TIDMAGA
RNS Number : 0200Z
Aga Rangemaster Group PLC
09 March 2012
9(th) March 2012
FOR IMMEDIATE RELEASE
AGA RANGEMASTER GROUP PLC
2011 FULL YEAR RESULTS
INCREASE IN PROFITS ACHIEVED IN EXACTING YEAR
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."
Enquiries:
William McGrath, Chief Executive 020 7404 5959 (today)
Shaun Smith, Finance Director 01926 455 731 (thereafter)
Simon Sporborg / Charlotte Kenyon 020 7404 5959
(Brunswick)
CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENT
Overview
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.
Revenue
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).
Taxation
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).
Dividends
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.
BUSINESS REVIEW
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.
CONSOLIDATED INCOME STATEMENT
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
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Restated*
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
CONSOLIDATED BALANCE SHEET
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
Equity
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
CONSOLIDATED CASH FLOW STATEMENT
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
flows:
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
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
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
to
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
NOTES
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
Restated
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
Restated
2011 2010
GBPm GBPm
Earnings for the purpose of the basic and diluted
EPS
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
END
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