29th Aug 2008 07:00
29th August 2008IMMEDIATE RELEASE AGA RANGEMASTER GROUP PLC 2008 INTERIM RESULTS 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 2008.Half year to 30th June Restated 2008 2007 Increase Continuing operations ‚£m ‚£m %Revenue 145.1 142.4 1.9Operating profit (excluding property profits) 9.0 8.9 1.1Profit before tax 12.3 12.3 -Basic earnings per share 9.5p 8.0p 18.8Dividend per share proposed 4.0p 3.85p 3.9Shareholders' equity 183.2 319.0 Net cash / (borrowings) 16.9 (79.7)
* Resilient trading results in the first half with continued top line growth.
* Underlying operating profits excluding property profits and profit before
tax flat year-on-year.
* ‚£140 million capital return completed following ‚£265 million sale of
foodservice operations.
* Strong and flexible balance sheet with net cash of ‚£17 million at 30th June
2008.
* Dividend increased to 4.0 pence per share - increased for a seventh
successive year.
"As Aga Rangemaster we have a strong family of consumer brands with a focus onthe kitchen providing top class home economics. Our performance in the firsthalf proved resilient. Having made disposals, returned cash to shareholders andstill with net cash, the business base is strong. Our products - includingexciting new ones such as programmable gas Agas, wood burning stoves andinduction hob range cookers - are well attuned to the needs of today'scustomers and we expect to emerge stronger and even better positioned followingthis current economic down cycle". William McGrath Chief ExecutiveEnquiries:William McGrath,Chief Executive 020 7404 5959 (today)Shaun Smith, Finance Director 0121 711 6015 (thereafter)
Simon Sporborg / Charlotte Kenyon (Brunswick) 020 7404 5959
AGA RANGEMASTER GROUP PLC 2008 INTERIM RESULTS OverviewAga Rangemaster is a leading consumer brands Group which sells some of the bestknown and loved kitchen appliances in the world. The sale of our commercialfoodservice operations last Autumn and the resulting return of capital thisSpring have positioned the Group well for the future. We now have a soundfinancial base and the opportunity to make the most of our production capacityand routes to market for our family of premium products. Current marketconditions are creating short term constraints for us, but do not detract fromthe validity of our financial goals and our expectation of growing volumes andmargins in our core operations.
Trading performance
Having completed the sale of our foodservice operations last December to AliGroup for ‚£265 million in cash, the trading results for the first half of 2007for those businesses have been reclassified as discontinued. Reported revenuesin the first half of 2008 for continuing operations were ‚£145.1 million; 1.9%above revenues in the prior year. Operating profits were ‚£9.0 million; slightlyabove the ‚£8.9 million delivered in the prior year (excluding a ‚£1.4 millionproperty profit in 2007). In the first half of 2008 an exceptionalreorganisation charge of ‚£2.6 million has been incurred as rationalisationprogrammes were instigated principally within our Irish and US operations. Thisstill left profit before tax flat year on year at ‚£12.3 million benefiting fromhigher net interest income of ‚£3.4 million (2007: ‚£1.0 million payment).The tax rate applicable to the continuing business of 20.3% continues to bebelow the UK standard rate. The return of capital in May incorporated a 3 for 5share consolidation based on the then prevailing share price of 302 pence pershare. This resulted in a reduction in the number of shares in issue to 69.2million from 115.3 million. The average number of shares in issue in 2008 willbe approximately 86 million. Earnings per share from continuing operations forthe first half of 2008 rose in the year by 18.8% from 8.0 pence to 9.5 pence.Reflecting our confidence in the outlook for the business and a strong balancesheet, the Board has decided to maintain its progressive dividend policy acrossthe economic cycle and is declaring an increase in the interim dividend from3.85 pence per share to 4.0 pence per share.
Operations
The Group sells cast iron cookers both through owned retail outlets and viaclosely linked dealers. It sells a wider premium appliance offering primarilythrough distributors. The Group is targeting sales growth of its evolving rangeof heat storage cast iron cookers. In the first half sales were flat for Agaand Rayburn and there was a benefit from a continuing move to larger models.Sales of electric models for Aga continued to increase in the first half andelectric Agas accounted for more than 50% of sales for the first time. Thisfollows from increasing customer recognition of the benefits of programmabilityin terms of flexibility and cost. For Rayburn, the new upgraded wood burnermodels were a success and overall, solid fuel models accounted for over 35% ofsales. Stanley is also seeing a move back to solid fuel models which can partlyoffset the sharp fall in oil-fired cookers seen in the first half as oil pricesrose.Rangemaster continues to perform strongly. Here the volume target is to growsales beyond 76,000 cooker sales a year; the level reached in 2007. In thefirst half volumes were unchanged and encouragingly overall revenues were up 5%as the wider Rangemaster offering which includes splash-backs, cooker hoods andrefrigerators all did well. The emergence of more dealers creating Rangemaster'design centres' within their showrooms has been a particular success. 20% ofRangemaster sales were outside the UK. Volumes in Ireland fell significantly,but this was offset by the expansion achieved in France where the range cookermarket continues to develop well.In the USA our markets continue to be weak and Marvel, the undercounterrefrigeration company, saw volumes fall. Volumes have now stabilised but werestill down over 15% in the half year against strong comparatives in 2007. Weare investing in a new facility in Greenville, Michigan for the refrigerationbusiness so rationalising two factories into one. The $10 million investment isexpected to bring operational benefits immediately the facility opens in early2009. This investment will help Marvel to achieve our established return onsales target of 12%.We have excellent home fashions brands in Fired Earth and Grange. Fired Earthis part of an overall Aga Fired Earth retail operation and saw sales up nearly10% in the first half. Our current tile ranges for kitchens and bathrooms areparticularly strong. Grange - which makes kitchens for Fired Earth - has madefurther good progress in Europe, although the US operation, which has struggledfor some years and has been subject to further cost cutting measures, continuesto make losses. The plan remains to return these businesses to profitabilityand to see them benefit from the Group's renewed focus on customer relationshipmanagement.In the first half of the year the Group had to face sustained higher inputcosts notably for stainless steel. The international sourcing strategies theGroup has in place have helped to mitigate these cost increases. We continue todrive towards the 12% return on sales target but progress to date has beenchallenging with higher input costs and energy prices likely to restrictprogress in the near term. Efficiency gains - epitomised by the successfulre-layout at Rangemaster and the wider use of robotics - and the continualreview of overheads helped to offset the margin impact. The Group isconsolidating a number of warehousing facilities in a new distribution centrein Leamington Spa. This will also incorporate the Group's head office andcustomer relationship management activities.
Financial position
Our exit from foodservice and capital return still left the Group with net cash- at this time in the economic cycle a clear strength. The work in the earlypart of the year to establish 4-year term banking lines with establishedrelationship banks was well timed.
The Group continues to monitor the position of the Pension Scheme. The agreement with the Trustee runs through to 2020 and was designed to provide stability for all parties. Our understanding of the cash flows underpinning the Scheme continues to increase. The Trustee and the Company remain aware of evolving initiatives in the insurance market that could be relevant to the Scheme to secure the positions of all parties further before 2020.
At 30th June 2008 on an IAS 19 basis the Group Schemes had a surplus of ‚£31.3million on liabilities of ‚£681.9 million - lower than the surplus of ‚£79.6million at 31st December 2007. The movement results primarily from the weakequity markets and the increase in inflation rate assumptions. The net cashcontribution to the Scheme in the first half was ‚£0.6 million and the incomestatement net pension credit was ‚£2.5 million.
Risks and uncertainties
These comments cover the principal changes to the risks and uncertaintiesfacing the Group, updating the comments made in the last annual report. In thatreport we set out a range of risks and uncertainties the Group faces andaddresses. Among those risks and uncertainties, we face changes in the overalleconomic environment, the impact of rising raw material and utility prices,levels of demand in consumer markets, our new product developments and PensionScheme funding.Product developmentThe Group's product range has long been held in high esteem for both look andfunctionality. With consumers particularly interested in household bills,healthy living and the quality of the environment, we are emphasising how wellour products meet these imperatives. For example, our cookers are recyclableand will operate for many years. Most Aga and Rayburn models - including thenew Aga gas models - are programmable, operating when needed. Agas have alwaysbeen multi-functional covering cooking and heating; they help to eliminate araft of secondary appliances and acquiring a modern Aga need not increasehousehold bills.In the medium term we share the view of the electricity generators that thefuture of renewables is linked to energy storage. In the domestic context thisshould mean heat storage appliances are needed of which our cast iron cookersare the epitome. So whether it is low cost, otherwise wasted overnightelectricity, or power from a micro generation source, Aga remains the heart ofthe home.Similarly, at Rangemaster we are at the forefront in bringing the latestefficient technology to widened markets. This is best seen in the newRangemaster induction electric models. Induction cooking is as flexible as gasand has safety advantages. We expect induction hobs on range cookers to gain asubstantial share of the market and we are at the forefront of bringing thetechnology, with which we are familiar from our commercial appliancebackground, to market through our leading brands in Falcon and now Rangemaster.
Strategy and outlook
The Board is pleased with the overall strategic position reached since itconcluded that it should sell foodservice when expansion opportunities for thebusinesses were not available. We have an outstanding and relevantproduct range for our consumer markets; firmly established routes to market;cost and efficiency programmes in place backed by a strong balance sheet andcash generative businesses.We recognise that consumer markets are likely to remain challenging - orderintake over the Summer has been down by around 5%. Headed into the typicallybusy Autumn season, we have products and marketing initiatives relevant tocurrent consumer priorities and believe that the strengths of our brands meanthat we will be well placed as the economic cycle evolves.J Coleman W B McGrathChairman Chief Executive29th August 2008 AGA RANGEMASTER GROUP PLC INTERIM RESULTS CONSOLIDATED INCOME STATEMENT Restated Half year Half year Year to to June to June December 2008 2007 2007
______________________________________
Note ‚£m ‚£m ‚£m Continuing operations Revenue 145.1 142.4 291.8Net operating costs (136.1) (132.1) (266.8)
________________________________________________________________________________________
Group operating profit 9.0 10.3 25.0Net pension credit 10 2.5 3.0 6.0Non-recurring cost 5 (2.6) - -
________________________________________________________________________________________
Profit before net finance costs and income tax 8.9 13.3
31.0Finance income 3.8 0.7 2.0Finance costs (0.4) (1.7) (5.4)
________________________________________________________________________________________
Profit before income tax 12.3 12.3
27.6
Income tax expense 6 (2.5) (2.4)
(4.2)
________________________________________________________________________________________
Profit for the period from continuing operations 9.8 9.9
23.4
________________________________________________________________________________________
Discontinued operation Post tax profit from discontinued operations - 7.4
40.1
________________________________________________________________________________________
Profit for the period 9.8 17.3
63.5
________________________________________________________________________________________
Profit attributable to equity shareholders 9.8 17.4
63.4
Profit attributable to minority interests - (0.1)
0.1
________________________________________________________________________________________
Profit for the period 9.8 17.3
63.5
________________________________________________________________________________________
Earnings per share - continuing operations 7 p p pBasic 9.5 8.0 19.4Diluted 9.5 7.9 19.2
________________________________________________________________________________________
Earnings per share - total operations 7 p p pBasic 9.5 13.9 52.7Diluted 9.5 13.8 52.2
________________________________________________________________________________________
p p
p
Dividend per share - proposed or paid 8 4.0 3.85
11.5
Return of cash / special dividend - paid 8 121.0 43.0
43.0
________________________________________________________________________________________
AGA RANGEMASTER GROUP PLC CONSOLIDATED BALANCE SHEET Half year Half year Year to to June to June December 2008 2007 2007
__________________________________________
Note ‚£m ‚£m ‚£m Non-current assets Goodwill 61.4 169.7 60.1Intangible assets 19.0 29.1 18.0Property, plant and equipment 9 51.0 84.6 51.7Investments in associates - 0.3 -Retirement benefit surplus 10 32.1 76.8 80.4Deferred tax assets 3.0 6.5 2.7
_________________________________________________________________________________________
166.5 367.0
212.9
_________________________________________________________________________________________
Current assets Inventories 58.9 105.4 54.9Trade and other receivables 39.9 106.3 46.4Current tax assets 1.5 7.2 1.5Cash and cash equivalents 11 36.0 42.6 181.5
_________________________________________________________________________________________
136.3 261.5
284.3
_________________________________________________________________________________________
Total assets 302.8 628.5
497.2
_________________________________________________________________________________________
Current liabilities Borrowings 11 (5.6) (3.7) (4.3)Trade and other payables (57.8) (117.0) (76.4)Current tax liabilities (11.3) (16.5) (8.7)Current provisions 12 (3.6) (5.7) (2.6)_________________________________________________________________________________________ (78.3)
(142.9) (92.0) _________________________________________________________________________________________ Net current assets
58.0 118.6
192.3
_________________________________________________________________________________________
Non-current liabilities Borrowings 11 (13.5) (118.6) (8.1)Other payables - (1.0) -Retirement benefit obligation 10 (0.8) (3.4) (0.8)Deferred tax liabilities (15.7) (33.1) (29.9)Provisions 12 (9.2) (8.6) (9.3)_________________________________________________________________________________________ (39.2)
(164.7) (48.1) _________________________________________________________________________________________ Total liabilities
(117.5)
(307.6) (140.1) _________________________________________________________________________________________ Net assets
185.3 320.9
357.1
_________________________________________________________________________________________
Shareholders' equity Share capital 13 32.4 32.4 32.4Share premium account 13 30.0 68.6 68.8Other reserves 13 79.0 28.3 37.1Retained earnings 41.8 189.7 216.7
_________________________________________________________________________________________
Shareholders' equity 183.2 319.0
355.0
Minority interest in equity 2.1 1.9
2.1
_________________________________________________________________________________________
Total equity 185.3 320.9
357.1
_________________________________________________________________________________________
AGA RANGEMASTER GROUP PLC CONSOLIDATED CASH FLOW STATEMENT Half year Half year Year to to June to June December 2008 2007 2007
_____________________________________
Note ‚£m ‚£m ‚£mCash flows from operating activities Cash generated from operations post pensions (0.1) 2.2 12.4items Finance income 3.8 0.9 1.8Finance costs (0.3) (1.4) (5.0)Tax payment (0.2)
(0.7) (4.9) _________________________________________________________________________________________ Net cash generated from operating activities
3.2 1.0
4.3
_________________________________________________________________________________________
Cash flows from investing activities Proceeds from sale of subsidiaries less costs (3.2) 1.8
259.8
Purchase of property, plant and equipment 9 (2.6) (7.0) (17.1) Expenditure on intangibles
(0.9) (1.3) (3.9)Proceeds from disposal of property, plant and - -
5.3
equipment
__________________________________________________________________________________________
Net cash (used in) / from investing activities (6.7) (6.5) 244.1 __________________________________________________________________________________________
Cash flows from financing activities
Return of cash and dividends paid to 8 (148.4) (64.7) (69.1) shareholders
Net proceeds from issue of ordinary share 0.2 0.9
1.1
capital Increase / (repayment) of borrowings 1.3 -
(43.4)
New bank loans raised 5.0 68.8
1.7
_________________________________________________________________________________________
Net cash (used in) / generated from financing (141.9) 5.0
(109.7)
activities
_________________________________________________________________________________________
Effects of exchange rate changes (0.1)
(0.1) (0.4) _________________________________________________________________________________________ Net (decrease) / increase in cash and cash
(145.5) (0.6) 138.3equivalents Cash and cash equivalents at beginning of period 181.5 43.2
43.2
_________________________________________________________________________________________
Cash and cash equivalents at end of period 36.0 42.6
181.5
_________________________________________________________________________________________
AGA RANGEMASTER GROUP PLC CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE Half year Half year Year to to June to June December 2008 2007 2007
____________________________________
‚£m ‚£m ‚£mProfit for the period 9.8 17.3
63.5
________________________________________________________________________________________
Exchange adjustments on net investments 3.0 (0.2) 3.1Actuarial (losses) / gains on defined benefit (50.9) 43.7
27.4
pension schemes
Deferred tax on items taken directly to reserves 14.2 (11.8) (10.8) ________________________________________________________________________________________ Income and expenses recognised directly in equity (33.7) 31.7
19.7
________________________________________________________________________________________
Transfers to income statement Movement on exchange as a result of disposals - -
5.5
________________________________________________________________________________________
Total recognised (expense) / income for period (23.9) 49.0
88.7
________________________________________________________________________________________
Attributable to: Equity shareholders (23.9) 49.1 88.6Minority interests -
(0.1) 0.1 ________________________________________________________________________________________ Total recognised (expense) / income for period
(23.9) 49.0
88.7
________________________________________________________________________________________
CONSOLIDATED CASH FLOW STATEMENT - RECONCILIATION Continuing Total Total Half year Half year Half year Year to to June to June to June December 2008 2007 2007 2007
_____________________________________________________
‚£m ‚£m ‚£m ‚£m Cash generated from operations
Profit before income tax - continuing operations 12.3 12.3
12.3 27.6Profit - discontinued operations - - 7.6 12.7Net finance (income) / costs (3.4) 1.0 0.8 3.0Share based payments expense 0.3 0.2 0.3 0.9Amortisation of intangible assets 0.7 0.5 1.0 2.2Depreciation 3.8 3.6 5.4 11.2
Profit on disposal of property, plant and equipment - (1.4)
(1.4) (1.3)Increase in inventories (3.3) (4.4) (11.3) (24.4)(Increase) / decrease in receivables 0.4 (0.2) (3.7) (9.7)(Decrease) / increase in payables (9.0) (8.9) (2.3) 17.1(Decrease) / increase in provisions 1.2 (0.7) (1.2) (0.3)Increase in pensions balances (3.1) (2.6) (4.3) (12.1)Pension scheme additional cash contributions - (1.0) (1.0) (14.5)
___________________________________________________________________________________________________________
Cash generated from operations post pension items (0.1) (1.6)
2.2 12.4
___________________________________________________________________________________________________________
AGA RANGEMASTER GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
On 9th May 2008 the Group changed its name from Aga Foodservice Group plc to Aga Rangemaster Group plc.
The interim condensed consolidated financial statements of the Group for thesix months ended 30th June 2008 were authorised for issue in accordance with aresolution of the directors on 28th August 2008.
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 described in note 5.
The interim condensed consolidated financial statements do not comprise theGroup's statutory accounts as defined by Section 240 of the Companies Act 1985(section 435 of the Companies Act 2006). Statutory accounts for the year ended31st December 2007 were approved by the Board of Directors on 14th March 2008and were delivered to the Registrar of Companies. The auditors' report on thoseaccounts was unqualified, it did not contain an emphasis of matter paragraphand did not contain any statement under section 237 of the Companies Act 1985(section 498 of the Companies Act 2006).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 2008 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 2007 which have been prepared in accordance with IFRSs asadopted by the European Union.
The 2007 income statement has been restated as the results of the Foodservice Equipment businesses have been reclassified as discontinued.
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 2007 except forthe adoption of new standards and interpretations, noted below.
IFRIC 11 IFRS 2 - Group and Treasury Share Transactions
This interpretation requires arrangements whereby an employee is granted rightsto an entity's equity instruments, to be accounted for as an equity-settledscheme, even if the entity buys the instruments from another party, or theshareholders provide the equity instruments needed. The adoption of thisInterpretation did not have any effect on the financial position or performanceof the Group.
IFRIC 14 IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
This Interpretation provides guidance on how to assess the limit on the amountof surplus in a defined benefit scheme that can be recognised as an asset underIAS 19 'Employee Benefits'. The adoption of this Interpretation did not haveany effect on the financial position or performance of the Group.
The Group has also early adopted the following Standards and Interpretations:
IFRS 2 Share-based Payment - Vesting Conditions and Cancellations
The Group has elected to adopt the amendment to IFRS 2 as of 1st January 2008.The Standard has been amended to clarify the definition of vesting conditionsand to prescribe the accounting treatment of an award that is effectivelycancelled because a vesting condition is not satisfied. The adoption of thisamendment did not have any impact on the financial position or performance ofthe Group. AGA RANGEMASTER GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. ACCOUNTING POLICIES (CONTINUED)
IFRS 8 Operating Segments
The Group has elected to adopt IFRS 8 as of 1st January 2008. This standardrequires disclosure of information about the Group's operating segments andreplaces the requirement to determine primary (business) and secondary(geographical) reporting segments of the Group. Adoption of this Standard didnot have any effect on the financial position or performance of the Group. TheGroup determined that the operating segment was the same as the businesssegment previously identified under IAS 14 'Segment Reporting'.
IAS 23 Borrowing Costs (Revised)
The Group has elected to adopt the revised IAS 23 as of 1st January 2008. Thestandard has been revised to require capitalisation of borrowing costs onqualifying assets and the Group has amended its accounting policy accordingly.In accordance with the transitional requirements of the Standard this has beenadopted as a prospective change. Therefore, borrowing costs have beencapitalised on qualifying assets with a commencement date on or after 1stJanuary 2008. No changes have been made for borrowing costs incurred prior tothis date that have been expensed. During the six months to 30th June 2008, noborrowing costs have been capitalised as construction of all qualifying assetscommenced prior to 1st January 2008.
IAS 32 Financial Instruments: Presentation and IAS 1 Puttable Financial Instruments and Obligations Arising on Liquidation
The Group has elected to adopt the amendments to IAS 32 and IAS 1 as of 1stJanuary 2008. The standards have been amended to allow a limited scopeexception for puttable financial instruments to be classified as equity if theyfulfill a number of specified criteria. The adoption of these amendments didnot have any impact on the financial position or performance of the Group.
4. SEASONALITY OF OPERATIONS
Due to the seasonal nature of the range cooker business, historical revenue patterns indicate that higher revenues and operating profits are usually expected in the second half of the year than in the first six months.
5. SEGMENTAL ANALYSIS
The directors consider that there is only one operating segment being the manufacture and sale of range cookers and related equipment. Therefore all disclosures required under IFRS 8 have already been given in these interim condensed consolidated financial statements.
The non-recurring costs relate to redundancy and reorganisation programmesacross the Group. AGA RANGEMASTER GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
6. TAXATION
Corporation tax for the interim period to 30th June 2008 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 2008 2007 2007
_________________________________________
‚£m ‚£m ‚£m Current tax UK corporation tax 2.8 0.5 1.8Overseas tax - 2.3 3.6
________________________________________________________________________________________
2.8 2.8 5.4 Deferred tax UK corporation tax (0.3) 1.2 2.6Overseas tax - - (1.7)
________________________________________________________________________________________
(0.3) 1.2
0.9
________________________________________________________________________________________
Total income tax expense 2.5 4.0
6.3
________________________________________________________________________________________
Continuing operations 2.5 2.4
4.2
Discontinued operations - 1.6
2.1
________________________________________________________________________________________
Total income tax expense 2.5 4.0
6.3
________________________________________________________________________________________
7. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is based on thefollowing data: Half year Half year Year to to June to June December 2008 2007 2007
_________________________________________
‚£m ‚£m ‚£mEarnings Profit after tax from continuing 9.8 9.9 23.4operations Minority interests - 0.1 (0.1)
________________________________________________________________________________________
Earnings - basic and diluted EPS 9.8 10.0
23.3
Profit from discontinued operations - 7.4
40.1
________________________________________________________________________________________
Profit attributable to equity 9.8 17.4
63.4
shareholders
________________________________________________________________________________________
Weighted average number of shares in million million millionissue For basic EPS calculation 102.8 125.6 120.3Dilutive effect of share options 0.8 0.9
1.1
________________________________________________________________________________________
For diluted EPS calculation 103.6 126.5
121.4
________________________________________________________________________________________
AGA RANGEMASTER GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7. EARNINGS PER SHARE (CONTINUED)
Half year Half year Year to to June to June December 2008 2007 2007
_________________________________________
Continuing operations p p pBasic 9.5 8.0 19.4Diluted 9.5 7.9 19.2
________________________________________________________________________________________
Discontinued operations p p pBasic - 5.9 33.3Diluted - 5.9 33.0
________________________________________________________________________________________
Total operations p p pBasic 9.5 13.9 52.7Diluted 9.5 13.8 52.2
________________________________________________________________________________________
8. DIVIDENDS Half year Half year to June to JuneAmounts recognised as distributions to equity 2008 2007shareholders in the period: _____________________________ ‚£m ‚£mFinal dividend of 7.65p for the year ended 31st December 8.7
9.1
2007 (2006: 7.0p) per share
________________________________________________________________________________________
Return of cash of ‚£1.21 (2007: 43.0p) per share 139.7
55.6
________________________________________________________________________________________
The directors are proposing an interim dividend in respect of the financial year ending 31st December 2008 of 4.0p per share (2007: 3.85p).
9. PROPERTY, PLANT & EQUIPMENT
During the six months to 30th June 2008 the continuing Group purchased ‚£2.6m (period to30th June 2007: ‚£3.2m) of property, plant and equipment and depreciation in the periodwas ‚£3.8m (period to 30th June 2007: ‚£3.6m).
10. RETIREMENT BENEFITS SURPLUS
Defined benefit scheme assets have been valued at a market value of ‚£713.2m(31st December 2007: ‚£776.9m) and the defined benefit liabilities at ‚£681.9m(31st December 2007: ‚£697.3m), giving a ‚£31.3m net surplus at the interim date(31st December 2007: ‚£79.6m). The liabilities have been rolled forward from31st December 2007 and adjusted to take account of the increase in bond yields,which have increased the discount rate from 5.8% to 6.6%. The net pensionscredit for the period was ‚£2.5m (period to 30th June 2007: ‚£3.0m). AGA RANGEMASTER GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 11. CASH & BORROWINGS CashAt 31st December 2007 the Group held ‚£181.5m of cash and cash equivalents. InMay 2008, ‚£139.7m was utilised as a return to shareholders and ‚£8.7m for thepayment of the final dividend. The remaining cash and cash equivalents balanceat 30th June 2008 was ‚£36.0m, this includes ‚£22.5m which is collateralisedagainst a bank guarantee facility, in respect of a guarantee given for thebenefit of the Aga Rangemaster Group Pension Scheme.Borrowings 30th June 30th June 31st December 2008 2007 2007
_______________________________________________
‚£m ‚£m ‚£mBank borrowings Current (unsecured) 5.6 3.7 4.3Non-current 13.5 118.6 8.1
_____________________________________________________________________________________
Total 19.1 122.3
12.4
_____________________________________________________________________________________
Current and non-current bank borrowings included nil obligations under financeleases at 30th June 2008 (30th June 2007: ‚£0.2m for current and non-current,31st December 2007: 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, with margins ranging between 0.375% and 0.6%.
At 30th June 2008 the non-current borrowings are split ‚£0.4m secured and ‚£13.1m unsecured.
12. PROVISIONS
During the period ‚£1.4m has been provided for in respect of the redundancy and reorganisation programme at Northland Marvel.
13. SHARE CAPITAL
During the period 118,557 ordinary shares (nominal value ‚£34,266) were issued in connection with the Company's share option schemes for an aggregate consideration of ‚£0.2m.
As part of the return of cash to shareholders, during the period, B and Cshares were issued for every existing ordinary share and subsequently redeemedand cancelled on completion of the return to shareholders. As a consequence ofthis ‚£39.0m was transferred from the share premium account to the capitalredemption reserve. The Company also undertook a share consolidation by whichfive existing ordinary shares with a nominal value of 28 1/8 pence wereexchanged for three new ordinary shares with a nominal value of 46 7/8 pence.The new ordinary shares carry the same rights as the old ordinary shares.
The number of shares in issue amounted to 69.2m on 30th June 2008 (31st December 2007: 115.2m).
14. SHARE BASED PAYMENTS
On 12th May 2008, 204,519 awards were granted to senior executives under theLTIP scheme. The LTIP consists of a right to acquire shares at a nominal priceof ‚£1 which will be exercisable after a period of three years at the earliest.The actual percentage of shares acquired depends on two performance criteria.The first of these is a comparison of the Company's total shareholder return(TSR) with the TSR of companies in a comparator group and the second is basedon the Group's earnings per share performance. The fair value of optionsgranted during the six months to 30th June 2008 was estimated on the date ofgrant using an expected life of 3 years and a grant price of 285.4p. AGA RANGEMASTER GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
15. FINANCIAL INSTRUMENTS
Included in borrowings at 30th June 2008 were loans of USD3.7m 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 2008, there was no gain or loss inrespect of the USD loan and the loss of ‚£0.4m on the retranslation of the Euroloan was transferred to equity to offset any gains and losses on translation ofthe net investments in subsidiaries.
16. CONTINGENT LIABILITIES & COMMITMENTS
The Group had no material contingent liabilities arising in the normal course of business at 30th June 2008.
The Group has arranged ‚£50.0m of bank guarantees for the benefit of the AgaRangemaster Group Pension Scheme of which ‚£22.5m is cash collateralised as mentionedin note 11.
The Group had capital commitments of ‚£nil at 30th June 2008 (31st December 2007: ‚£0.7m).
17. 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 2007: ‚£0.1m). The amount outstandingat 30th June 2008 was ‚£0.1m (30th June 2007: ‚£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 4.2.7 and DTR 4.2.8, 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 Aga FoodserviceGroup plc annual report for 31st December 2007, with the exception of thefollowing change in the period: John Coleman was appointed as Chairman when VicCocker CBE retired on 9th May 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 2008 which comprises the Consolidated Income Statement, ConsolidatedBalance Sheet, Consolidated Cash Flow Statement, Consolidated Statement ofRecognised Income and Expense, Consolidated Cash Flow Statement -Reconciliation and the related notes 1 to 17. We have read the otherinformation contained in the half yearly financial report and consideredwhether it contains any apparent misstatements or material inconsistencies withthe information in the condensed set 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 2008 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 AGA RANGEMASTER GROUP PLC MAIN ADDRESSES AND ADVISERS
Head Office and Registered Office
Aga Rangemaster Group plc4 Arleston WayShirleySolihullB90 4LHTelephone: 0121 711 6000Fax: 0121 711 6001e-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
Dresdner Kleinwort LimitedCitigroup Global Markets Limited 2008 Financial Calendar
Record date for interim ordinary dividend 7th November 2008 Interim ordinary dividend payable
3rd December 20082008 year end 31st December 2008
vendorRelated Shares:
AGA.L