Half Yearly Report

14th August 2015  

FOR IMMEDIATE RELEASE

AGA RANGEMASTER GROUP PLC

2015 HALF YEAR RESULTS

REVENUES AND OPERATING PROFITS UP AND MARKETS IMPROVING

TIMETABLE SET FOR ACQUISITION BY THE MIDDLEBY CORPORATION ('MIDDLEBY')

AGA Rangemaster Group plc ('the Group'), the specialist in range cooking and kitchen living, today reports its interim results for the half year ended 30th June 2015. 

Financial highlights

Operational highlights

Offer by Middleby

William McGrath, Chief Executive said: ''Our product investment programmes have ensured we are ready to benefit from the improving trading backcloth. Working with Middleby should provide additional momentum to enable our operations to thrive.''

Enquiries:

AGA RANGEMASTER GROUP PLC

2015 INTERIM MANAGEMENT REPORT

Overview

On 15th July 2015, the Boards of the Group and Middleby announced the terms of a recommended cash offer for the Group at 185 pence per share. Completion of the transaction, which will be implemented by means of a Scheme of Arrangement, is expected to take place by 23rd September 2015. Documentation convening the Court Meeting and the General Meeting of the Group for 8th September 2015 is to be sent to shareholders on 17th August 2015.

First half trading showed the Group make further progress, even though UK market conditions at the start of the period had been subdued. Revenues in the first six months were £125.4 million, up 1.5% on 2014 - up 2.1% at constant currency. Operating profit increased to £2.8 million from £2.4 million in the period and the pattern of profits, heavily weighted to the second half of the year, is expected to continue.

The financial position of the Group continues to be strong with net debt at 30th June 2015 of £3.4 million compared with £2.4 million a year earlier.

Operating performances

The year started quite slowly for AGA cooker sales with consumers continuing to be cautious. Following the election there has been a marked change in attitude. The Dual Control lines first introduced in late 2013 are now well established as the best-selling models. The AGA City60 is established in the market and is attracting a wider audience to the brand. A gas hob version is to be launched this autumn. Of the sales volumes in the first half over 75% were of models launched since mid-2011.

In the UK, Rangemaster had a strong end to the period after a slow start as greater consumer confidence and higher household incomes fed through into expenditure on the home and into house moves. Rangemaster did well with key customers including Dixons Carphone, AO and the independent buying group CIH. John Lewis is now taking more Rangemaster lines and we expect sales to increase as the year progresses. The Rangemaster 60cm line is now firmly established in the market. International sales were ahead of the prior year. We entered the Chinese market and have now made our first sales to consumers.

Sales of cast iron cookers and stove sales in Ireland continued to be slow through a mild spring, which means that Waterford Stanley is yet to return to profitability. There is, however, a marked Dublin-led economic recovery in Ireland from which Rangemaster is benefiting.

AGA Marvel in North America had an excellent first half to the year, with strong sales growth continuing following the launch of our new generation of products last year. Our Greenville Michigan factory, in which we consolidated three factories, is operating at its highest production level since it was opened in 2011.

Fired Earth continued to see strong, profitable growth. Its leading tile range continues to differentiate Fired Earth and is driving the business towards a record sales level.

Grange now operates from a reduced cost base following a further site consolidation in St Symphorien. It has upgraded its retail presentation and is performing satisfactorily in Europe, but is still loss making in North America, where a small team is based in the New York Design Centre.

Current trading and prospects

Our core market remains the UK, and with an economic and political backdrop that is likely to be conducive to increased levels of consumer spending on household goods, from which we expect to see the recent trends of higher sales and profits continue.

With the products brought to market over recent years now well established in their market places, we can look to the remainder of 2015 with confidence.

Offer from Middleby

An offer for the Group has been received from Middleby which the Group's Board has recommended. The related documentation, in which the Board explains its rationale for recommending the proposed offer, is being sent to shareholders on 17th August 2015.

As part of an agreement on pensions, which is conditional on shareholder acceptance of the offer as proposed, the Trustee of the Group's main pension scheme will be concluding the triennial actuarial valuation of the pension scheme being undertaken as at 31st December 2014 on a scheme funding basis that will take account of the support offered by Middleby, and which will show a deficit on this basis of £84 million (deficit as at 31st December 2011: £228 million). If the transaction does not take place the triennial actuarial valuation would need to be completed without the support offered by Middleby. The deficit recovery plan that will be put in place on completion of the 2014 triennial actuarial valuation, on the basis that support is provided by Middleby, will include the payment into the pension scheme of a special contribution funded by Middleby of £10 million shortly after completion of the takeover, another £10 million during January 2016 and further deficit recovery contributions of up to £2.5 million per annum to be paid by the Group over a six year period commencing in 2018.

The covenant offered by Middleby should materially strengthen the pension scheme's security for its members and beneficiaries. In addition to the special contributions funded by Middleby totalling £20 million to be paid into the pension scheme by January 2016, Middleby will provide to the pension scheme an unconditional guarantee of the Group's obligations to the pension scheme of up to £60 million, together with a further conditional guarantee of the Group's obligations to the pension scheme as set out on the scheme's schedule of contributions in place from time to time prospectively of up to an initial £95 million.

Should the shareholders accept the terms of the recommended cash offer then I, along with the other non-executives, will be standing down from the Group's Board and AGA Rangemaster Group plc will cease to be a separately quoted public company. It has been a privilege to work for a Group that has such great brands and I should like to record the gratitude of the Board to the employees of the Group and its subsidiaries that have achieved so much to put the Group in a position to grow - growth which Middleby, with its financial depth and international breadth, makes more readily achievable.

Financial review

Revenue - The revenue of £125.4 million was 1.5% higher than the £123.5 million in the first half of 2014 - in constant currency the increase was 2.1%. The period was characterised by a slow start and a stronger finish.

Operating profit - The operating profit at £2.8 million was up 16.7% on the £2.4 million operating profit reported in the first half of 2014.

Pensions - The half year pension charge of £2.7 million (half year 2014: £2.0 million) was up as the higher year end net deficit on an IAS 19 basis of £72.0 million at 31st December 2014 (31st December 2013: £35.8 million) increased both the interest cost and the service charge - see note 9.

At 30th June 2015, after taking into account benefits and other payments of £22.1 million made from the pension schemes over the half year to 30th June 2015, the assets of the pension schemes had decreased by £9.1 million since the start of the year. The increase in corporate bond yields over the half year to 30th June 2015 was the principal cause of the decrease in the valuation of the pension schemes' liabilities by £34.4 million. The resulting net deficit on an IAS 19 basis was £46.7 million at 30th June 2015, which was the same as the net deficit a year earlier. An update on the Group scheme's actuarial valuation as at 31st December 2014 is included in the 'Offer from Middleby' section.

Net operating costs - Net operating costs included income of £0.7 million (half year 2014: £0.9 million) relating to lease assignments of certain London shops.

Non-recurring costs - There were £3.4 million of non-recurring costs during the period to 30th June 2015, £3.0 million relating to the professional costs incurred in respect of the proposed acquisition of the Group by Middleby. Costs of £0.4 million have also been incurred in respect of a significant ongoing Group restructuring project in the UK as a result of the AGA products being factory finished. Further non-recurring costs may be incurred in the second half.

Finance costs - The finance cost at £0.7 million was in line with the first half of 2014 and relates to the costs of the £60.0 million of bank facilities put in place in November 2012, the £30.0 million of pension scheme guarantees provided from these facilities and interest payable on the Group's EUR and USD hedging loans.

Taxation - The tax credit of £0.1 million for the half year (half year 2014 charge: £0.3 million) includes a tax credit of £0.3 million for transaction costs. UK deferred tax balances have been accounted for at a rate of 20% at 30th June 2015.

Earnings / loss per share - The basic loss per share increased to 5.6 pence after non-recurring costs and the increased pension charge (half year 2014: 0.9 pence). The average number of shares in issue was 69.3 million (the same as the previous half year and year end). The underlying earnings per share before non-recurring costs and pension charges, at standard UK tax rates, increased to 2.5 pence (half year 2014: 1.9 pence).

Dividends - The Board has decided not to pay an interim dividend (half year 2014: £nil).

Balance sheet - The balance sheet remained in a good position. At the period end, working capital, which increased in line with the normal trading cycle in the first half, was £22.6 million (30th June 2014: £23.6 million).

The net pension deficit on an IAS 19 basis at 30th June 2015 was £46.7 million and compares to a net deficit of £72.0 million at 31st December 2014 and £46.7 million at 30th June 2014. The decrease over the half year to 30th June 2015 was primarily a result of the higher liability discount rate adopted - up from 3.5% at 31st December 2014 to 3.75% at 30th June 2015 - which had the impact of decreasing the pension schemes' appraised liabilities.

Net debt at £3.4 million was higher than the £2.4 million at 30th June 2014 and included a payment to Fired Earth management under the cash settled share based payment arrangement of £1.1 million in the period (31st December 2014: net cash £9.2 million).

Net assets of the Group at 30th June 2015 were £104.1 million, up from the £90.7 million at the end of last year, primarily as a result of the decrease in the pension deficit.

Cashflow - The cash used in operating activities saw a higher first half outflow of £8.5 million in the period (half year 2014: £3.7 million outflow). In line with normal seasonality, there was a working capital outflow of £8.9 million (half year 2014: £7.8 million outflow). In the second half of 2014 the working capital inflow was £9.8 million. £1.1 million was paid to Fired Earth's management in the period.

Capital expenditure in the period was £2.9 million (half year 2014: £3.1 million) and the depreciation charge £2.3 million (half year 2014: £2.4 million). Expenditure on intangibles, primarily development costs, was £1.3 million (half year 2014: £1.4 million) and compares to an amortisation charge of £1.2 million (half year 2014: £1.2 million).

Banking facilities - The Group's committed bank facilities mature on 31st August 2016. Assuming that the Group becomes part of Middleby it is envisaged that it will review the Group's ongoing banking requirements. In the event that the acquisition did not take place the facilities will need to be renegotiated.

By order of the Board:

AGA RANGEMASTER GROUP PLC

2015 HALF-YEARLY FINANCIAL REPORT

CONSOLIDATED INCOME STATEMENT

All operations are continuing.

AGA RANGEMASTER GROUP PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

AGA RANGEMASTER GROUP PLC

CONSOLIDATED BALANCE SHEET

AGA RANGEMASTER GROUP PLC

CONSOLIDATED CASH FLOW STATEMENT

AGA RANGEMASTER GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

AGA RANGEMASTER GROUP PLC

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. CORPORATE INFORMATION

The interim condensed consolidated financial statements of the Group for the six months ended 30th June 2015 were authorised for issue in accordance with a resolution of the directors on 14th August 2015.

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, kitchen and related home fashions products.

The interim condensed consolidated financial statements do not comprise the Group's statutory accounts as defined by section 434 of the Companies Act 2006. Statutory accounts for the year ended 31st December 2014 were approved by the Board of directors on 6th March 2015 and were delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, it did not contain an emphasis of matter paragraph and did not contain any statement under section 498(2) or (3) of the Companies Act 2006.

The financial information presented here is unaudited but has been reviewed by the Group's auditor, Ernst & Young LLP. The review report appears at the end of these notes.

2. BASIS OF PREPARATION

The interim condensed consolidated financial statements for the six months ended 30th June 2015 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with International Accounting Standard 34 ('IAS 34') - Interim Financial Reporting as adopted by the European Union.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's Annual Report and Accounts as at 31st December 2014 which have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union.

GOING CONCERN

The directors have considered both the business activities and key risks and uncertainties. The directors have considered the following factors: the Group's ability to generate cash flows, the financial resources available to it, headroom under bank covenants and exposure to credit risk. Based on the Group's cash flow forecasts and projections and taking into consideration a range of potential scenarios and sensitivities and how these may impact on cash flows, facility headroom and bank covenants, the Board is satisfied that the Group will be able to operate within the level of its facilities for the 12 months from today, being the date of issuing this announcement. Having undertaken this assessment, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, and so it has been determined that it is appropriate for the 2015 interim condensed consolidated financial statements to be prepared on a going concern basis. The Group's committed bank facilities mature on 31st August 2016. Assuming that the Group becomes part of Middleby (see the additional information in the 'Offer from Middleby' section) it is envisaged that it will review the Group's ongoing banking requirements. In the event that the acquisition did not take place the facilities will need to be renegotiated.

ESTIMATES

The preparation of the interim condensed consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Future actual results may differ from these estimates.

In preparing these interim condensed consolidated financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation were the same as those applied to the Group's Annual Report and Accounts for the year ended 31st December 2014.

RISKS AND UNCERTAINTIES

There are a number of risks and uncertainties which could have a material impact on the Group's performance over the remaining six months of the financial year and could cause actual results to differ from expected and historical results. The directors do not consider that the principal risks and uncertainties have changed since the publication of the Annual Report and Accounts for the year ended 31st December 2014, which are summarised below:

3. ACCOUNTING POLICIES

The interim condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Group's Annual Report and Accounts for the year ended 31st December 2014 except for the adoption of new standards and interpretations effective as of 1st January 2015, as noted below.

Several new standards and amendments apply for the first time in 2015. However, they do not impact the interim condensed consolidated financial statements or the Annual Report and Accounts of the Group.

The nature and the impact of each new standard / amendment is described below:

Amendments to IAS 19 Defined Benefit Plans: Employee Contributions

IAS 19 requires an entity to consider contributions from employees or third parties when accounting for defined benefit plans. Where the contributions are linked to service, they should be attributed to periods of service as a negative benefit. These amendments clarify that, if the amount of the contributions is independent of the number of years of service, an entity is permitted to recognise such contributions as a reduction in the service cost in the period in which the service is rendered, instead of allocating the contributions to the periods of service. This amendment is effective for annual periods beginning on or after 1st July 2014. This amendment did not have a material impact on the Group.

Annual improvements 2010-2012 Cycle

These improvements are effective from 1st July 2014 and the Group has applied these amendments for the first time in these interim condensed consolidated financial statements. They include:

IFRS 2 Share-based Payment

This improvement is applied prospectively and clarifies various issues relating to the definitions of performance and service conditions which are vesting conditions, including:

• A performance condition must contain a service condition;

• A performance target must be met while the counterparty is rendering service;

A performance target may relate to the operations or activities of an entity, or to those of another entity in the same group;
 

• A performance condition may be a market or non-market condition; and

• If the counterparty, regardless of the reason, ceases to provide service during the vesting period, the service condition is not satisfied.

The above definitions are consistent with how the Group has identified any performance and service conditions which are vesting conditions in previous periods, and thus these amendments do not impact the Group's accounting policies.

IFRS 3 Business Combinations

The amendment is applied prospectively and clarifies that all contingent consideration arrangements classified as liabilities (or assets) arising from a business combination should be subsequently measured at fair value through profit or loss whether or not they fall within the scope of IFRS 9 (or IAS 39, as applicable). This is consistent with the Group's current accounting policy, and thus this amendment does not impact the Group's accounting policy.

IFRS 8 Operating Segments

The amendments are applied retrospectively and clarify that:

• An entity must disclose the judgements made by management in applying the aggregation criteria in paragraph 12 of IFRS 8, including a brief description of operating segments that have been aggregated and the economic characteristics (e.g., sales and gross margins) used to assess whether the segments are 'similar;' and

• The reconciliation of segment assets to total assets is only required to be disclosed if the reconciliation is reported to the chief operating decision maker, similar to the required disclosure for segment liabilities.

The Group has not presented the reconciliation of segment assets to total assets as the reconciliation is not reported to the chief operating decision maker.

IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets

The amendment is applied retrospectively and clarifies in IAS 16 and IAS 38 that the asset may be revalued by reference to observable data on either the gross or the net carrying amount. In addition, the accumulated depreciation or amortisation is the difference between the gross and carrying amounts of the asset. The Group did not record any revaluation adjustments during the current interim period.

IAS 24 Related Party Disclosures

The amendment is applied retrospectively and clarifies that a management entity (an entity that provides key management personnel services) is a related party subject to the related party disclosures. In addition, an entity that uses a management entity is required to disclose the expenses incurred for management services. This amendment is not relevant for the Group as it does not receive any management services from other entities.

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

4. NET OPERATING COSTS AND NON-RECURRING COSTS

There were £3.4 million of non-recurring costs during the period to 30th June 2015, £3.0 million relating to the professional costs incurred in respect of the proposed acquisition of the Group by Middleby - see note 17. Costs of £0.4 million have also been incurred in respect of a significant ongoing Group restructuring project in the UK as a result of the AGA products being factory finished. Further non-recurring costs may be incurred in the second half.

Net operating costs during the period to 30th June 2015 included income of £0.7 million (30th June 2014: £0.9 million) relating to lease assignments of London shops. 

5. SEGMENTAL ANALYSIS

The directors consider that there are two operating segments namely AGA (which comprises the brands and operations of AGA Rayburn, Fired Earth, Grange, Redfyre and Waterford Stanley) and Rangemaster (which comprises the brands and operations of AGA Marvel, Divertimenti, Heartland, La Cornue and Rangemaster). Two areas of the business were identified over which the directors allocate resource, plan purchasing and manufacturing, have combined sales targets, incentives and marketing programmes. These areas were determined to be the level at which the chief operating decision maker ('CODM') makes decisions and were deemed to be the operating segments of 'AGA' and 'Rangemaster'. The strategy as set by the Board is for the Group to be seen as a global consumer brand which sells range cookers, kitchen and related home fashions products internationally with cross selling opportunities creating appreciable competitive advantage for all our individual brands.

The operating results of the operating segments, for which discrete information is available, are regularly reviewed by the CODM, which consists of the chief executive and his senior management team, to make decisions about the resources to be allocated to the segments and assess their performance. Management's focus is on the cross selling of all consumer products to our customer database - e.g. AGA Marvel is responsible for distributing product manufactured in the UK at our Leamington Spa (range cookers) and Telford (cast iron cookers) factories, which are then sold in North America under the AGA brand. Waterford Stanley is the distributor for Rangemaster and Rayburn products into Ireland and Grange has developed products that are sold under its own brand and the Fired Earth brand. Our customers are substantially of the same demographic. At the heart of our sales strategy we look to sell packages of products to our customer base which, for example, may include AGA, Fired Earth, Rangemaster and AGA Marvel branded products. In addition, this is how our senior management are incentivised to achieve Group targets. 

The two operating segments are considered to meet the aggregation criteria of IFRS 8 in full and so the directors consider that there is only one aggregated reportable segment as the two segments have similar economic characteristics, products and services, production processes, types and classes of customer and methods of distribution. All disclosures required under IFRS 8 and IAS 34 have therefore already been given in these interim condensed consolidated financial statements. The directors consider the aggregated reportable segment to be the manufacture and sale of range cookers, kitchen and related home fashions products, from which the Group derives most of its revenue. All Group companies are subject to similar economic forces and comparable regulatory environments.

6. TAXATION

Corporation tax for the interim period to 30th June 2015 has been charged at the estimated rates chargeable for the full year in the respective jurisdictions as follows:

Factors affecting the future tax charge:

Reductions in the rate of UK corporation tax from 20% to 19%, effective from 1st April 2017, and to 18%, effective from 1st April 2020 have been proposed. The changes have not yet been substantively enacted.

Accordingly a rate of 20% has been applied for UK current tax and in the measurement of the Group's deferred tax assets and liabilities as at 30th June 2015.

7. LOSS / EARNINGS PER SHARE

The calculation of the basic and diluted loss / earnings per share ('EPS') is based on the following data:

8. PROPERTY, PLANT & EQUIPMENT

During the six months to 30th June 2015 the Group spent £2.9 million on property, plant and equipment (period to 30th June 2014: £3.1 million). Depreciation in the period was £2.3 million (period to 30th June 2014: £2.4 million). Exchange rate movements also reduced the property, plant and equipment balance by £0.8 million in the period.

9. RETIREMENT BENEFITS

The composition of the pension deficit in the consolidated balance sheet and the net pension charge in the consolidated income statement is as follows:

Details of the movement in the Group's aggregated pension schemes and an update on the main UK pension scheme's actuarial valuation are included in the Interim Management Report.

10. CASH AND BORROWINGS

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 2015 the non-current borrowings are split £0.1 million secured (30th June 2014: £0.2 million) and £13.7 million unsecured (30th June 2014: £13.7 million).

11. PROVISIONS AND SHARE BASED PAYMENTS

Provisions mainly relate to the remaining costs in respect of divested businesses, including possible warranty and indemnity claims, other claims and other costs from third parties. Although the majority of these provisions may be realised in the next accounting period, the exact timing is unclear. The provisions held reflect the remaining settlements and claims in relation to divested businesses.

The remaining share based payment provision of £2.3 million reflects the fair value of the Fired Earth Limited cash settled arrangement based on 12,523 shares at a fair value of £180 each. A payment of £1.1 million was made to Fired Earth management in the period to 30th June 2015.

12. SHARE CAPITAL AND OPTIONS

The number of 46 7/8 pence ordinary shares in issue amounted to 69.3 million on 30th June 2015 (30th June 2014 and 31st December 2014: 69.3 million). This represents £32.5 million of share capital.

Details of the share option schemes were given on page 42 of the Annual Report and Accounts as at 31st December 2014.

13. FINANCIAL INSTRUMENTS

Hedge of net investment in foreign operations

Included in borrowings at 30th June 2015 were loans of EUR 7.5 million and USD 13.7 million, which have been designated as hedges of net investments in operations, based in Europe and the United States. The loans are held as a hedge against the Group's exposure to foreign exchange risk on these investments.

During the six month period ended 30th June 2015, the gain of £0.5 million on the retranslation of the EUR loan and the gain of £0.1 million on the retranslation of the USD loan have been transferred to equity to offset gains and losses on translation of the net investments in subsidiaries.

Carrying value

The carrying value of the Group's financial assets, including trade and other receivables and cash, and financial liabilities, including trade and other payables and borrowings, as disclosed in the consolidated balance sheet, is equivalent to their fair value at the balance sheet date.

14. CONTINGENT LIABILITIES AND COMMITMENTS

The Group has contingent liabilities for certain potential claims from third parties in relation to divested businesses. On the basis of information presently available to them, the directors believe that no material claims are likely to arise for which provision has not been made in these accounts.

The Group has arranged £30.0 million of bank guarantees to guarantee the obligations of the Group to the AGA Rangemaster Group Pension Scheme which may arise in the period up to 31st December 2020.

The Group had no other material contingent liabilities arising in the normal course of business at 30th June 2015.

The Group had capital commitments of £1.8 million at 30th June 2015 (31st December 2014: £0.3 million).

15. RELATED PARTY TRANSACTIONS

The Group currently recharges the AGA Rangemaster Group Pension Scheme with part of the cost of administration. The total amount recharged in the period was £0.1 million (half year 2014: £0.1 million). The amount outstanding at 30th June 2015 was £0.3 million (30th June 2014: £0.2 million).

16. SEASONALITY OF OPERATIONS

The normal seasonal nature of our range cooker, kitchen and home fashions products business is to see higher revenues and operating profits in the second half of the year than in the first half.

17. POST BALANCE SHEET EVENT

On 15th July 2015 the Boards of the Group and Middleby announced the terms of a recommended cash offer by Middleby for the entire issued share capital of the Group for 185 pence per share.

AGA RANGEMASTER GROUP PLC

CAUTIONARY STATEMENT

These interim condensed consolidated financial statements contain 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 directors undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

The 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.

The IMR has been prepared for the Group as a whole and therefore gives greater emphasis to those matters which are significant to AGA Rangemaster Group plc and its subsidiary undertakings when viewed as a whole.

DIRECTORS' RESPONSIBILITY STATEMENT

The directors confirm that these interim condensed consolidated financial statements have been prepared in accordance with IAS 34 as adopted by the European Union and that the IMR includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R, namely:

The directors of AGA Rangemaster Group plc are listed in the Annual Report and Accounts for 31st December 2014, a copy of which is available at www.agarangemaster.com. On 30th April 2015 Paul Jackson resigned as a non-executive director.

By order of the Board:

W B McGrath S M SmithChief Executive Finance Director

AGA RANGEMASTER GROUP PLC

INDEPENDENT REVIEW REPORT TO AGA RANGEMASTER GROUP PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30th June 2015 which comprises the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Cash Flow Statement, Consolidated Statement of Changes in Equity and the related notes 1 to 17. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, 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 Conduct Authority.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of 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 to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30th June 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Ernst & Young LLPBirmingham

14th August 2015

AGA RANGEMASTER GROUP PLC

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