15th Jan 2007 07:06
15th January 2007FOR IMMEDIATE RELEASE AGA FOODSERVICE GROUP PLC - PRE-CLOSE TRADING UPDATE
In line with market practice, Aga Foodservice Group ("the Group"), which sells premium cookers and refrigerators into the domestic and commercial markets, is issuing its regular pre-close trading update, ahead of its preliminary results for the year ended 31st December 2006 which will be announced on 16th March 2007.
Overview
The good progress in sales and profits achieved by the Group over recent years continued during 2006. Both core consumer and foodservice operations performed well, driven by strong product development programmes. Above trend order intake in the final quarter suggests momentum can be maintained into the New Year. Overall operating profit is expected to be no less than ‚£46.5 million, up from ‚£41.7m in 2005, before a loss at Domain of c‚£2.8m and the exceptional cost of the proposed combination with Enodis of ‚£1 million. While the outlook for Domain for 2007 is better, the Group assisted by Ernst & Young Orenda is considering with local management a number of strategic options for the Domain business.
Consumer
Aga continues to perform well with order intake up 5% in 2006. In addition, Waterford Stanley in Ireland had a strong year. Our Rangemaster operation had an excellent second half and total orders in the year were ahead of last year by 10%. Marvel, the US refrigeration operation, also performed well with order intake rising by around 20%.
The good close to 2006 reflects the success of recent product introductions like the electric Aga and we expect this trend to continue in 2007. There is growing interest among existing Aga and Rayburn owners in trading up to modern models and this is an area of particular focus. Exports continue to increase and are, for example, now 18% of Rangemaster's business, up from 13% in the prior year with Ireland and France strong.
Foodservice
Foodservice and bakery operations continue to perform well. European activities were helped by the breadth of our customer base. In the year, we saw good sales to key UK accounts such as the prison service, Ascot and other major stadia projects. New central European markets for our bakery products also contributed well. In the USA our Bakery operations were strong in doughnut-making equipment and rebounded in other bakery sub-sectors in the second half. Refrigeration operations improved. The acquisitions made in 2006; Eloma, the German based combi oven maker and Amana, the US based commercial microwave company, have both performed well and are quickly becoming key drivers of growth given their acknowledged product quality.
Financial and Strategic Position
We continue to accelerate the incremental growth of the business, through new product developments, bolt on acquisitions and entry into new growth markets. We have an outstanding portfolio of products available for both the premium consumer and commercial kitchen and we will continue to concentrate on these areas. The Group had net debt at the year end for the first time for some years and continues to move towards, as previously stated, an appropriate debt/ equity structure.
An update on the Group's strategic plans will be made as part of the preliminary results announcement in March.
"We made good progress in 2006 in spite of the challenges posed by the US retail operations. Our mission is to equip the world's best kitchens and we have the product ranges and distribution in place to achieve it. 2007 is shaping up well.": William McGrath, Chief Executive.
[-ENDS-]Enquiries:
William McGrath, Chief Executive, Aga Foodservice Group plc - 0121 711 6015
Simon Sporborg/Nina Coad, Brunswick Group - 020 7404 5959
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