20th Oct 2008 07:00
AGA RANGEMASTER GROUP PLCINTERIM MANAGEMENT STATEMENT
Aga Rangemaster, now a consumer brands group following the sale of its foodservice operations and related return of capital to shareholders, today issues an interim management statement for the period since 30th June 2008.
First half performance was resilient with operating profits of ‚£9 million on turnover of ‚£145 million. In its interim results issued at the end of August the Group reported that it was entering the key autumn selling period against a very challenging trading backcloth and that over the summer, orders were around 5% lower than in the prior year. Recently orders have fallen more than 15% below last year. With the outlook for the UK economy remaining so uncertain, it is now likely that operating profits in the second half will be appreciably below those achieved in the first half.
Cast iron cooker sales have slowed as consumers are cautious even though interest in the products is good. In particular, marketing to existing owners trading up to modern programmable Aga models in gas and electric is proving effective. Rayburn orders are level year-on-year and have good prospects with consumers focusing on heating bills and low running costs. Wood burning cookers and stoves are performing strongly. At Rangemaster we have increased market share but the market itself has been affected by the fall in the number of housing transactions and order levels have recently been significantly below last year. In the US sales of Marvel of fridges have continued to weaken but we have taken action to reduce costs.
Cost and purchasing initiatives continue to be implemented including those previously identified of over ‚£6 million. These included the closure of the Richmond, Indiana factory of Marvel in October and the move of the head office to the new Rangemaster distribution centre in Leamington Spa which now incorporates the Group's marketing and customer relationship management.
The Group has a strong financial base as a result of the strategic steps taken over the last year. Net cash at 30th June 2008 was ‚£16.9 million. In addition management is confident that the Group can trade soundly through the cycle due to its strong balance sheet, market leading brands and an experienced management team focused on costs.
William McGrath, Chief Executive said:
"Consumer markets are clearly weak and the impact of the macro economic environment is being felt. We are confident we are well placed to weather the current downturn with our good finances and breadth of strong brands providing the consumer with a diverse product offering. We are particularly encouraged with the sales of wood burning cookers and stoves as we see the customer taking a more proactive economical and environmental position in the home."
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Enquiries:
William McGrath, Chief Executive, Aga Rangemaster Group plc - 01926 455 731 Simon Sporborg/Charlotte Kenyon, Brunswick Group - 020 7404 5959
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