11 Mar 2011 07:00
11th March 2011FOR IMMEDIATE RELEASE AGA RANGEMASTER GROUP PLC 2010 FULL YEAR RESULTS INCREASE IN PROFITS AND CASH BALANCES ACHIEVED IN EXACTING YEARYear to 31st December 2010 2009 GBPm GBPmRevenue 259.1 245.0EBITDA (before non-recurring costs) 29.8 12.6Operating profit before amortisation 6.9 0.1Operating profit / (loss) 5.1 (1.5)Profit before tax 19.9 0.5Basic earnings per share 21.7p 2.5pTotal equity 167.1 134.3Total dividend 1.7p -Net cash 34.6 28.0
Strategic and operational highlights
* Revenues rose nearly 6% in the year to £259.1 million; operating profit before amortisation increased to £6.9 million (2009: £0.1 million) and profit before tax including pension curtailment gains was £19.9 million (2009: £0.5 million). * Net cash rose again to £34.6 million from £28.0 million at the end of 2009 and £5.8 million at the end of 2008 reflecting continuing tight cost and cash flow management. * Dividends were restored for the year at a total of 1.7 pence per share (2009: nil) - a sign of the Group's confidence in its prospects. * Product development programmes of recent years are now providing traction in existing and new markets. We expect this to support the trend for range cookers to take share from equivalent built-in formats.
William McGrath, Chief Executive commented: "Our two core brands, Rangemaster and the classic AGA, put in strong performances and were key to the near 6% revenue increase we saw during 2010. We expect similar trend lines in 2011 in spite of the clouds over consumer markets. Strong finances, good operational gearing and investment in new products were the themes of 2010 which will bring clear cut progress in 2011."
Enquiries:
William McGrath, Chief Executive 0207 404 5959 (today)Shaun Smith, Finance Director 01926 455 731 (thereafter)
Simon Sporborg / Charlotte Kenyon, Brunswick 0207 404 5959
AGA RANGEMASTER GROUP PLC 2010 FULL YEAR RESULTS CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENTOverview
2010 saw good progress by the Group as we focused on range cookers and kitchen living despite the exacting conditions and our core consumer markets remaining subdued. Particular features of the year were:
* The restoration of revenue growth - up nearly 6% at £259.1 million - with positive trend lines continuing through the year. * The appreciable improvement in operating profits before amortisation to £6.9 million (2009: £0.1 million) and £5.1 million (2009: £1.5 million loss) after amortisation. * The further strengthening of our net cash position to £34.6 million from £28.0 million a year ago meaning we have seen the Group's net cash balances increase by nearly £29 million in the last two years. * The further integration and streamlining of our operations boosting operational gearing as we use our Rangemaster developed business processes across the Group. This was seen with AGA and Rangemaster in the UK and Heartland and Marvel in North America. * There is now a net surplus in the pension schemes on an accounting basis and the indications are that the deficit has fallen appreciably on an actuarial basis. * The product development work of recent years is now bringing substantial benefits seen, for example, with induction ranges and with the new Rangemaster 100cm lines. We expect new products to make a substantial impact in 2011.
These factors taken together underpin the confidence of the board in both the resilience and the prospects for the Group which is reflected in the restoration of dividend payments.
Trading performance in 2010 2010 saw a steady pick up in the level of sales with revenues of £259.1 million, up nearly 6% at the full year having been up 4.8% at the half year. Of sales in 2010, 63% were in the UK and 37% internationally as we look to progress towards our 50% KPI target for international sales. Profits increased as the operational gearing benefits of higher revenues showed through. In the year there was also a significant curtailment gain arising from the freezing of final salaries in the pension scheme which amounted to £16.3 million. Taking this and other non-recurring items into account profit before tax was £19.9 million compared with £0.5 million in the prior year.
Given the strengthened financial and cash positions, the board is proposing a final dividend per share of 1.0 pence for the year bringing the total for the year to 1.7 pence per share.
Strategic progress The board's first objective since the market turned down sharply in the second half of 2008 has been to secure the position of the Group through tight financial management - the importance of the task heightened by the relative size of the operations and the pension scheme. The cost cutting actions made early in the recession have been followed up with a series of steps to integrate our operations more closely in order to achieve efficiency improvements. These have worked well. The cost base is now significantly lower than it was heading into the recession and we have 20% fewer employees than three years ago. We expect over 40% of incremental revenue to feed into operating profits. We have also kept our focus on the well-established positions and the continuing potential of our brands to see how they can continue to generate the growth necessary to create the value increases expected by our shareholders.
Our plans to develop the business are then reflected in the progress made at Rangemaster. Since the repositioning in 2002 the brand and operation has moved from breakeven to delivering the Group's KPI target of 10% return on sales. We have a factory in Leamington Spa which uses modern robotics to ensure our cooking cavities are the best in the sector. We are the first range cooker manufacturer to receive Energy Saving Trust certification across all its dual fuel and induction cookers. Progress continues to come from product innovation. We have succeeded in making induction a mainstream rather than a specialist technology due to the price points we have and it now accounts for almost 10% of Rangemaster cooker volumes. Progress comes from closely working with our dealers - over 200 of which have Rangemaster Design Centres - and we have expanded the brand offering so that for every pound spent on Rangemaster cookers in the UK a further 30 pence is spent on other Rangemaster appliances. Growth also comes from international expansion with almost a quarter of cooker sales volumes being outside Britain. We are now looking to raise that proportion to over 30%.
We believe that our cast iron cooker portfolio will see sales growth as our product development programmes align our products with changing consumer needs. Research shows that it is the combination of a 'warm welcome home' alongside cooking quality that has attracted generations of households to AGA, Rayburn and Stanley. With the modern programmable AGA in particular, the AGA is more flexible operationally and will, in future, become still more so. The electric AGA can play a part in helping make use of renewable energy generated locally - a key way to avoid the transmission losses suffered by the electricity grid. With Rayburn and Stanley we have added condensing boilers and more adaptable fluing as we drive the idea harder of having a single appliance at the heart of the home providing cooking, hot water and central heating. Here again our engineers have worked out how to make our products part of a system incorporating renewables - through our Eco-Connect packages. We also have in place an installation arrangement with the Mark Group for solar hot water and solar electric panels.
We believe that customers want to buy a wider range of complementary products for their home and in particular, kitchen needs - hence our ownership of Fired Earth and Grange. Fired Earth has struggled for some years to be profitable in spite of being widely appreciated for its product leadership and brand. We have now narrowed the product focus of Fired Earth keeping tiles as the dominant range and have supplemented our offering through the 'Tile Basics' range which widens the pricing spectrum. Our KPI remains to return Fired Earth and Grange to overall profitability and progress has been made during the year.
We also took the further step to help ensure Fired Earth achieves its KPI target by bringing in the experienced retailer and venture capitalist, Andrew Manders, to run Fired Earth on an interim basis and to assess a long-term operational framework for the business. Fired Earth now operates off a lower fixed cost base with higher net margins reducing the run rate of losses - although sales revenues are flat.
Kitchens are also a key part of the Grange and Fired Earth's product portfolio and Charlie Smallbone has also developed three new kitchen ranges for them - made by Grange in France. They are helping to attract a wider and energetic range of dealers internationally to the Grange brand. The idea of showing a complete kitchen including appliances may prove to be the model for the future for AGA, La Cornue and Grange in international markets as well as for Fired Earth in the UK.
Customer relationship management By focusing on the first 60 days after initial enquiry and tailoring our responses to each enquirer, we have increased the conversion ratio from enquiry to order across our brands, most notably within our own AGA Shops in the UK. Leveraging the Group's customer database remains one of our key KPIs. Our database of over 1.3 million households continues to grow, enabling us to contact prospects and customers about news and events. We have increased our contact with the people on our database through various channels, including online, where we have developed our website, email and social media interaction. As a result of this, we are pleased that central brochure requests have increased by 30% while online sales have increased by 40% in the past year.
Pension funding The Group's main pension scheme is large relative to the size of the Group. On an IAS 19 accounting basis at 31st December 2010 the Group's pension schemes had a net surplus of £7.1 million on assets of £759.5 million compared to a deficit of £40.5 million in 2009. This will give rise to a net pension credit of circa £3.0 million in 2011 (2010: £0.1 million). The main pension scheme's last formal triennial actuarial valuation was as at 31st December 2008. The current recovery plan put in place on completion of that valuation requires payments or guarantees of £2 million in 2011, £10 million a year from 2012 to 2020 inclusive, and a bullet payment of £48 million on 31st December 2020. The indications are that the actuarial position has improved appreciably. Three years ago the Company reached a long-term funding agreement with the trustee of the scheme to make the scheme fully funded on a self-sufficiency basis by 31st December 2020. This agreement is intended to provide a new recovery plan from the 2011 triennial actuarial valuation. The Company continues to provide £50 million of guarantees in support of the Group's potential obligation to the scheme in 2020 under the agreement. In the meantime the Company and trustee continue to look to take steps to reduce the risks and minimise the volatility of the scheme and to take measures such as the freezing of current member pensionable salaries which will manage down the potential exposure of the Group in the long run.
Other items The Group received cash of £7.6 million on 7th January 2011 on the exercise of an option held by Niagara Corporation to acquire the freeholds of certain properties used by operations it acquired from the Group in 1999. Net income in 2010 from these properties was £0.8 million following a rent review in 2009, and the sale will give rise to a book profit in 2011 of over £0.6 million.
The Group expects a judgment from a German court this year relating to the valuation of a minority shareholding in a business which the Group acquired in 1998 and sold in 2001. A provision to meet possible costs arising has been maintained for some years.
People
The enthusiasm and energy of our employees has been a particular feature of the year. We have adapted well to new ideas and processes that will ensure we are competitive and have the quality and innovative products required by our customers.
Peter Tom left the board after six years in which he made a major contribution to the Group's strategic development, latterly as senior non-executive director. He was replaced by Paul Dermody as senior non-executive director, and Jon Carling whose career has been in design and engineering within the premium car industry - notably Jaguar and Aston Martin - and who has recently joined Rolls-Royce aero-engine operations.
Current trading The reduced cost base and increased efficiencies made over the past three years means that the Group's operational gearing should, with revenue growth, bring good progress. We have planned for continuing growth in revenue. However, as the factors affecting trading (the UK housing market and consumer confidence) remain fragile, we are ready to respond to difficult market conditions. Our new product launches will, we expect, have a positive impact. The focus on cash management and costs in recent years will be sustained.
AGA and Rayburn started 2011 encouragingly, with strong marketing and product launch programmes in place, already reflected in lead generation and home survey numbers. We expect the 2010 bounce-back in sales to be sustained. For Fired Earth the stronger end to 2010 has given way to a more volatile start in 2011. Our upgraded transactional website is performing encouragingly. Rangemaster has had a sound start to 2011, with UK orders satisfactory so far this year and more progress being achieved on the continent. The North American markets continue to be quiet.
We have confidence in the strategic direction we have taken in recent years - even though our consumer markets have been buffeted by challenging economic conditions. The systematic work to improve our operations and the focus on niches in our market places where we can expand our market positions with relevant and exciting products does provide expectations for strengthened financial performance. We, therefore, expect 2011 to be a year of clear cut progress.
BUSINESS AND FINANCE REVIEW
2010 saw improved results due to operational process efficiencies, our strengthening product portfolio, and our continued focus on leveraging our market leading brands. This all helped improve results, despite our markets remaining quiet. A good lead indicator has been mortgage approvals in the UK which picked up in late 2009 and then remained largely flat during 2010 at levels under half the market peak of 2007. Mortgage approval levels have started slowly in 2011. The UK appliance markets were marginally ahead with our core sub-sector of range cookers performing better than the wider cooker market. The North American appliance markets were up 3.3% with the premium end weaker, most notably in the second half of the year.
Against this background, we worked methodically to raise efficiencies. The integration of AGA, Rangemaster and Stanley into one structure has worked well and there are now closely identified projects within the manufacturing, distribution and service support areas of the business that will bring further benefits. Similarly, in North America AGA Marvel is now operating as a single operation using methodologies created in the UK for AGA Rangemaster. In November 2010 the transfer of hot side production from Kitchener near Toronto to our manufacturing and distribution hub in Greenville, Michigan took place. Such efficiency improvements are critical given renewed cost pressures as commodity and component prices rise. We have an Asian Sourcing Office based in Hong Kong which ensures we have a flexible approach to international sourcing. The team is also part of the push to sell our products into emerging markets. In all our markets we keep close control of key inputs like steel, electricity and gas taking hedged positions where economical and practical whilst also looking to mitigate inflationary pressures through selling price increases. Our two-year electricity and gas deal entered into at the end of 2009 has, for example, proved worthwhile as prices have subsequently risen sharply. We feel that we have fundamentally reduced the cost base and that there is deliverable operational gearing available to the Group.
Cast iron cookers : AGA, Rayburn and Stanley 2008 and 2009 saw sharp falls in demand for cast iron cookers, most notably in Ireland. In 2010 AGA sales partially recovered but Rayburn and Stanley sales did not. Overall with sales of 11,650 units we moved further away from our 2007 sales level and our KPI of 19,600 units. The improved AGA sales reflected the return of some confidence to our customer base. Our good lead generation was helped by our 'Official Guide' to purchasing an AGA which summarises the key features of why so many people love and cherish their AGA and how easy to buy and how flexible the modern products are. We are now looking to have AGA cookers in more kitchen specialist stores showing the AGA in modern kitchen formats where built-in lines are typically found. We have also segmented our market by focusing inter alia, on 'entry level' prices, notably with the two-oven oil AGA at £4,995 and the emerging markets for home energy management with the new Kidderminster centre. Trade up programmes and burner upgrades to add programmability to existing models have become a well-developed and a noteworthy adjunct to the business. We are also expanding our 'grass roots' contact with consumers through our 2010/2011 sponsorship of the AGA Ladies' Point-to-Point races, which will culminate in the final at Cheltenham on 4th May.
Rayburn has seen a complete product line overhaul in the last four years. The 600 Series is steadily building a position in the oil and gas market given its 'A' rated condensing boiler and its larger ovens. We are adding a conventional flue model to a power flue option which materially expands the target market for Rayburn by simplifying many installations. In 2010 demand was lower for wood burning models - a trend we expect to see reverse as the oil price moves back up. We have looked again at our routes to market and are working to establish closer links in the heating and plumbing specialist sector to emphasise that the Rayburn or Stanley can be the hub of a domestic heating system - potentially incorporating renewables such as solar collectors where systems need to be integrated. Our expanded presence in the stove market supports this trend. Indeed, success in stoves was central to sustaining our position in what were exceptionally difficult markets in Ireland. The Cara insert stove - which makes a solid fuel fire up to three times more efficient than an open fire - helped stove volumes in Ireland rise 30%.
Rangemaster cookers and other appliances 2010 was another successful year for the Rangemaster operations. Cooker volumes were up by nearly 5% to 63,900 - still well short of the 76,000 units established as the base level KPI in 2007. The capacity of the Leamington Spa factory is 100,000 units. The product manufacturing efficiency programme continues to be strong - seen, for example, in the expanded use of robotics and specifically the new internally designed and patented single piece base frame providing solidity to the products.
The range cooker market outperformed the overall cooker market in the UK. We are determined to underline the virtues of having a range at the heart of the kitchen moving the centre of gravity of a household from the sitting room to the kitchen and how it brings greater flexibility than built-in equivalent products and can often be less costly. We now have a strong overall portfolio of products with refrigeration lines including side-by-side and integrated models. We continue to expand our continental operations, building up design centres equivalent to those in the UK. With induction sales growing rapidly and with the 100cm models starting to impact in a sub sector of the range cooker market in which we previously did not have a product offering, and with new designs being prepared for launch, volumes are expected to rise further this year.
Our Nottingham plant makes specialised parts for our cookers and is also the last significant domestic stainless steel sink manufacturing facility in the UK. We have been investing to enhance our design capabilities expanding our Rangemaster sink brand alongside our trade brand, Leisure.
In North America, AGA Marvel had a tough second half as the housing market remained slow and higher end appliances struggled as a sub sector. Our hot-side operation, encompassing sales of Heartland and AGA branded cookers, was quiet. We have integrated our dealer structures to have the strongest offering possible - acting as distributor ourselves in Canada. Our product portfolio has been strengthened with new Energy Star rated products, a new forced air platform for beverage centres and a clear door refrigerator. All these new lines made in our factory in Michigan will enable us to benefit quickly when market conditions improve.
Cookware - sold by AGA and Divertimenti - is a significant part of our product offering. 2010 was a strong year and online sales grew rapidly. The great reputation of Divertimenti and its two flagship London stores was underpinned by our successful cookery schools which attract top chefs to lead termly classes and by suppliers looking to Divertimenti as a natural partner when launching new products. At AGA we are launching complete new ranges of cast iron and stainless steel saucepans this spring in order to tap into the considerable growth opportunities in the cookware business.
Fired Earth made a loss as revenues were flat. Larger bathroom and kitchen installations were slow but the tile business, backed by the launch last spring of the 'Tile Basics,' range saw revenues up 3% with orders up 5%.
Grange was close to breakeven in Europe with rationalisation in France now producing a good balance with our Romanian factory established in 2004. Our modular lines, typified by bespoke wall-to-ceiling bookcases, represent 20% of sales and continue to gain recognition. Our dealers see Grange's heritage supplemented by modern design as making Grange a growing force in their market places. Our innovative multi-functional coffee table epitomises the new vibrancy of Grange. It is in North America, where Grange has a fixed cost rental structure and with revenues flat at $7 million, that it continues to make losses. New products increased sales to key specialist customers and the benefits of systematic marketing initiatives provide a basis to expect continuing progress in 2011. Working more closely with the Group's customer database is key to improving performance. We continue to develop our approach to customer relationship management.
Finance strategy The Group seeks to maintain a strong balance sheet to fund its development opportunities whilst also being mindful of the scale of the main pension scheme.
The Group has continued with a rigorous and disciplined approach to cost and cash management. The result is both improved profitability and an increase in net cash from £28.0 million at the start of the year to £34.6 million at the end of 2010. We therefore have the financial resource to assist the Group to pursue its development plans.
Revenue
Group revenues increased by 5.8% to £259.1 million from the £245.0 million reported in 2009. Second half revenues of £135.7 million were up 6.7%, an increase over the growth experienced in the first half when revenues were £123.4 million, up 4.8% on the £117.8 million reported in the first half of 2009. Of total revenues 37% were outside the UK (2009: 36%).
Operating profit The operating profit for the year was £5.1 million, much improved from the loss of £1.5 million reported in 2009. The second half profit of £4.3 million followed on from a first half profit of £0.8 million as the Group benefitted more fully from the operational efficiencies implemented in 2008 and 2009.
Non-recurring costs Non-recurring costs in the year totalled £1.4 million. The cost of transferring our hot-side business from Canada to Greenville was $1.0 million (£0.7 million) and is expected to deliver cost savings of $0.9 million in 2011. Integrating the sales distribution structure for the Group in Ireland cost £0.3 million. Stanley is now the Irish local distributor for our appliance brands in Ireland. In addition, there were headcount reductions at AGA and Fired Earth.
Finance costs Net finance costs for the year were £0.2 million (2009: £0.2 million finance income). 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 £19.9 million (2009: £0.5 million) and included a pension curtailment gain of £16.3 million as we froze the pensionable salary for all scheme members whose salaries were not frozen in 2009.
Taxation
The Group's tax charge was £5.0 million (2009: £nil) on profits before tax of £19.9 million. The Group tax rate was 25.1%.
Moving forward the Group expects to pay tax at around the UK standard rate of 27% once the benefit of the tax losses arising during the economic slow down have been utilised.
Earnings per share Basic earnings per share were 21.7 pence (2009: 2.5 pence) based on an average number of shares in issue of 69.2 million (2009: 69.2 million).
Dividends
The board is proposing a final dividend of 1.0 pence per share making the full year dividend 1.7 pence (2009: nil pence). The cash cost of the total dividend for the full year will be £1.2 million. The final dividend will be paid on 3rd June 2011.
Cash flow The Group has continued with its disciplined approach to cash management. The outcome was cash flow generated from operating activities of £15.7 million in the year which followed on from the £25.3 million generated in 2009 and resulted from a determined effort to destock further and manage working capital down in the face of difficult economic conditions.
The net inflow from working capital in the year was £8.7 million (2009: £22.9 million).
Capital expenditure including intangibles in the year totalled £5.7 million compared to £8.1 million in 2009 (which included a £2.8 million payment on the AGA Marvel facility in the US). The depreciation and amortisation of intangibles charge in 2010 was £8.3 million (2009: £8.7 million).
The resulting net cash position at 31st December 2010 was £34.6 million (2009: £28.0 million).
CONSOLIDATED INCOME STATEMENTYear to 31st December 2010 2009 GBPm GBPmRevenue 259.1 245.0 Net operating costs (254.0) (246.5)
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Group operating profit / (loss) 5.1 (1.5)Net pension credit 16.4 5.4Non-recurring cost (1.4) (3.6)
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Profit before net finance costs and income tax 20.1 0.3Finance income 0.2 1.1Finance costs (0.4) (0.9)
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Profit before income tax 19.9 0.5Income tax expense (5.0) -
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Profit for year 14.9 0.5
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Profit attributable to: Equity holders of the parent 15.0 1.7Non-controlling interests (0.1) (1.2)
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Profit for year 14.9 0.5
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Earnings per share attributable to equity holders of p pthe parent Basic 21.7 2.5Diluted 21.7 2.5
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Dividend per share p pInterim paid 0.7 - Final proposed 1.0 -
____________________________________________________________________________________ Total ordinary dividend
1.7 -
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All operations are continuing.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME / (LOSSES)Year to 31st December 2010 2009 GBPm GBPmProfit for year 14.9 0.5
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Exchange adjustments on hedge of net investments - 1.6Exchange differences on translation of foreign operations (1.1) (9.3)Actuarial gains / (losses) on defined benefit pension schemes 26.6 (104.5)Deferred tax on actuarial (gains) / losses (7.2) 29.3
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Other comprehensive income / (losses) for the year 18.3 (82.9)
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Total comprehensive income / (losses) for the year 33.2 (82.4)
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Attributable to: Equity holders of parent 33.3 (81.1)Non-controlling interests (0.1) (1.3)
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Total comprehensive income / (losses) for the year 33.2 (82.4)
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CONSOLIDATED BALANCE SHEETAs at 31st December 2010 2009 GBPm GBPmNon-current assets Goodwill 66.7 66.9Intangible assets 22.9 23.2Property, plant and equipment 40.8 50.8Retirement benefit surplus 8.6 -Deferred tax assets 11.8 21.7
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150.8 162.6
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Current assets Inventories 42.8 46.0Trade and other receivables 30.6 31.7Current tax assets 1.8 1.8Cash and cash equivalents 51.7 45.0
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126.9 124.5Assets held for sale 10.2 3.1
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Total assets 287.9 290.2
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Current liabilities Borrowings (1.7) (1.3)Trade and other payables (67.5) (63.2)Current tax liabilities (20.4) (18.4)Current provisions (2.1) (2.4)
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(91.7) (85.3)
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Net current assets 35.2 39.2
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Non-current liabilities Borrowings (15.4) (15.7)Retirement benefit obligation (1.5) (40.5)Deferred tax liabilities (4.0) (6.1)Provisions (8.2) (8.3)
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(29.1) (70.6)
___________________________________________________________________________________ Total liabilities
(120.8) (155.9)
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Net assets 167.1 134.3
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Equity Share capital 32.5 32.5Share premium account 29.6 29.6Other reserves 84.7 85.8Retained earnings / (losses) 19.9 (14.1)
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Equity attributable to equity holders of the parent 166.7 133.8Non-controlling interest 0.4 0.5
___________________________________________________________________________________ Total equity
167.1 134.3
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CONSOLIDATED CASH FLOW STATEMENTYear to 31st December 2010 2009 GBPm GBPmOperating activities Profit before income tax 19.9 0.5
Reconciliation of profit before income tax to net cash flows: Net finance costs / (income)
0.2 (0.2)Depreciation of property, plant and equipment 6.5 7.1Impairment of assets held for sale - 0.8Amortisation of intangible assets 1.8 1.6Loss on disposal of property, plant and equipment 0.1 0.1Share based payments expense 0.1 0.2Decrease in inventories 3.1 15.3Decrease in receivables 0.8 5.6Increase in payables 4.8 2.0Decrease in provisions (0.4) (1.3)Movement in pensions (21.2) (6.4)
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Cash generated from operating activities 15.7 25.3Finance income 0.2 1.1Finance costs (0.4) (0.9)Tax (payment) / receipt (2.3) 4.0
____________________________________________________________________________________ Net cash flows from operating activities
13.2 29.5
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Investing activities Disposal related costs (0.4) (0.4)Purchase of Mercury - (0.5)Purchase of property, plant and equipment (3.7) (6.2)Expenditure on intangibles (2.0) (1.9)Proceeds from disposal of property, plant and equipment 0.1 -
____________________________________________________________________________________ Net cash used in investing activities
(6.0) (9.0)
____________________________________________________________________________________ Financing activities
Dividends paid (0.5) -Repayment of borrowings (0.2) (20.5)New bank loans raised 0.3 2.6
____________________________________________________________________________________ Net cash used in financing activities
(0.4) (17.9)
____________________________________________________________________________________ Effects of exchange rate changes
(0.1) (0.5)
____________________________________________________________________________________ Net increase in cash and cash equivalents
6.7 2.1Cash and cash equivalents at beginning of year 45.0 42.9
____________________________________________________________________________________ Cash and cash equivalents at end of year
51.7 45.0
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31st December 2010
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 GBPmAt 1st January 2010 32.5 29.6 85.8 (14.1) 133.8 0.5 134.3
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Comprehensive income Profit / (loss) for the year - - - 15.0 15.0 (0.1) 14.9Other 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 31st December 2010 - - (1.1) 34.4 33.3 (0.1) 33.2Dividends paid - - - (0.5) (0.5) - (0.5)Share based payments - - - 0.1 0.1 - 0.1
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At 31st December 2010 32.5 29.6 84.7 19.9 166.7 0.4 167.1
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31st December 2009
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 1st January 2009 32.5 29.6 95.5 57.1 214.7 1.8 216.5
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Comprehensive income Profit / (loss) for the year - - - 1.7 1.7 (1.2) 0.5 Other comprehensive (losses) /
income: Exchange adjustments on hedge of net investments - - 1.6 - 1.6 - 1.6Exchange differences on
translation of foreign operations - - (9.2) - (9.2) (0.1) (9.3) Actuarial losses on defined
benefit pension schemes - - - (104.5) (104.5) - (104.5)
Deferred tax on actuarial losses - - - 29.3 29.3 - 29.3 _____________________________________________________________________________________________ Total comprehensive losses for the year to 31st December 2009 - - (7.6) (73.5) (81.1) (1.3) (82.4) Transfer between reserves - - (2.1) 2.1 - - - Share based payments
- - - 0.2 0.2 - 0.2
_____________________________________________________________________________________________ At 31st December 2009
32.5 29.6 85.8 (14.1) 133.8 0.5 134.3
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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. The majority of the disclosures as required under IFRS 8 have therefore already been given in these financial statements.
Segment assets include property, plant and equipment, intangibles, inventories, retirement benefit surpluses and receivables - cash and taxation are not included. Non-current assets exclude the deferred tax assets. Entity wide disclosures in respect of revenues from external customers, total segment assets and non-current assets are provided below:
2010 2009 Total Non- Total Non- segment current segment current Revenue assets assets Revenue assets assets GBPm GBPm GBPm GBPm GBPm GBPmUnited Kingdom 163.1 117.9 68.9 156.5 116.3 69.0North America 29.8 42.0 30.3 30.6 43.2 30.5Europe 59.9 62.7 39.8 53.8 62.2 41.4Rest of World 6.3 - - 4.1 - -
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Total operations 259.1 222.6 139.0 245.0 221.7 140.9 Tax
- 13.6 11.8 - 23.5 21.7Cash - 51.7 - - 45.0 -
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Total 259.1 287.9 150.8 245.0 290.2 162.6
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2. Dividends
The directors are recommending a final dividend of 1.0 pence per share in respect of the financial year ended 31st December 2010 (2009: nil). An interim dividend of 0.7 pence per share was paid in the year (2009: nil).
3. Exchange rates
The income statements of overseas subsidiaries are translated into sterlingusing average exchange rates and balance sheets are translated at year endrates.4. Net pension credit 2010 2009 GBPm GBPmCurrent service cost - defined benefit (3.1) (2.3)Curtailment gain 16.3 3.8Net pension returns on assets and interest costs 3.2 3.9
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Net pension credit 16.4 5.4
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5. Income tax 2010 2009 GBPm GBPmUnited Kingdom corporation tax based on a rate of 28.0% (2009: 28.0%):Current tax on income for year 0.5 (1.6)Adjustments in respect of prior years 3.4 3.5
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United Kingdom corporation tax 3.9 1.9Overseas current tax on income for year 0.5 1.1
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Total current tax charge 4.4 3.0
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United Kingdom deferred tax charge / (credit): - change in rate of corporation tax 0.1 -- current year 3.8 (0.8)- prior year adjustments (3.1) -Overseas deferred tax credit in year (0.2) (2.2)
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Total deferred tax charge / (credit) 0.6 (3.0)
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Total United Kingdom tax 4.7 1.1Total overseas tax 0.3 (1.1)
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Total income tax 5.0 -
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6. Earnings per share
2010 2009 GBPm GBPmEarnings for the purpose of the basic and diluted EPS Profit after tax 14.9 0.5Non-controlling interest 0.1 1.2
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Profit attributable to equity shareholders - for basic and diluted EPS
15.0 1.7
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Weighted average number of shares in issue million millionFor basic EPS calculation 69.2 69.2Dilutive effect of share options and Long-Term Incentive Plan - -
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For diluted EPS calculation 69.2 69.2
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Earnings per share p p Basic 21.7 2.5Diluted 21.7 2.5
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7. Non-recurring cost
The £1.4m non-recurring cost relates primarily to integration costs at AGA Marvel and further rationalisation costs at AGA, Fired Earth and Waterford Stanley.
8. Post balance sheet event
On 7th January 2011 the Group received £7.6m on the exercise of an option held by Niagara Corporation to acquire the freeholds of certain properties used by the operations it acquired from the Group in 1999.
2011 financial calendarAnnual General Meeting 5th May 20112011 half year close 30th June 2011Record date for final ordinary dividend 22nd April 2011Final ordinary dividend payable 3rd June 2011
The financial information set out in this announcement does not constitute the Company's statutory accounts for the years ended 31st December 2010 and 2009. The financial information within this announcement is prepared in line with the accounting policies presented within the Company's statutory accounts. Statutory accounts for 2009 have been delivered to the Registrar of Companies and those for 2010 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.
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