28th Aug 2009 07:01
28th August 2009FOR IMMEDIATE RELEASE AGA RANGEMASTER GROUP PLC 2009 HALF-YEARLY FINANCIAL REPORT HIGHLIGHTS AGA Rangemaster Group plc ("the Group"), which sells premium branded cookersand refrigerators, is pleased to announce its interim results for the half yearended 30th June 2009.Half year to 30th June Full year 2009 2008 2008 GBPm GBPm GBPm Revenue 117.8 145.1 279.4EBITDA (before non-recurring costs) 3.3 16.0 24.6 Operating (loss) / profit (1.7) 9.0 11.1(Loss) / profit before tax (2.4) 12.3 14.4Basic (loss) / earnings per share (2.3p) 9.5p 14.4pEquity attributable to equity holders of the parent 151.3 183.2 214.7Net cash 2.3 16.9 5.8
Strategic and operational highlights
* Trading results in line with market expectations with a fall in revenue of 19%.
* Sound financial position maintained with net cash of 2.3 million reflecting good first half operating cash flow. * Annualised cost savings of 8 million will be delivered in 2009 from initiatives taken since the start of 2008.
* Energetic response to the market conditions seen with AGA Authentic Upgrade
Programme; new look for Rayburn and new platforms for Rangemaster. * Order intake falls have levelled out at around 20% and heading into the major Autumn sales months we expect sales to start to match comparators impacted by last year's market slowdown. * Purchase of Mercury brand further strengthens market leadership in UK premium cooker market.
"Cost cutting, good cashflow management and resilient trading are central components of our 2009 story. We have the product and sales initiatives in place now to respond should the Autumn selling season bring the hoped for bounce-back in consumer confidence."
William McGrath Chief ExecutiveEnquiries:William McGrath, Chief Executive 020 7404 5959 (today)Shaun Smith, Finance Director 01926 455 731
(thereafter)
Simon Sporborg / Charlotte Kenyon (Brunswick) 020 7404 5959
2009 INTERIM MANAGEMENT REPORT OverviewThe Group has continued to work hard in the first half of 2009 to adjust to thereduced levels of demand caused by the economic climate and against thatbackdrop has produced satisfactory results for the first half of the year. Thehousing market is the primary driver of sales of range cookers andrefrigerators - our core area of expertise. With housing transactions sharplydown we have unsurprisingly seen sales down by around 20% in our core marketsof the British Isles and Europe and by more in North America, our mostchallenging market. Fortunately, the Group is well placed to withstand theimpact of the recession with our breadth of strong brands; impressive newproduct pipeline and sound finances - demonstrated by the Group maintaining anet cash position at the half year. With markets and consumer confidenceshowing some more positive signs, we retain our underlying confidence in theprospects for the business given our quality products and market positions.
Half year performance
As anticipated revenues in the first half fell and were 117.8 million - down19% from 145.1 million in the first half of 2008 - reflecting the sharp fallin demand seen particularly from September 2008 onwards. Sales in North Americawere particularly weak at 15.1 million and well below the 2008 level of 20.5million. The revenue falls led to an operating loss of 1.7 million compared toan operating profit of 9.0 million in 2008 and a loss before tax afternon-recurring costs of 2.4 million compared with a profit before tax of 12.3million in the first half of 2008.Given these results, the degree of uncertainty about the outlook and theimportance of keeping strong finances in place, the board has decided tomaintain a cautious approach and not to pay an interim dividend this half year(2008: 4.0p). The position for the full year will be considered carefully whenthe annual results are available and a medium term trading outlook can beassessed at that point.
Operating performances
Larger ticket consumer products have seen substantial sales falls across thesector, even where consumer interest in the products remains high. Our cookerbusiness remained profitable while our refrigeration and home fashionsoperations were not.Cast iron cookers are a central product area for us under the AGA, Rayburn andStanley brands and here sales fell by over 25%. The level of new leadsgenerated was only down 10% but many consumers cautiously delayed purchases.For AGA the trend to electric, including the revived 'Economy 7' models, hasstabilised at around 55% of AGA sales. 14% of cast iron sales were overseas.The new generation of programmable gas and electric models has stimulated thetrade up market. We are encouraged by this trend and will capitalise on thisthrough the AGA Authentic Upgrade Programme, now underway across the UK, whichwill see us offer AGA owners the opportunity to upgrade their cookers or makethem programmable. Programmability can cut running costs by around a quarterper household and make the product more responsive to individual needs.Rangemaster sales which were down around 15%, continue to hold up relativelywell in a falling market. We continue to be the market leader in the UK inrange cookers and the strong routes to market, together with a widenedappliance offering, all contributed to this performance. Over 20% ofRangemaster sales are now outside of the UK. The continental market continuesto grow well - offsetting steep declines in activity in Ireland. La Cornue hada good first half and order intake was ahead of the prior year.In North America we now have our new $10 million Marvel refrigeration factoryin Greenville, Michigan producing more efficiently at significantly lower cost.However, our cooker and refrigeration operations have experienced weak demandacross our range of products. Last year undercounter fridge sales in the firsthalf were 21,700 units; this year 11,800 units.
Our wider consumer home fashions offering led by Fired Earth and Grange similarly had a tough first half, although towards the end of the half year there were some signs of improvement for Fired Earth as the focus on our market leading tile offering paid off.
Managing costs
The Group's response across the board has been to reduce costs and raiseefficiencies. Headcount has been reduced by nearly 550 since December 2007 -short time working and extended shutdowns in 2009 make this equivalent to a 20%headcount reduction on an annualised basis which will reduce the cost base. Wemanage our procurement tightly now as a Group-wide function making us alive tomarket changes while ensuring we have a good grasp of the supply chains seen inthe BS EN ISO 9001 : 2008 (Quality) and BS EN ISO 14001 : 2008 (Environmental)accreditations we have alongside the new BS OHSAS 18001 : 2007 at our principalmanufacturing facilities for occupational health and safety.We have implemented programmes to help us move steadily to a more integratedoperation with functions and processes covering larger parts of the Group. Thishas applied since late 2008 to new product appraisals; marketing, humanresources, procurement and more recently to manufacturing and now distributionin the UK. Our objective is to create a single focused integrated operation.Cost savings from steps taken in 2008 at a cost of 5.3 million are generatingsavings of 6.5 million per annum. Further cost savings of 1.5 million perannum are being realised from recent 2009 non-recurring costs. Further workingcapital reductions are also targeted in the second half. All these steps aredesigned to address the demand falls we have witnessed and to ensure that wehave the operational gearing to respond well when market conditions improve.
Cash flow and financial position
The Group had net cash at 30th June 2009 of 2.3 million and this balancereflects the focus placed on working capital management this year. The firsthalf working capital inflow was 2.7 million compared to a 11.9 millionoutflow in the first half last year - cash generated from inventory reductionswas 5.6 million and this is expected to improve further because of someextended summer shutdowns. Working capital at the half year was 34.1m (30thJune 2008: 41.0m). The Group is well invested with expenditure on capital andresearch and development having been maintained at high levels compared torelated depreciation and amortisation for some years. With the completion ofthe new Marvel factory in Greenville, Michigan of which the final 2.8 millionpayment was made in early 2009, future expenditure is likely to run belowdepreciation levels for some time.
The Group put in place four and a half year banking facilities in Spring 2008 and these continue to meet the Group's needs.
The net assets of the Group at 30th June 2009 were 152.4 million compared with 216.5 million at 31st December 2008. The roll forward in the position of thepension scheme saw the surplus of 57.5 million translate into a deficit of 13.8 million - before deferred tax - because of a fall in yields on double 'A'corporate bonds used to discount liabilities and a rise in the assessed levelof long term inflation. The gap between the actuarial and accounting appraisalof the pension scheme position remains volatile - hence the importance of the2020 agreement the trustees and the Group has designed to facilitate long termplanning for the scheme. The 2008 full actuarial valuation is currently beingprepared.Group strategy
The strategy for the Group during the recession is to continue to enhance the value of our outstanding consumer brands. This will be achieved by:
- Providing new generations of innovative products reflecting contemporary
needs - Strengthened Customer Relationship Management - High brand visibility in our retail outlets and through a strengthened, clear presence in our larger dealers - Strong marketing programmes this Autumn in our campaigns for AGA, Rangemaster and Fired Earth - The establishment of a strong group of partnerships We are making good progress on this strategy. Innovative products include thelaunch of the Rayburn 600 Series with remodelled ovens and a larger hot platewhich is able to offer an attractive modern cooker / boiler combination thatwill link with wider energy management whole house schemes. The single cavityRangemaster oven also provides a complete new platform which we will use toprovide new models for brands like Falcon, La Cornue and AGA Ranges in NorthAmerica.
The 0.4 million acquisition of the distinctive, modern styled Mercury and Thermastone brands is part of our growth plan. These brands generated revenue of over 1.8 million in 2008 and from 2010 will be made in our UK factories.
Our Customer Relationship Management is now run from the Group Head Office and is already having an appreciable impact on our ability to generate repeat business.
We are developing partnerships namely with the National Trust for Fired Earth; with an energy supplier for our cast iron appliances; and with leading designers to celebrate the Great British Cookers represented by AGA, Rangemaster, Rayburn and Falcon.
Risks and uncertainties
There are a number of risks and uncertainties which could have a materialimpact on the Group's performance over the remaining six months of thefinancial year and could cause actual results to differ from expected andhistorical results. The directors do not consider that the principal risks anduncertainties have changed since the publication of the annual report andaccounts for the year ended 31st December 2008. A detailed explanation of therisks and uncertainties can be found on pages 16 to 18 of the annual report.
Current trading and outlook
We are now heading into the key sales period of the year when markets fell awaysharply in 2008. Having seen sales stabilise at around 20% down since theSpring, we hope at least to match the order intake of Autumn 2008. With thestrong product and marketing line ups for this Autumn combining with theincreased impact of the cost saving measures taken, we are as well placed as wecan be given current market conditions. Overall, we approach the second halfwith some renewed optimism.By order of the board:J Coleman W B McGrathChairman Chief Executive28th August 2009Cautionary statement
This Interim Management Report ("IMR") has been prepared solely to provide additional information to shareholders to enable them to assess the Group's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose.
This IMR contains certain forward-looking statements. These are made by the directors in good faith based on the information available to them up to the time of their approval of this report but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.
The Group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.
The IMR has been prepared for the Group as a whole and therefore gives greateremphasis to those matters which are significant to AGA Rangemaster Group plcand its subsidiary undertakings when viewed as a whole. 2009 HALF-YEARLY FINANCIAL REPORT CONSOLIDATED INCOME STATEMENT Half year Half year Half year to June to June December 2009 2008 2008 Unaudited Unaudited Audited
______________________________________
Note GBPm GBPm GBPm Revenue 117.8 145.1 279.4Net operating costs (119.5) (136.1) (268.3)
________________________________________________________________________________________
Group operating (loss) / profit (1.7) 9.0 11.1Net pension credit 10 0.8 2.5 5.4Non-recurring cost 5 (1.3) (2.6) (5.3)
________________________________________________________________________________________
(Loss) / profit before net finance costs and income tax (2.2) 8.9 11.2 Finance income 0.2 3.8 4.8Finance costs (0.4) (0.4) (1.6)
________________________________________________________________________________________
(Loss) / profit before income tax (2.4) 12.3 14.4Income tax expense 6 - (2.5)
(2.7)
________________________________________________________________________________________
(Loss) / profit for the period (2.4) 9.8
11.7
________________________________________________________________________________________
(Loss) / profit attributable to: Equity holders of the parent (1.6) 9.8 12.4Minority interests (0.8) - (0.7)
________________________________________________________________________________________
(Loss) / profit for the period (2.4) 9.8
11.7
________________________________________________________________________________________
(Loss) / earnings per share attributable to equity holders of the parent 7 p p p Basic (2.3) 9.5 14.4Diluted (2.3) 9.5 14.4
________________________________________________________________________________________
p p p
Dividend per share - proposed or paid 8 - 4.0
4.0
Return of cash - paid 8 - 121.0
121.0
________________________________________________________________________________________
All the above results relate to continuing operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Half year Half year Year to to June to June December 2009 2008 2008 Unaudited Unaudited Audited
_____________________________________
GBPm GBPm GBPm (Loss) / profit for the period (2.4)
9.8 11.7 _________________________________________________________________________________________ Exchange adjustments on hedge of net investments
2.1 (0.4) (3.2)Exchange differences on translation of foreign operations (11.6) 3.4 23.0
Actuarial losses on defined benefit pension schemes (72.7) (50.9) (28.7)
Deferred tax on actuarial losses 20.4 14.2 7.9________________________________________________________________________________________ Other comprehensive losses for the period (61.8) (33.7) (1.0)________________________________________________________________________________________Total comprehensive (losses) / income for the period (64.2) (23.9) 10.7________________________________________________________________________________________Attributable to: Equity holders of the parent (63.5) (23.9) 11.0Minority interests (0.7) - (0.3)
_________________________________________________________________________________________
Total comprehensive (losses) / income for the period (64.2) (23.9) 10.7 _________________________________________________________________________________________
CONSOLIDATED BALANCE SHEET Half year Half year Year to to June to June December 2009 2008 2008 Unaudited Unaudited Audited
__________________________________________
Note GBPm GBPm GBPm Non-current assets Goodwill 65.8 61.4 70.9Intangible assets 22.2 19.0 24.0Property, plant and equipment 9 54.3 51.0 58.7Retirement benefit surplus 10 - 32.1 58.7Deferred tax assets 5.5 3.0 5.5
_________________________________________________________________________________________
147.8 166.5
217.8
_________________________________________________________________________________________
Current assets Inventories 54.8 58.9 63.5Trade and other receivables 33.7 39.9 39.9Current tax assets 2.1 1.5 2.1Cash and cash equivalents 11 38.5 36.0 42.9
_________________________________________________________________________________________
129.1 136.3
148.4
_________________________________________________________________________________________
Assets held for sale 1.7 -
1.9
_________________________________________________________________________________________
Total assets 278.6 302.8
368.1
_________________________________________________________________________________________
Current liabilities Borrowings 11 (5.7) (5.6) (9.7)Trade and other payables (54.4) (57.8) (66.8)Current tax liabilities (9.1) (11.3) (11.6)Current provisions 12 (2.1) (3.6) (4.3)_________________________________________________________________________________________ (71.3)
(78.3) (92.4) _________________________________________________________________________________________ Net current assets
57.8 58.0
56.0
_________________________________________________________________________________________
Non-current liabilities Borrowings 11 (30.5) (13.5) (27.4)Retirement benefit obligation 10 (13.8) (0.8) (1.2)Deferred tax liabilities (1.5) (15.7) (21.9)Provisions 12 (9.1) (9.2) (8.7)_________________________________________________________________________________________ (54.9)
(39.2) (59.2) _________________________________________________________________________________________ Total liabilities
(126.2)
(117.5) (151.6) _________________________________________________________________________________________ Net assets
152.4 185.3
216.5
_________________________________________________________________________________________
Equity Share capital 13 32.5 32.4 32.5Share premium account 29.6 30.0 29.6Other reserves 85.9 79.0 95.5Retained earnings 3.3 41.8 57.1
_________________________________________________________________________________________
Equity attributable to equity holders of the parent 151.3 183.2
214.7
Minority interest 1.1 2.1
1.8
_________________________________________________________________________________________
Total equity 152.4 185.3
216.5
_________________________________________________________________________________________
CONSOLIDATED CASH FLOW STATEMENT Half year Half year Year to to June to June December 2009 2008 2008 Unaudited Unaudited Audited
_____________________________________
GBPm GBPm GBPm Note Cash flows from operating activities (Loss) / profit before net finance costs and income tax (2.2) 8.9
11.2
Reconciliation of (loss) / profit before finance costs and income tax to net cash flows: Depreciation of property, plant and equipment 9 3.4 3.8
6.8
Amortisation of intangible assets 0.8 0.7
1.3
Loss on disposal of property, plant and equipment - -
0.3
Share based payments expense 0.1 0.3 -Decrease / (increase) in inventories 5.6 (3.3) (3.6)Decrease in receivables 3.2 0.4 5.4Decrease in payables (6.1) (9.0) (10.7)(Decrease) / increase in provisions (1.5) 1.2
0.5
Increase in pensions balances (1.3) (3.1)
(6.7)
________________________________________________________________________________________
Cash generated from / (used in) operating activities 2.0 (0.1)
4.5Interest paid (0.4) (0.3) (1.6)Tax payment (2.5) (0.2) (2.7)
________________________________________________________________________________________
Net cash (used in) / generated from operating activities (0.9) (0.6)
0.2
________________________________________________________________________________________
Cash flows from investing activities Interest received 0.2 3.8
5.0
Disposal proceeds from sale of subsidiaries less costs 0.3 (3.2)
(2.4)
Purchase of property, plant and equipment 9 (4.3) (2.6)
(10.2)
Expenditure on intangibles (1.2) (0.9)
(3.3)
Proceeds from disposal of property, plant and equipment - -
0.5
________________________________________________________________________________________
Net cash used in investing activities (5.0) (2.9)
(10.4)
________________________________________________________________________________________
Cash flows from financing activities Return of cash and dividends paid to shareholders 8 - (148.4)
(151.2)
Net proceeds from issue of ordinary share capital and cost of share consolidation - 0.2
(0.1)
(Decrease) / increase in borrowings (3.3) 1.3
(1.5)
New bank loans raised 5.3 5.0
22.7
________________________________________________________________________________________
Net cash generated from / (used in) financing activities 2.0 (141.9)
(130.1)
________________________________________________________________________________________
Effects of exchange rate changes (0.5) (0.1)
1.7
________________________________________________________________________________________
Net (decrease) / increase in cash and cash equivalents (4.4) (145.5)
(138.6)
Cash and cash equivalents at beginning of period 42.9 181.5
181.5
________________________________________________________________________________________
Cash and cash equivalents at end of period 10 38.5 36.0
42.9
________________________________________________________________________________________
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Equity attributable to equity holders of the parent Share Share Other Retained Minority Total capital premium reserves earnings Total interests equity GBPm GBPm GBPm GBPm GBPm GBPm GBPm At 1st January 2009 32.5 29.6 95.5 57.1 214.7 1.8 216.5Total comprehensive losses for the period ended 30th June 2009 - - (9.6) (53.9)(63.5) (0.7) (64.2) Share based payments - - - 0.1 0.1
- 0.1 ____________________________________________________________________________________________ At 30th June 2009
32.5 29.6 85.9 3.3 151.3 1.1 152.4____________________________________________________________________________________________ Equity attributable to equity holders of the parent Share Share Other Retained Minority Total capital premium reserves earnings Total interests equity GBPm GBPm GBPm GBPm GBPm GBPm GBPm At 1st January 2008 32.4 68.8 37.1 216.7 355.0 2.1 357.1Total comprehensive income / (losses) for the period ended 30th June 2008 - - 3.0 (26.9) (23.9) - (23.9)Dividends and cash return - - - (148.4) (148.4) - (148.4)Shares issued - 0.2 - - 0.2 - 0.2Share based payments - - - 0.3 0.3 - 0.3Transfer between reserves - (39.0) 38.9 0.1 -
- - ____________________________________________________________________________________________ At 30th June 2008
32.4 30.0 79.0 41.8 183.2 2.1 185.3____________________________________________________________________________________________ Equity attributable to equity holders of the parent Share Share Other Retained Minority Total capital premium reserves earnings Total interests equity GBPm GBPm GBPm GBPm GBPm GBPm GBPm At 1st January 2008 32.4 68.8 37.1 216.7 355.0 2.1 357.1Total comprehensive income / (losses) for year ended 31st December 2008 - - 19.4 (8.4) 11.0 (0.3) 10.7Dividends 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_______________________________________________________________________________________________
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
The interim condensed consolidated financial statements of the Group for thesix months ended 30th June 2009 were authorised for issue in accordance with aresolution of the directors on 27th August 2009.
AGA Rangemaster Group is a public limited company incorporated and domiciled in the UK whose shares are publicly traded on the London Stock Exchange.
The principal activities of the Group are the manufacture and sale of range cookers and related home fashions products.
The interim condensed consolidated financial statements do not comprise theGroup's statutory accounts as defined by section 240 of the Companies Act 1985.Statutory accounts for the year ended 31st December 2008 were approved by theboard of directors on 13th March 2009 and were delivered to the Registrar ofCompanies. The auditors' report on those accounts was unqualified, it did notcontain an emphasis of matter paragraph and did not contain any statement undersection 237 of the Companies Act 1985.The financial information presented here is unaudited but has been reviewed bythe Group's auditor, Ernst & Young LLP. Its review opinion appears at the endof these notes.2. BASIS OF PREPARATION The interim condensed consolidated financial statements for the six monthsended 30th June 2009 have been prepared in accordance with the Disclosure andTransparency Rules of the Financial Services Authority and with InternationalAccounting Standard 34 (IAS 34) 'Interim Financial Reporting' as adopted by theEuropean Union.The interim condensed consolidated financial statements do not include all theinformation and disclosures required in the annual financial statements andshould be read in conjunction with the Group's annual financial statements asat 31st December 2008 which have been prepared in accordance with IFRSs asadopted by the European Union.
The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly condensed financial statements.
3. ACCOUNTING POLICIES
The interim condensed consolidated financial statements have been preparedusing the same accounting policies as used in the preparation of the Group'sannual financial statements for the year ended 31st December 2008 except forthe adoption of new standards and interpretations, noted below.
IAS 1 - Presentation of Financial Statements (revised)
The revised standard separates owner and non-owner changes in equity. Thestatement of changes in equity includes only details of transactions withowners, with non-owner changes in equity presented as a single line. Inaddition, the standard introduces the statement of comprehensive income whichpresents all items of recognised income and expense, either in one singlestatement, or in two linked statements. The Group has elected to present twostatements.
IFRIC 13 - Customer Loyalty Programmes
This interpretation clarifies where goods and services are sold together with acustomer loyalty incentive the arrangement should be accounted for as a sale oftwo things - the goods / services and the incentive. Amounts due from thecustomer should be allocated between these two elements in proportion to theirfair values and recognised as revenue at different times. The adoption of thisinterpretation did not have any material impact on the financial position orperformance of the Group.
IFRIC 16 - Hedges of a Net Investment in a Foreign Operation
This interpretation provides guidance on the accounting for a hedge of a netinvestment. As such it provides guidance on identifying the foreign currencyrisks that qualify for hedge accounting in the hedge of a net investment, wherewithin the Group the hedging instruments can be held in the hedge of a netinvestment and how an entity should determine the amount of foreign currencygain or loss, relating to both the net investment and the hedging instrument,to be recycled on disposal of the net investment. The Group has elected torecycle the gain or loss that arises from the direct method of consolidation,which is the method the Group uses to complete its consolidation. As the Groupdid not dispose of any net investment it has no impact on the financialposition or results.
The adoption of the following amendments resulted in changes to accounting policies but did not have any impact on the financial position or performance of the Group.
IAS 1 - Presentation of Financial Statements
Assets and liabilities classified as held for trading in accordance with IAS 39Financial Instruments: Recognition and Measurement are not automaticallyclassified as current in the balance sheet. No reclassification of financialinstruments between current and non-current have been made as a result of thisamendment.
IAS 16 - Property, Plant and Equipment
The term 'net selling price' has been replaced with 'fair value less costs tosell'. No change in the financial position has been made as a result of thisamendment.IAS 38 - Intangible AssetsExpenditure on advertising and promotional activities is recognised as anexpense when the Group either has a right to access the goods or has receivedthe service. This amendment has no material impact on the financial position orresults of the Group.IAS 27 (revised) - Consolidated and Separate Financial Statements and IFRS 3(revised) Business Combinations are both effective for accounting periodsbeginning on or after 1st July 2009. The directors anticipate that the adoptionof these revised standards will have no material impact on the financialstatements.
4. SEASONALITY OF OPERATIONS
Historically the normal seasonal nature of our range cooker business saw higherrevenues and operating profits in the second half of the year than in the firstsix months. This did not apply in 2008 when market conditions changedmaterially in the second half of the year.
5. SEGMENTAL ANALYSIS
The directors consider that there are two operating segments which meet theaggregation criteria. Therefore the directors consider that there is only onereportable aggregated segment. All disclosures required under IFRS 8 and IAS 34have therefore already been given in these interim condensed consolidatedfinancial statements.
The non-recurring costs relate to redundancy and reorganisation programmes across the Group.
6. TAXATION
Corporation tax for the interim period to 30th June 2009 has been charged atthe estimated rates chargeable for the full year in the respectivejurisdictions as follows: Half year Half year Year to to June to June December 2009 2008 2008
__________________________________________
GBPm GBPm GBPmCurrent tax UK corporation tax - 2.8 4.1Overseas tax - - 1.4
________________________________________________________________________________________
- 2.8 5.5Deferred tax UK corporation tax - (0.3) (1.6)Overseas tax - - (1.2)
________________________________________________________________________________________
- (0.3)
(2.8)
________________________________________________________________________________________
Total income tax expense - 2.5
2.7
________________________________________________________________________________________
UK corporation tax - 2.5
2.5
Overseas tax - -
0.2
________________________________________________________________________________________
Total income tax expense - 2.5
2.7
________________________________________________________________________________________
7. LOSS / EARNINGS PER SHARE
The calculation of the basic and diluted loss / earnings per share is based onthe following data: Half year Half year Year to to June to June December 2009 2008 2008
__________________________________________
GBPm GBPm GBPmLoss / earnings (Loss) / profit after tax (2.4) 9.8 11.7Minority interests 0.8 - 0.7
________________________________________________________________________________________
(Loss) / profit attributable to equity (1.6) 9.8
12.4
holders of the parent
________________________________________________________________________________________
Weighted average number of shares in issue million million
million
For basic EPS calculation 69.2 102.8
85.9
Dilutive effect of share options - 0.8
0.2
________________________________________________________________________________________
For diluted EPS calculation 69.2 103.6
86.1
________________________________________________________________________________________
Half year Half year Year to to June to June December 2009 2008 2008 Total operations p p pBasic (2.3) 9.5 14.4Diluted (2.3) 9.5 14.4
________________________________________________________________________________________
8. DIVIDENDS Half year Half year Year to to June to June December 2009 2008 2008 GBPm GBPm GBPm No final dividend for the year ended 31st December 2008 (2007: 7.65p) - 8.7
8.7
No interim dividend paid (2008: 4.0p) - -
2.8
Return of cash of 1.21 per share - 139.7
139.7
________________________________________________________________________________________
Amounts recognised as distributions to equity holders of the parent in the period - 148.4
151.2
________________________________________________________________________________________
The directors are not proposing to pay an interim dividend in respect of the financial year ending 31st December 2009 (2008: 4.0p).
9. PROPERTY, PLANT & EQUIPMENT
During the six months to 30th June 2009 the Group purchased 4.3m (period to30th June 2008: 2.6m) of property, plant and equipment of which 2.8m,relating to the building of the new Marvel factory in the US, was included inpayables at 31st December 2008. Depreciation in the period was 3.4m (period to30th June 2008: 3.8m). Disposals in the period were nil (period to 30th June2008: nil).10. RETIREMENT BENEFITS Defined benefit scheme assets have been valued at a market value of 637.5m(31st December 2008: 655.0m) and the defined benefit liabilities at 651.3m(31st December 2008: 597.5m), giving a 13.8m deficit at the interim date(31st December 2008: 57.5m surplus). The liabilities have been rolled forwardfrom 31st December 2008 and adjusted to take account of the decrease in bondyields, which have decreased the discount rate from 6.4% to 6.2%. The netpension credit for the period was 0.8m (period to 30th June 2008: 2.5m).11. CASH & BORROWINGS Cash
Cash and cash equivalents at 30th June 2009 was 38.5m (2008: 36.0m) and includes 22.5m which is offset against the provision of a bank guarantee that the Group has provided to the AGA Rangemaster Group Pension Scheme.
Borrowings 30th June 30th June 31st December 2009 2008 2008 GBPm GBPm GBPmBank borrowings Current (unsecured) 5.7 5.6 9.7Non-current 30.5 13.5 27.4
_______________________________________________________________________________
Total 36.2 19.1
37.1
_______________________________________________________________________________
Current and non-current bank borrowings included no obligations under finance leases at 30th June 2009 (30th June 2008: nil, 31st December 2008: nil).
The Group's bank borrowings are primarily loan advances denominated in a number of currencies and have floating interest rates based on LIBOR or foreign equivalents.
At 30th June 2009 the non-current borrowings are split 0.4m secured and 30.1m unsecured.
12. PROVISIONS
During the period 1.2m has been spent in respect of the redundancy and reorganisation programmes across the Group that were provided for at 31st December 2008.
13. SHARE CAPITAL
The number of shares in issue amounted to 69.2m on 30th June 2009 (30th June 2008 and 31st December 2008: 69.2m).
14. FINANCIAL INSTRUMENTS
Included in borrowings at 30th June 2009 were loans of USD13.7m and EUR7.5m,which have been designated as hedges of net investments in operations based inthe United States and Europe. The loans are held as a hedge against the Group'sexposure to foreign exchange risk on these investments.
During the six month period ended 30th June 2009, the gain of 1.2m on the retranslation of the USD loan and the gain of 0.9m on the retranslation of the Euro loan have been transferred to equity to offset any gains and losses on translation of the net investments in subsidiaries.
15. CONTINGENT LIABILITIES & COMMITMENTS
The Group had no material contingent liabilities arising in the normal course of business at 30th June 2009.
The Group has arranged 50.0m of bank guarantees, to guarantee obligations ofthe Company to the AGA Rangemaster Group Pension Scheme which may arise in theperiod up to 2020, of which 22.5m of cash is offset as disclosed in note 11.
The Group had capital commitments of 0.9m at 30th June 2009 (31st December 2008: 0.7m).
16. RELATED PARTY TRANSACTIONS
The Group recharges the Group pension scheme with the cost of administrationand independent advisers paid by the Group. The total amount recharged in theperiod was 0.1m (half year to 30th June 2008: 0.1m). The amount outstandingat 30th June 2009 was nil (30th June 2008: 0.1m). STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors' confirm that these condensed consolidated interim financial statements have been prepared in accordance with IAS 34 as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R, namely:
- an indication of important events that have occurred during the first six
months and their impact on the condensed set of financial statements and a
description of the principal risks and uncertainties for the remaining six
months of the financial year; and
- material related party transactions in the first six months and any
material changes in the related party transactions described in the last
annual report.
The directors of AGA Rangemaster Group plc are listed in the annual report for31st December 2008.By order of the boardW B McGrathChief ExecutiveS M SmithFinance Director
INDEPENDENT REVIEW REPORT TO THE MEMBERS OF AGA RANGEMASTER GROUP PLC
Introduction
We have been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 30thJune 2009 which comprises the Consolidated Income Statement, ConsolidatedBalance Sheet, Consolidated Statement of Comprehensive Income, ConsolidatedStatement of Changes in Equity, Consolidated Cash Flow Statement and therelated notes 1 to 16. We have read the other information contained in thehalf-yearly financial report and considered whether it contains any apparentmisstatements or material inconsistencies with the information in the condensedset of financial statements.This report is made solely to the company in accordance with guidance containedin ISRE 2410 (UK and Ireland) 'Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity' issued by the AuditingPractices Board. To the fullest extent permitted by law, we do not accept orassume responsibility to anyone other than the company, for our work, for thisreport, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
As disclosed in note 2, the annual financial statements of the Group areprepared in accordance with IFRSs as adopted by the European Union. Thecondensed set of financial statements included in this half-yearly financialreport has been prepared in accordance with International Accounting Standard34, 'Interim Financial Reporting', as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview.Scope of reviewWe conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, 'Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity' issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly,we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us tobelieve that the condensed set of financial statements in the half-yearlyfinancial report for the six months ended 30th June 2009 is not prepared, inall material respects, in accordance with International Accounting Standard 34as adopted by the European Union and the Disclosure and Transparency Rules ofthe United Kingdom's Financial Services Authority.Ernst & Young LLPBirmingham MAIN ADDRESSES AND ADVISERS
Head office and registered office
AGA Rangemaster Group plcJuno DriveLeamington SpaWarwickshireCV31 3RGTelephone: 01926 455 755Fax: 01926 455 749e-mail: [email protected]: www.agarangemaster.comRegistered in England No. 354715RegistrarsEquinitiAspect HouseSpencer RoadLancingWest SussexBN99 6DATelephone (Helpline): 0871 384 2355(Calls to this number are charged at 8p per minute from a BT landline.Other telephone providers' costs may vary).International (Helpline): 0044 (0) 121 415 7047
Auditors
Ernst & Young LLP
Joint financial advisers and stockbrokers
Citigroup Global Markets LimitedNumis Securities Limited
vendorRelated Shares:
AGA.L