.8
0.5 134.3 __________________________________________________________________________________________
Year to 31st December 2008
Equity attributable to equity holders of the parent Share Share Other Retained Total Minority Total capital premium reserves earnings interests equity £m £m £m £m £m £m £m At 1st January 2008 32.4 68.8 37.1 216.7 355.0 2.1 357.1 ___________________________________________________________________________________________ Comprehensive income Profit / (loss) for the year - - - 12.4 12.4 (0.7) 11.7 Other comprehensive (losses) /income: Exchange adjustments on hedge of net investments - - (3.2) - (3.2) - (3.2)Exchange differences on
translation of foreign operations - - 22.6 - 22.6
0.4 23.0 Actuarial losses on defined benefit pension schemes - - - (28.7) (28.7) - (28.7)Deferred tax on actuarial losses - - - 7.9 7.9 - 7.9 ___________________________________________________________________________________________ Total comprehensive gains/ (losses) for the year to 31st December 2008 - - 19.4 (8.4) 11.0 (0.3) 10.7 Dividends and cash return - - - (151.2) (151.2) - (151.2) Shares issued 0.1 0.2 - - 0.3 - 0.3Costs associated with share consolidation - (0.4) - - (0.4) - (0.4)Transfer between reserves - (39.0) 39.0 - - - -___________________________________________________________________________________________ At 31st December 2008 32.5 29.6 95.5 57.1 214.7 1.8 216.5 ___________________________________________________________________________________________ SEGMENTAL ANALYSIS An operating segment is a component of an entity that engages in businessactivities from which it may earn revenues and incur expenses, whose operatingresults are regularly reviewed by the chief executive and his senior managementteam to make decisions about the resources to be allocated to the segment andassess its performance and for which discrete financial information isavailable.There are two operating segments, namely AGA (which comprises the brands andoperations of AGA, Fired Earth, Waterford Stanley and Grange) and Rangemaster(which comprises the brands and operations of Rangemaster, AGA Marvel,Heartland, La Cornue and Divertimenti).The two operating segments are considered to meet the aggregation criteria ofIFRS 8 in full and so the directors consider that there is only one aggregatedreportable segment, this is consistent with the core principle that the resultis to provide information that enable users to evaluate the nature andfinancial effects of the business activities in which the Group engages and theeconomic environments in which it operates.Aggregation is based on an assessment that the operating segments have similareconomic characteristics, products and services, production processes and typesand classes of customer and methods used to distribute products. The directorsconsider the activities of the aggregated reportable segment to be themanufacture and sale of range cookers and related home fashions product.Therefore the majority of the disclosures as required under IFRS 8 have alreadybeen given in these financial statements.Segment assets include property, plant and equipment, intangibles, inventories,retirement benefit surpluses and receivables. Cash borrowings and taxation arenot included. Non-current assets exclude retirement benefit surplus anddeferred tax assets.
Entity wide disclosures in respect of revenues from external customers and non-current assets are provided below.
2009 2008 Total Non- Total Non- segment current segment current Revenue assets assets Revenue assets assets £m £m £m £m £m £mUnited Kingdom 156.5 116.3 69.0 175.3 191.0 73.6North America 30.6 43.2 30.5 40.0 55.0 34.4Europe 53.8 62.2 41.4 60.0 71.6 45.6Rest of World 4.1 - - 4.1 - -______________________________________________________________________________________________Total operations 245.0 221.7 140.9 279.4 317.6 153.6Tax - 23.5 - - 7.6 -Cash - 45.0 - -
42.9 - ______________________________________________________________________________________________ Total
245.0 290.2 140.9 279.4 368.1 153.6______________________________________________________________________________________________ NOTES 1. DividendsThe directors are not recommending a final dividend in respect of the financialyear ended 31st December 2009 (2008: nil). No interim dividend was paid (2008:4.0p). In 2008 a return of cash of £1.21 per share was paid during the year.
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 2009 2008 £m £mCurrent service cost of final salary scheme (2.3)
(3.5)
Curtailment gain on freezing of certain final salaries 3.8
-
Pensions returns on assets less interest costs on liabilities 3.9
8.9
___________________________________________________________________________________
Net pension credit 5.4
5.4
___________________________________________________________________________________
4. Income tax 2009 2008 £m £m
United Kingdom corporation tax based on a rate of 28.0% (2008: 28.5%):
Current tax on income for year (1.6)
1.5
Adjustments in respect of prior years 3.5
2.6
___________________________________________________________________________________
United Kingdom corporation tax 1.9
4.1
Overseas current tax on income for year 1.1
1.4
___________________________________________________________________________________
Total current tax charge 3.0
5.5
___________________________________________________________________________________
United Kingdom deferred tax credit (0.8)
(1.6)
Overseas deferred tax credit in year (2.2)
(1.2)
___________________________________________________________________________________
Total deferred tax credit (3.0)
(2.8)
___________________________________________________________________________________
Total United Kingdom tax 1.1 2.5Total overseas tax (1.1) 0.2
___________________________________________________________________________________
Total income tax -
2.7
___________________________________________________________________________________
5. Earnings per share 2009 2008 £m £mEarnings Profit after tax 0.5 11.7Minority interests 1.2 0.7
__________________________________________________________________________________
Profit attributable to equity shareholders - for basic and diluted EPS 1.7
12.4 __________________________________________________________________________________ Weighted average number of shares in issue
million
million
For basic EPS calculation 69.2
85.9
Dilutive effect of share options and Long-Term Incentive Plan -
0.2
__________________________________________________________________________________
For diluted EPS calculation 69.2
86.1
__________________________________________________________________________________
Earnings per share p p Basic 2.5 14.4Diluted 2.5 14.4
__________________________________________________________________________________
6. Non-recurring cost
The £3.6m non-recurring cost relates to £2.8m of predominantly redundancy andreorganisation programmes across the Group, primarily integration costs at AGARangemaster and factory rationalisation programmes at AGA Marvel and Grange and£0.8m of impairment of assets now held for sale in respect of certain propertyassets no longer occupied by the Group.
7. Post balance sheet event
A Deed of Amendment was signed on 12th January 2010 in respect of freezingpensionable salaries for those members whose salaries were not frozen in 2009.A curtailment gain to be calculated by Towers Watson, the actuary, in respectof liabilities accrued to date of around £15m is expected to arise in 2010. 2010 Financial calendar Annual General Meeting 7th May 20102010 half year end 30th June 2010The financial information set out in this announcement does not constitute theCompany's statutory accounts for the years ended 31st December 2009 and 2008.The financial information within this announcement is prepared in line with theaccounting policies presented within the Company's statutory accounts.Statutory accounts for 2008 have been delivered to the Registrar of Companiesand those for 2009 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 498 of the CompaniesAct 2006.
vendorRelated Shares:
AGA.L