13th Jan 2009 07:00
13th January 2009
FOR IMMEDIATE RELEASE
AGA RANGEMASTER GROUP PLC ("AGA") PRE-CLOSE TRADING UPDATE
In accordance with its regular practice Aga Rangemaster Group plc ("Aga") is issuing a trading update ahead of its preliminary results for the year ended 31st December 2008 which will be announced on 13th March 2009.
As reported in its interim management statement ("IMS"), released on 20th October 2008, having delivered a resilient performance in the first half of 2008 when operating profits were £9 million and profit before tax was £12.3 million on turnover of £145 million - trading conditions deteriorated. As indicated in the IMS, operating profits in the second half of 2008 were appreciably below those achieved in the first half of the year.
Markets slowed in the year, particularly in the second half. Our cast iron cooker lines saw the benefits of product development realised as customers traded up to larger, programmable models. There was a sharp shift to wood from oil for Rayburn and Stanley cookers and our heating stove operations grew rapidly. Rangemaster cooker sales in 2008 of approximately 68,000 units were down from 76,000 in 2007 as markets weakened and dealers destocked. However, Rangemaster continued to grow strongly on the Continent. In the US, Marvel the undercounter refrigeration operation, continued to face difficult trading conditions. Fired Earth and Divertimenti faced weak markets in the second half although December was up on the prior year.
We have already taken decisive action to cut costs to address volume decreases with factories operating for shorter time periods and discretionary expenditure being cut. Headcount is now 12% lower than at the start of 2008. Plans previously highlighted to save annual costs of over £6 million, including those announced with the interim results, have all been implemented.
The Group has maintained its strong financial position and this remains a priority for 2009. At 31st December 2008 having funded the Group's new Marvel factory in Richmond, Indiana, the Group had net cash in excess of £5 million. Lower capital expenditure, re-prioritised development programmes and reduced inventory levels are expected to further strengthen operating cash performance in 2009.
Our focus in 2009 will be to continue to make the most of the considerable investment the Group has already made in product development, routes to market and production efficiencies.
"We have acted decisively in response to the changing market conditions. Our sound finances, strong UK manufacturing and customer bases, together with export opportunities assisted by recent currency movements, all give us confidence that we will emerge from the current challenging trading environment with strengthened market positions.
Our business has origins in cooking and home heating that can be traced back over 300 years and which provide the perspective to see that quality and innovation succeed across economic cycles." William McGrath, Chief Executive.
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Enquiries:
William McGrath, Chief Executive, Aga Rangemaster Group plc - 01926 455731
Simon Sporborg/Charlotte Kenyon, Brunswick Group - 020 7404 5959
Note:
A presentation to be used in discussions with analysts today will be available to download at www.agarangemaster.com during the course of the day.
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