2011 Full Year Results

Date : 03/09/2012 @ 2:00AM
Source : UK Regulatory (RNS & others)
Stock : Aga Rangemaster (AGA)
Quote : 184.5  0.0 (0.00%) @ 1:37AM
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2011 Full Year Results

AGA Rangemaster (LSE:AGA)
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RNS Number : 0200Z

Aga Rangemaster Group PLC

09 March 2012

9(th) March 2012





 Year to 31(st) December                      2011     2010 
                                              GBPm     GBPm 
 Continuing operations 
 Revenue                                     250.9    259.1 
 EBITDA (before non-recurring costs 
  & curtailment gain)                         16.5     13.5 
 Operating profit before amortisation          8.0      6.9 
 Operating profit                              6.1      5.1 
 Profit before tax (excluding curtailment 
  gain)                                        7.5      3.6 
 Profit after tax                             12.9    14.1* 
 Basic earnings per share                    18.8p   20.5p* 
 Underlying earnings per share                7.1p     5.2p 
 Total equity                                167.7   162.3* 
 Total dividend                               1.9p     1.7p 
 Net cash                                     31.3     34.6 

*Restated for deferred tax - see note 5

Strategic and operational highlights

   --         Profit growth achieved through margin improvements. 
   --         AGA Total Control is selling well and is attracting a new generation of customers. 
   --         Rangemaster showed impressive resilience in a tough market. 
   --         Losses reduced at Fired Earth and Grange and progress is set to continue. 

-- Accounts show a GBP5.3 million net surplus in the Group's pension schemes which is little changed from 2010 - discussions are progressing well with the trustee of the main pension scheme regarding the scheme's 2011 actuarial valuation and its funding arrangements from 2012.

-- The year was expected to start slowly given last year's trend lines. More encouraging order intake combined with implementation of the next phase in efficiency gains is setting a more positive tone.

William McGrath, Chief Executive commented: "The focus for 2011 was on maintaining our strong balance sheet and growing profit. The successful launch of the AGA Total Control ensures its continued relevance as a product at the heart of the home and gives us renewed confidence that we are on course to achieve our long-term performance objectives, even if current market conditions remain exacting."


 William McGrath, Chief Executive     020 7404 5959 (today) 
  Shaun Smith, Finance Director        01926 455 731 (thereafter) 
  Simon Sporborg / Charlotte Kenyon    020 7404 5959 



We set out to make 2011 a year of clear cut progress - something we achieved even though consumer caution increased towards the end of the year. The product introductions and strengthened business processes enabled us to improve margins and provide a continuing optimism that the groundwork is in place to restore profits to levels achieved prior to the economic downturn.

Particular features of the year were:

- The rise in operating profits before amortisation to GBP8.0 million (2010: GBP6.9 million) and GBP6.1 million (2010: GBP5.1 million) after amortisation. These increases were achieved even though revenue decreased to GBP250.9 million from GBP259.1 million in 2010.

- We finished the year with a strong net cash position of GBP31.3 million (2010: GBP34.6 million) and our working capital ratios remain very good.

- The strong product introduction programmes led by the product redefining AGA Total Control have opened up new opportunities in the UK and, importantly, in Europe and in North America where our long-term brand building can now pay off. We can also see that we have the product mix to make greater impressions in other international markets.

- We continue to drive efficiencies and are examining the further development possibilities arising from investments already made in products and systems - seen in AGA Total Control being a factory assembled product which simplifies distribution, installation and service considerations. All our modern electric products will be factory built by the end of 2012.

Our pension schemes remain a major responsibility. The accounts show that the schemes had a net surplus at 31(st) December 2011 of GBP5.3 million on an accounting basis, compared with a surplus of GBP7.1 million a year ago. In 2011, the net pension credit totalled GBP3.1 million. With the significant fall in gilt yields during the year, the actuarial valuation of the Group's main pension scheme as at 31(st) December 2011 which is under way will show an increase in the deficit on an actuarial basis over the deficit of GBP62 million that was indicated as at 31(st) December 2010 by the actuarial update report prepared on a rolled forward basis at that date. We are in discussions with the trustee of this scheme to ensure that the reasonable funding requirements of the scheme are met while also ensuring the strategy of the Group continues to be focused on our long-term development objectives.

The slow end to 2011 made us cautious about the start to 2012 but the benefits of the work of recent years is showing through and we retain our belief that 2012 will bring renewed momentum. The combination of product mix, geographical reach and operational gearing can rapidly work to our advantage when confidence levels start to recover.

Strategic progress

Given the market in which we operate and the constraint of the pension scheme, our plans in recent years have been directed to efficiency gains and incremental expansionary steps. Our business model is based on being a major international force in range cookers giving us access into wider kitchen markets. We have tightly drawn key performance indicators for our key brands against which we assess progress made.

Our cast iron cookers are our most operationally geared lines. We have sought to broaden their appeal through providing additional flexibility in use, seen in the successful launch in May 2011 of the AGA Total Control - "on when you need it off when you don't". Orders are now 1,100. For Rayburn and Stanley, development has meant making our all in one heating-cooker products part of the drive for whole house energy management solutions linking renewables and fossil fuels.

In 2011 overall cast iron cooker volumes fell 6% to 11,000 with the decline of Stanley in Ireland continuing - but with AGA volumes flat. Given the products we have and will continue to introduce we retain our objective of restoring cast iron cooker sales to 19,600 - the level of 2007 - prior to the fall in the Irish, and then our UK markets. We know that with the lower cost structures now in place that material profit improvement should follow.

At Rangemaster we continued with our established, successful development plans. While volumes were around 62,000 units - below the 2007 benchmark of 76,000 units - we once again succeeded through the mix of brands and higher specification models to edge up average selling prices. We still do not expect material volume changes in the UK, given the housing and consumer markets, which makes international sales - contributing over a quarter of Rangemaster sales volumes - so significant. In 2011 we moved ahead slightly with good growth coming from France. The key challenge is to add materially to export sales markets with higher real growth rates and for which we now have products that will be more readily accepted.

Profit growth can also come from the improving performance in operations that have performed weakly in recent years. In 2011 we entered into an agreement with the newly strengthened Fired Earth management under which it has an equity interest in the operation. In 2011 Fired Earth saw losses fall significantly but they remained over GBP1 million. For Grange there has been a concerted effort to make the product line up more contemporary and to make purchasing Grange products simpler and more exciting - hence our investment in the technology underpinning the store design software for "My Grange".

In 2012 a priority is to make material progress in rebalancing the business so that at least half the revenue is generated from outside the UK compared with 37% in 2011.

2012: Manufacturing and design in Britain

2012 will be a high profile year for Britain and British made products. The Group's history begins with its cooking pots triggering the Industrial Revolution in 1709 through the smelting of iron ore with coke. The Group has made major contributions to British manufacturing. It received, for example, two medals at the 1851 Great Exhibition. This makes 2012 with its focus on Britain and its heritage particularly interesting as we still make innovative products fulfilling the same functions today. We expect to play a prominent role in highlighting Britain as an innovator and manufacturer and to take opportunities to showcase our brands. We were delighted to be named Midland Manufacturer of the year for 2011. We were founder members of IDEA Birmingham, which will hold an expo this summer on innovation and design in the Midlands.

Current trading

We went into 2012 expecting markets to remain tough and we have already undertaken further steps to improve efficiencies and lower the cost base, building on programmes of the last four years. We now have a single set of focused business processes across the UK manufacturing units. We are also, as more of our cast iron cookers are fully assembled in the factory, working with a simpler sales process and a single warehouse for all our cookers in Leamington Spa.

We are pleased that our January sales programmes went well and consumer leads are up. We have well defined target markets in the UK and overseas and expect this targeting to bring sales growth this year. For Rangemaster at the biannual Kitchen Bedroom Bathroom trade show at the NEC, our dealers felt our product mix based on market leading ranges with a wider appliance and sink offering provides a strong platform for the year. We are encouraged that AGA Marvel in North America should see appreciable progress and trend lines at Fired Earth are better.

Against this background we retain our confidence in our business model and a belief it will generate the expected returns given the tremendous affection and respect that our brands attract. Our determination through the downturn to build product and distribution to make us the beneficiary in a recovery could pay off this year - a year we approach with confidence.


Group revenues decreased by 3.2% to GBP250.9 million from the GBP259.1 million reported in 2010. Second half revenues of GBP129.5 million were down 4.5%, compared with the first half when revenues were GBP121.4 million, down 1.6% on the GBP123.4 million reported in the first half of 2010. Of total revenues 37% were outside the UK (2010: 37%).

Operating profit

The operating profit for the year was GBP6.1 million, up from the operating profit of GBP5.1 million reported in 2010. The second half profit of GBP3.2 million followed on from a first half profit of GBP2.9 million as the Group benefitted more fully from the operational efficiencies implemented in 2008 to 2010.

Non-recurring costs

Non-recurring costs in the year totalled GBP2.1 million (2010: GBP1.4 million). These relate to the final phase of the reorganisation of our AGA Marvel US and Canadian manufacturing and distribution operations. In addition, new opportunities to lower operational costs arose later in the year from the introduction of new systems and new products. Assets held for sale have been reassessed and impaired by GBP0.9 million as we look to accelerate their disposal.

Finance income

Net finance income for the year was GBP0.4 million (2010: GBP0.2 million finance costs). This included interest received on the tax deposits made in relation to taxation returns now agreed. During the year the average interest rate on cash deposits was 0.3% and over 1% on borrowings, which was primarily the cost of currency loans held for hedging purposes.

Profit before tax

Profit before tax in the year was GBP7.5 million (2010: GBP3.6 million excluding a pension curtailment gain of GBP16.3 million).


The Group had a tax credit of GBP5.4 million (2010 restated: GBP5.8 million charge) on profits before tax of GBP7.5 million. The tax credit includes a GBP6.1 million credit being the release of provisions made for tax in respect of prior year tax returns now agreed and a tax charge of GBP0.7 million, primarily deferred tax.

Moving forward the Group expects the tax rate to be slightly above the UK standard rate of 25% from 1(st) April 2012 although the impact of any pensions deficit contributions can significantly reduce the cash tax payable.

Earnings per share

Basic earnings per share on continuing operations were 18.8 pence (2010 restated: 20.5 pence) based on an average number of shares in issue of 69.3 million (2010: 69.2 million). Adjusted underlying earnings per share (excluding pension credits and non-recurring costs based on a standard UK tax rate) were 7.1 pence (2010: 5.2 pence).


The board is proposing a final dividend of 1.1 pence (2010: 1.0 pence) per share making the full year dividend 1.9 pence (2010: 1.7 pence) per share. The cash cost of the total dividend for the full year will be GBP1.3 million (2010: GBP1.2 million). The final dividend will be paid on 1st June 2012, subject to shareholder approval.

Discontinued operations

The post tax profit from discontinued operations of GBP2.7 million includes a tax credit following the agreement on prior year tax returns of GBP5.7 million and a charge of GBP3.0 million. During the year payments were made under certain indemnities provided under the disposal agreement for the Foodservice operation and adjustments made to its continuing provision levels. Since the year end a German appeal court has provided a judgement on the value of the minority interest in a company acquired by the Group in 1998. The value is significantly above that paid by the Group for the majority of the shares. The judgement will cost the Group GBP7 million - for which provision has been made.

Cash flow

The Group has continued with its disciplined approach to cash management. Cash flow generated from operating activities of GBP0.1 million in the year followed on from the GBP15.7 million generated in 2010 and resulted from a determined effort to manage working capital in the face of difficult economic conditions.

The net outflow from working capital in the year was GBP5.5 million (2010: GBP8.7 million inflow) following the GBP31.6 million generated from working capital in the two years to 31(st) December 2010.

Capital expenditure including intangibles in the year totalled GBP8.4 million compared to GBP5.7 million in 2010. The charge for depreciation and amortisation of intangibles in 2011 was GBP7.3 million (2010: GBP8.3 million).

GBP7.5 million was received during the year from the disposal of assets held for sale relating to the freehold of certain properties sold in January. The resulting net cash position at 31(st) December 2011 was GBP31.3 million (2010: GBP34.6 million).

Pension funding

The surplus in the Group's main pension scheme at the end of 2011 included in the financial statements was GBP6.8 million on an accounting basis compared with a surplus of GBP8.6 million a year earlier. The negligible change over the year reflects the strong correlation of liabilities with assets held, corporate bonds being the largest asset class held.

At 31(st) December 2008, the effective date of the scheme's last actuarial valuation, the deficit was appraised at GBP161 million on an actuarial basis and a recovery plan had required payments from 2012 of GBP10 million per annum. The Actuarial Report as at 31(st) December 2010 indicated a deficit on a rolled forward basis at that date of GBP62 million. With gilt yields falling sharply in the second half of 2011 the actuarial deficit is likely to have increased significantly in the year to 31(st) December 2011.

The actuarial valuation of the scheme as at 31(st) December 2011 is in the course of preparation. This valuation is being undertaken within the overall structure of the long-term funding agreement made by the Company and the trustee of the scheme in 2008 which targets making the scheme fully funded on a self-sufficiency basis by 31(st) December 2020. The Company continues to provide GBP50 million of guarantees in support of the Group's potential obligation to the scheme in 2020 under the agreement. Using preliminary data already available for the 2011 valuation, the parties are now working to modify existing arrangements and agree a medium-term funding strategy which ensures that there is a clear, stable framework for both the scheme and the Group, taking account of the interests of the members of the scheme and other stakeholders in the Group.


Our business model

AGA Rangemaster sets out to be an international leader in range cooking and to have a wider range of appliance and kitchen products to reinforce the attractions of having a range cooker at the heart of the home. We have great, long established brands like AGA and La Cornue and younger ones like Rangemaster that develop our traditions. We have an embedded dealer structure and for more specialist lines we add some owned retail outlets. We also have in place some international structures with local production capabilities most notably with AGA Marvel in North America to complement our UK strengths. We believe that modern marketing techniques assist in the identification of niche customer bases and will help drive the volume growth and margin benefits from the sustained investment and commitments to manufacturing of our anchor products.

The product mix

Cast Iron Cookers

The AGA - at the centrepiece of our cast iron cooker offering - is the product for which the Group is best known. Cooking using radiant heat from the walls of an oven provides the key differentiating feature - the food tastes better. The design and the way the warmth from the cooker creates an atmosphere in the home sets the cast iron cooker apart - making it iconic. Over the last seven years there have been major product development programmes. A key factor is the greater use of electricity - bringing flexibility in use and simplifying the production and distribution processes.

AGA is sold in the UK through 70 AGA shops, of which over half are directly owned. Overseas sales are largely dealer led. The new simplified range now requires less technical support in the field and makes the belief of the sales person in the virtues of cast iron cooking central to the sales process. AGA has a unifying theme of "I love my AGA" and seeks to attract specific audiences including a younger urban audience as well as rural and farming communities. Farmers' markets, food festivals and point-to-point meetings provide events where targeted customers are to be found.

Other range cookers

Rangemaster has rapidly become a market leading brand because of its outstanding product quality - for example, Which? magazine concluded in 2011 that Rangemaster made the six best range cookers on the market. The Group created the range cooker market segment in the mid 1990's and has maintained the lead by bringing quality, price and functionality together. Ceramic hobs, then induction hobs have shown that Rangemaster makes premium technology in an accessible product. Rangemaster has evolved from the country range in British racing green to making products under well differentiated styles for contemporary kitchens with black and stainless steel dominant looks and more recently adding French and Italian styles. We have specialised premium lines under the Falcon and Mercury brands with commercial and design statement looks. A core competence to help provide the widest product offering is the highly flexible manufacturing capability of our Leamington Spa factory - supplemented by our Nottingham sink specialist factory.

Rangemaster is sold through dealers in the UK and overseas. Rangemaster's aim is to be "easy to do business with" from a dealer standpoint. This involves ease of ordering, delivery and service as well as offering well defined packages of appliances. Growth for the Rangemaster brand has been supported by adding splash backs, cooker hoods, refrigeration and most recently sinks to its consumer offering using the capability of being the only UK sink producer. Our Leisure brand is the UK's largest trade sink brand.

Rangemaster's main marketing theme is "life revolves around a Rangemaster" and an online onus is now on the process of upgrading kitchens to have the range at the heart of the home.

Other appliances

Through Marvel, the Group is a major specialist in undercounter refrigerators in North America. We make wine fridges, ice makers, beverage centres and multi functional refrigerators now largely using the latest forced air technology. Operating from our new factory and distribution centre in Greenville, Michigan, Marvel sells through distributors to dealers in most of the USA - we act as our own distributor in Canada through our national sales force. We have restructured our product offering into Marvel and the premium Marvel Professional and we have specialist areas highlighting our refrigeration expertise in Marvel Outdoor and Marvel Scientific.

The Group also sources appliances - adapting them to its own styling to provide a comprehensive offering. Over the last seven years the Group has worked with Haier - the China based business that is the world's largest appliance group - in developing refrigerators adapted to western requirements. Haier now also makes a Rangemaster specified dishwasher.

Other products

Grange brings to the Group a large well established distribution structure - having Grange dealer outlets worldwide and owned retail outlets. The best product links between Grange premium furniture lines and the appliances are through the kitchen. Grange Cuisine is designed by Charlie Smallbone and sold by Fired Earth in the UK whilst the "My Grange" concept is a powerful online tool for the design community with the ability to link with communities attracted by the Group's core appliance offering. Grange differentiates itself through its flexible manufacturing with the specialism in colour and finishing techniques.

Fired Earth has for 25 years been at the forefront in the style and use of tiles in the UK as well as in the quality paint market. The expansion into bathrooms and kitchens provides a distinctive take on contemporary taste - accessing ideas from around the world. The current interpretations of Turkish and North African styles in tiles typifies this positioning. The idea is to establish links between the customer bases of Fired Earth and the appliance operations. We see online sales as a significant source of business - an area showing rapid current growth.

Strong value from the market positions we hold

The AGA Rangemaster business model is based on the Group's brand strengths emanating from product quality provided by its long manufacturing tradition. The Group has deep roots in British style - to which it has added comparable French style - and it is looking to interpret these styles for international markets. The distinctive nature of our range cookers, the affection in which they are held, and the wide contemporary sense added through determined consistent investment in new products provides the strength to turn niche positions into operations of scale, able to add substantially to value for shareholders.

Progress in 2011

The Group has continued with a rigorous and disciplined approach to cost and cash management. The result is both improved profitability and net cash of GBP31.3 million at the end of 2011.

Our markets remained quiet in 2011 and were more difficult towards the end of the year. We do note that the number of mortgage approvals - the precursor for housing transactions - have been edging back up although still under 50% of the peak suggesting there is a sound floor to the market - but little market momentum. Against that background, new products for the UK and overseas to aid the drive into new international markets have to be central to our thinking.

The significance of the launch of the AGA Total Control to the Group continues to increase. The product was the culmination of four years of development work and analysis to reposition the product. Launched last May at the Saatchi Gallery it was quickly recognised as a major new development with its touch screen controls making it "work for you". The AGA Total Control design and production programmes have led to the conclusion that we should alter our processes so that all our electric AGA products are assembled in the factory. This starts to make the overall purchase process and installation for the AGA far simpler, quicker and cheaper for dealers and consumers alike. The transport cost of a single pallet for a factory finished product is lower. This is of particular importance in international markets where familiarity with the installation and maintenance technicalities of the AGA are lower. For many, for example, a home survey is now unnecessary prior to installation.

For our own sales teams and for dealers there can now be a greater onus on explaining the AGA as the best cooker in the world because of its use of radiant heat ovens producing food that tastes better, the warmth for the home and the classic look which works with all kitchen styles. We are also now seeking more people to use AGA commercially in catering, restaurants and bed and breakfasts in order to see selling AGA on a commission sales basis widening the accessibility of AGA. This is bringing change to our retail and distribution teams reducing the cost of doing business. We have, we believe, the best opportunity ever to make AGA a force overseas. AGA continues to attract a great range of customers. Mary Berry - long the doyenne of AGA cooks - is now renowned for her role in the 'Great British Bake Off'. Models Jasmine Guinness and Daisy Lowe are both AGA enthusiasts, as is the leading French film star Gerard Depardieu.

With Rayburn and Stanley we have rationalised the product offering now that we have acquired Redfyre - which provided an electric line for Rayburn. We are yet to see the progress we want with the multi fuel approach to energy in the home incorporating our innovative eco connect solution and are working harder with installers and our own service team to emphasise the case for the cooker boiler.

For Rangemaster the objective remains to be the supplier of choice for dealers because of our ease to do business with because of our systems and UK supply capabilities. In addition we continue to add to our product offering with new lines - a stainless steel Italian style range is now out - and product range expansion continues as with our sink offer.

Exports accounted for over 25% of sales volumes. France is the leading market but North America remains the market where we should most immediately win new business where the potential for quality stylish range cookers can be made attractive in a growing market used to range cooking.

In North America we have reorganised our offers delivered by AGA Marvel. We are pleased that month by month since the half year we have been operating profitably and the prospects for 2012 are more encouraging as we seek major new retail chains as customers and expand our meaningful geographical presence westwards.

We believe the business can be better balanced with increased sales overseas and as such we believe growing international sales above 50% of the total remains an appropriate target.

Fired Earth with its determined management team made good progress in 2011 in improving margins and lowering the cost base. In 2012 we expect all four product areas to see upturns based on the work on mix and positioning already undertaken. With order intake ahead year to date and the level of design quotations well ahead the outlook is better as we look to a valuation point in 2013. Restoring Fired Earth and Grange to profitability is a key driver of profit growth. For Grange we look to the introduction of the online tool "My Grange" to provide a step change that gives the sales momentum to help deliver the benefits of the work we have done on manufacturing, product finishes and contemporisation of the product offering.

The sale of Foodservice in December 2007 was timely in generating returns for shareholders but it did leave the Group heavily committed to higher ticket consumer markets during a sustained downturn. Our response has been to raise efficiencies and to protect the core capabilities of the Group while investing in new product with an EBIT margin of 10% remaining the objective. We believe that the work is paying off with the product positioning, style and functionality attuned to the consumer needs of today. So, while we do not expect market conditions to improve, we do see that we can shape our strong UK based brands for global success.


 Year to 31(st) December                                        Restated* 
                                                         2011        2010 
                                                         GBPm        GBPm 
 Continuing operations 
 Revenue                                                250.9       259.1 
 Net operating costs                                  (244.8)     (254.0) 
 Group operating profit                                   6.1         5.1 
 Net pension credit                                       3.1        16.4 
 Non-recurring costs                                    (2.1)       (1.4) 
 Profit before finance income / (costs) and tax           7.1        20.1 
 Finance income                                           1.0         0.2 
 Finance costs                                          (0.6)       (0.4) 
 Profit before tax                                        7.5        19.9 
 Tax credit / (expense)                                   5.4       (5.8) 
 Profit for the year from continuing operations          12.9        14.1 
 Discontinued operations 
 Profit for the year from discontinued operations         2.7           - 
---------------------------------------------------  --------  ---------- 
 Profit for the year                                     15.6        14.1 
 Profit attributable to: 
 Equity holders of the parent                            15.7        14.2 
 Non-controlling interests                              (0.1)       (0.1) 
 Profit for the year                                     15.6        14.1 
 Earnings per share attributable to equity holders 
  of the parent                                             p           p 
  - continuing operations 
 Basic                                                   18.8        20.5 
 Diluted                                                 18.8        20.5 
 Earnings per share attributable to equity holders 
  of the parent                                             p           p 
  - total operations 
 Basic                                                   22.7        20.5 
 Diluted                                                 22.7        20.5 

*Restated for deferred tax - see note 5


 Year to 31(st) December                              2011        2010 
                                                      GBPm        GBPm 
 Profit for the year                                  15.6        14.1 
 Exchange differences on translation of foreign 
  operations                                         (0.8)       (1.1) 
 Actuarial (losses) / gains on defined benefit 
  pension schemes                                   (10.5)        26.6 
 Deferred tax on defined benefit pension schemes       2.3       (7.2) 
 Other comprehensive (losses) / income for the 
  year                                               (9.0)        18.3 
 Total comprehensive income for the year               6.6        32.4 
 Attributable to: 
 Equity holders of parent                              6.8        32.5 
 Non-controlling interests                           (0.2)       (0.1) 
 Total comprehensive income for the year               6.6        32.4 

*Restated for deferred tax - see note 5


 As at 31(st) December                                     Restated* 
                                                    2011        2010 
                                                    GBPm        GBPm 
 Non-current assets 
 Goodwill                                           66.7        66.7 
 Intangible assets                                  23.9        22.9 
 Property, plant and equipment                      40.8        40.8 
 Retirement benefit surplus                          6.8         8.6 
 Other receivables                                   0.7         0.8 
 Deferred tax assets                                 4.1         8.7 
                                                   143.0       148.5 
 Current assets 
 Inventories                                        45.5        42.8 
 Trade and other receivables                        30.8        29.8 
 Current tax assets                                  1.0         1.8 
 Cash and cash equivalents                          48.1        51.7 
                                                   125.4       126.1 
----------------------------------------------  --------  ---------- 
 Assets held for sale                                2.6        10.2 
 Total assets                                      271.0       284.8 
 Current liabilities 
 Borrowings                                        (1.4)       (1.7) 
 Trade and other payables                         (65.4)      (67.5) 
 Current tax liabilities                           (2.9)      (20.4) 
 Provisions                                       (10.2)       (2.1) 
                                                  (79.9)      (91.7) 
 Net current assets                                 45.5        34.4 
 Non-current liabilities 
 Borrowings                                       (15.4)      (15.4) 
 Retirement benefit obligation                     (1.5)       (1.5) 
 Deferred tax liabilities                          (5.0)       (5.7) 
 Provisions                                        (1.5)       (8.2) 
                                                  (23.4)      (30.8) 
 Total liabilities                               (103.3)     (122.5) 
 Net assets                                        167.7       162.3 
 Share capital                                      32.5        32.5 
 Share premium account                              29.6        29.6 
 Other reserves                                     84.0        84.7 
 Retained earnings                                  21.4        15.1 
 Equity attributable to equity holders of the 
  parent                                           167.5       161.9 
 Non-controlling interest                            0.2         0.4 
 Total equity                                      167.7       162.3 

*Restated for deferred tax - see note 5


 Year to 31(st) December                                    2011     2010 
                                                            GBPm     GBPm 
 Operating activities 
 Profit / (loss) before tax: 
 Continuing operations                                       7.5     19.9 
 Discontinued operations                                   (3.0)        - 
 Reconciliation of profit before tax to net cash 
 Net finance (income) / costs                              (0.4)      0.2 
 Depreciation of property, plant and equipment               5.4      6.5 
 Impairment of assets held for sale                          0.9        - 
 Amortisation of intangible assets                           1.9      1.8 
 (Profit) / loss on disposal of property, plant 
  and equipment, intangibles and assets held for 
  sale                                                     (0.6)      0.1 
 Share based payments expense                                  -      0.1 
 (Increase) / decrease in inventories                      (2.8)      3.1 
 (Increase) / decrease in receivables                      (0.8)      0.8 
 (Decrease) / increase in payables                         (1.9)      4.8 
 Increase / (decrease) in provisions                         2.6    (0.4) 
 Movement in pensions                                      (8.7)   (21.2) 
 Cash generated from operating activities                    0.1     15.7 
 Cashflows related to discontinued operations              (1.2)    (0.4) 
 Finance income                                              0.7      0.2 
 Finance costs                                             (0.6)    (0.4) 
 Tax receipt / (payment)                                     0.6    (2.3) 
 Net cash flows (used in) / from operating activities      (0.4)     12.8 
 Investing activities 
 Acquisition of business                                   (0.7)        - 
 Purchase of property, plant and equipment                 (5.5)    (3.7) 
 Expenditure on intangibles                                (2.9)    (2.0) 
 Proceeds from disposal of property, plant and 
  equipment                                                    -      0.1 
 Proceeds from disposal of assets held for sale              7.5        - 
 Net cash used in investing activities                     (1.6)    (5.6) 
 Financing activities 
 Dividends paid                                            (1.2)    (0.5) 
 Repayment of borrowings                                   (0.3)    (0.2) 
 New bank loans raised                                         -      0.3 
 Net cash used in financing activities                     (1.5)    (0.4) 
 Effects of exchange rate changes                          (0.1)    (0.1) 
 Net (decrease) / increase in cash and cash equivalents    (3.6)      6.7 
 Cash and cash equivalents at beginning of year             51.7     45.0 
 Cash and cash equivalents at end of year                   48.1     51.7 


                                         Equity attributable to equity holders 
                                                      of the parent 
                                                                                                 Non - 
                                    Share      Share       Other    Retained               controlling     Total 
                                  capital    premium    reserves    earnings      Total      interests    equity 
                                     GBPm       GBPm        GBPm        GBPm       GBPm           GBPm      GBPm 
 At 1(st) January 2010 
  - Restated*                        32.5       29.6        85.8      (18.1)      129.8            0.5     130.3 
 Comprehensive income 
 Profit / (loss) for 
  the year                              -          -           -        14.2       14.2          (0.1)      14.1 
 Other comprehensive 
  income / (losses): 
 Exchange differences 
  on translation of foreign 
  operations                            -          -       (1.1)           -      (1.1)              -     (1.1) 
 Actuarial gains on defined 
  benefit pension schemes               -          -           -        26.6       26.6              -      26.6 
 Deferred tax on actuarial 
  gains                                 -          -           -       (7.2)      (7.2)              -     (7.2) 
 Total comprehensive 
  income / (losses) for 
  the year to 
  31(st) December 2010                  -          -       (1.1)        33.6       32.5          (0.1)      32.4 
 Dividends paid                         -          -           -       (0.5)      (0.5)              -     (0.5) 
 Share based payments                   -          -           -         0.1        0.1              -       0.1 
------------------------------  ---------  ---------  ----------  ----------  ---------  -------------  -------- 
 At 1(st) January 2011               32.5       29.6        84.7        15.1      161.9            0.4     162.3 
 Comprehensive income 
 Profit / (loss) for the 
  year                                  -          -           -        15.7       15.7          (0.1)      15.6 
 Other comprehensive (losses) 
  / income: 
 Exchange differences 
  on translation of foreign 
  operations                            -          -       (0.7)           -      (0.7)          (0.1)     (0.8) 
 Actuarial losses on defined 
  benefit pension schemes               -          -           -      (10.5)     (10.5)              -    (10.5) 
 Deferred tax on defined 
  benefit pension schemes               -          -           -         2.3        2.3              -       2.3 
 Total comprehensive income 
  / (losses) for the year 
  31(st) December 2011                  -          -       (0.7)         7.5        6.8          (0.2)       6.6 
 Dividends paid                         -          -           -       (1.2)      (1.2)              -     (1.2) 
 At 31(st) December 2011             32.5       29.6        84.0        21.4      167.5            0.2     167.7 

*Restated for deferred tax - see note 5


   1.       Segmental analysis 

The directors consider that there are two operating segments namely AGA and Rangemaster.

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.

Entity wide disclosures in respect of revenues from external customers and non-current assets are provided below:

                            2011             2010 - Restated 
                    --------------------  -------------------- 
                                    Non-                  Non- 
                                 current               current 
                      Revenue     assets    Revenue     assets 
                         GBPm       GBPm       GBPm       GBPm 
 United Kingdom         157.7       67.9      163.1       68.9 
 North America           29.5       30.8       29.8       31.1 
 Europe                  57.7       40.2       59.9       39.8 
 Rest of World            6.0          -        6.3          - 
 Total operations       250.9      138.9      259.1      139.8 
 Tax                        -        4.1          -        8.7 
 Total                  250.9      143.0      259.1      148.5 

Non-current segmental assets exclude the deferred tax assets.

   2.       Dividends 

The directors are recommending a final dividend of 1.1 pence per share in respect of the financial year ended 31(st) December 2011 (2010: 1.0 pence per share). An interim dividend of 0.8 pence per share was paid in the year (2010: 0.7 pence per share).

   3.       Exchange rates 

The income statements of overseas subsidiaries are translated into sterling using average exchange rates and balance sheets are translated at year end rates.

   4.       Net pension credit 
                                                      2011    2010 
                                                      GBPm    GBPm 
 Current service cost - defined benefit              (3.3)   (3.1) 
 Curtailment gain                                        -    16.3 
 Net pension returns on assets and interest costs      6.4     3.2 
 Net pension credit                                    3.1    16.4 
   5.       Tax 
                                                          2011       2010 
                                                          GBPm       GBPm 
 United Kingdom corporation tax 
 Current tax on income for year                            0.3        0.5 
 Adjustments in respect of prior years                  (11.2)        3.4 
 United Kingdom corporation tax                         (10.9)        3.9 
 Overseas current tax on income for year                 (0.6)        0.5 
 Total current tax (credit) / charge                    (11.5)        4.4 
 United Kingdom deferred tax charge: 
  - change in rate of corporation tax                      0.2        0.1 
  - current year                                           2.3        4.6 
  - adjustments in respect of prior years                  3.6      (3.1) 
 Overseas deferred tax credit in year                        -      (0.2) 
 Total deferred tax charge                                 6.1        1.4 
 Total United Kingdom tax                                (4.8)        5.5 
 Total overseas tax                                      (0.6)        0.3 
 Tax (credit) / charge- continuing operations            (5.4)        5.8 
 The total tax (credit) / charge in the consolidated 
  income statement is disclosed as follows: 
 Tax (credit) / charge - continuing operations           (5.4)        5.8 
 Tax (credit) - discontinued operations                  (5.7)          - 
-----------------------------------------------------  -------  --------- 
 Total tax (credit) / charge                            (11.1)        5.8 
-----------------------------------------------------  -------  --------- 

The continuing tax credit for the year includes a GBP6.1m credit being a release of provisions made for tax in respect of the prior year tax returns now agreed, split between a GBP11.0m credit in respect of corporation tax and a charge of GBP4.9m in respect of deferred tax. The tax credit of GBP5.7m included in discontinued operations relates to adjustments in respect of prior years tax returns now agreed for previously discontinued operations.

Prior year adjustment

In resolving a number of prior year deferred tax items, it has been identified that the deferred tax balances recorded in prior years needed to be recalculated. Due to the fact that the impact is considered by the Group to be material to the statement of the tax position, the results presented at 31st December 2010 have been restated by means of a prior year adjustment.

The effect of the restatement of the 31st December 2010 financial statements is to reduce deferred tax assets by GBP3.1m to GBP8.7m and to increase deferred tax liabilities by GBP1.7m to GBP5.7m. The impact on the income statement is to increase income tax expense by GBP0.8m to GBP5.8m and therefore decrease profit for the year after tax by GBP0.8m to GBP14.1m. The impact on earnings per share was to decrease basic and diluted earnings per share from 21.7p to 20.5p. Cumulative retained losses at 31st December 2009 were increased by GBP4.0m to GBP18.1m.

Factors affecting future tax charge

A reduction in the UK corporation tax rate from 28% to 26% was substantively enacted in March 2011 and was effective from 1st April 2011. A further reduction from 26% to 25% was substantively enacted in July 2011 and will be effective from 1st April 2012. Accordingly, these rates have been applied in the measurement of the Group's deferred tax assets and liabilities as at 31st December 2011.

In addition, the Government announced its intention to further reduce the UK corporation tax rate to 24% from 1st April 2013 and to 23% from 1st April 2014. The aggregate impact of the proposed reductions from 25% to 23% would reduce the deferred tax assets and deferred tax liabilities by approximately GBP0.1m and GBP0.2m, respectively.

   6.       Earnings per share 
                                                           2011       2010 
                                                           GBPm       GBPm 
 Earnings for the purpose of the basic and diluted 
 Profit after tax                                          12.9       14.1 
 Non-controlling interest                                   0.1        0.1 
 Profit attributable to equity holders of the parent 
  - continuing operations                                  13.0       14.2 
 Profit after tax - discontinued operations                 2.7          - 
 Profit attributable to equity holders of the parent 
  - total operations                                       15.7       14.2 
 Weighted average number of shares in issue             million    million 
 For basic EPS calculation                                 69.3       69.2 
 Dilutive effect of share options                             -          - 
 For diluted EPS calculation                               69.3       69.2 
 Earnings per share attributable to equity holders 
  of the parent                                               p          p 
 Continuing operations 
 Basic                                                     18.8       20.5 
 Diluted                                                   18.8       20.5 
 Discontinued operations                                      p          p 
 Basic                                                      3.9          - 
 Diluted                                                    3.9          - 
 Total operations                                             p          p 
 Basic                                                     22.7       20.5 
 Diluted                                                   22.7       20.5 
   7.       Non-recurring costs 

The non-recurring costs amount to GBP2.1m in total (2010: GBP1.4m). GBP0.9m (2010: GBPnil) relates to the impairment of assets held for sale, GBP0.4m (2010: GBP0.6m) relates to reorganisation of our AGA Marvel US and Canadian manufacturing and distribution operations, GBP0.3m (2010: GBPnil) relates to costs of finalising prior period tax returns and GBP0.5m (2010: GBP0.8m) in relation to the costs of redundancies and employee matters arising later in the year from the introduction of new systems and new products.

   8.       Post balance sheet event 

The Company has received a judgement from a German court in 2012 relating to the valuation of a minority shareholding in a business which the Group acquired in 1998 and sold in 2001 as part of the Pipe Systems disposal and therefore expects settlement payments to be made in 2012. The provision held reflects the expected settlement.

2012 financial calendar

 Annual General Meeting                       3(rd) May 2012 
 2012 Half year close                       30(th) June 2012 
 Record date for final ordinary dividend   20(th) April 2012 
 Final ordinary dividend payable             1(st) June 2012 

The 2011 full year results were approved by the board of directors on 9(th) March 2012. The financial information set out in this announcement does not constitute the Company's statutory accounts for the years ended 31(st) December 2011 and 2010. The financial information within this announcement is prepared in line with the accounting policies presented within the Company's statutory accounts for the current and previous years. Statutory accounts for 2010 have been delivered to the Registrar of Companies and those for 2011 will be delivered following the Company's Annual General Meeting. The Company's auditor has reported on these accounts; its reports were unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006.

This information is provided by RNS

The company news service from the London Stock Exchange



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