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12 Nov 2009 07:00
12th November 2009
FOR IMMEDIATE RELEASE
AGA RANGEMASTER GROUP PLC ("AGA RANGEMASTER") INTERIM MANAGEMENT STATEMENT
STRONG CASH POSITION AND BRIGHTER SALES OUTLOOK THIS AUTUMN
AGA Rangemaster, the consumer brands Group, today issues an interim management statement for the period from 30th June 2009.
Overview
The Group is in the key autumn sales period and following a quiet summer it has seen a seasonal upturn in activity. Order levels in key areas are above those of late 2008 and the first half of 2009 when the sharp decline in the housing market fed through to weak order intake. Order levels, however, continue to be below those of two years ago.
At the beginning of the financial year, the Group set a target of having more cash in the bank at the end of 2009 than the 5.8 million with which it started the year. The focus on cash management including working capital reductions means that this target will be exceeded.
The strong management action taken to improve overall operational efficiency has enabled the Group to deliver a resilient trading performance in tough consumer market conditions. Taking into account current order levels, management action, rationalisation costs and pension credits the Group expects to report a profit before tax in the second half of 2009.
William McGrath, Chief Executive commented: "An improving mood in the housing market and consumer enthusiasm for our core products is evident in the brighter sales outlook this autumn. We continue to invest in quality product as well as strong marketing initiatives to support our brands and generate sales whilst maintaining focus on costs and cash management."
Operational Review
Rangemaster, our best performing brand, now offers fridges, dishwashers and wine storage in addition to range cookers and sinks. Orders in the last ten weeks for Rangemaster, Falcon and the recently acquired Mercury brands, are up 15% against 2008 levels. Second half revenues for Rangemaster are now expected to be ahead of 2008 levels.
After a slow period in the summer, we have seen a more encouraging trend in orders for AGA and Rayburn cast iron cookers. Over the last ten weeks orders are now closer to 2008 levels with our lead indicators ahead year on year. Due to the weak first half we still anticipate sales to be down by over a quarter against full year 2008.
The new Ogilvy devised `AGA Season' advertising campaign designed to drive shop footfall was launched on 24th October supported by national press and radio advertising.
Rayburn sales of wood burning models continue to perform strongly. The new oil-fired 600 Series has been particularly well received by professional trade installers and home heating specialists and will give further support to overall Rayburn sales. Despite a good year for stoves, Stanley sales in Ireland will be significantly lower this year given the weakness in the Irish economy impacting consumer confidence.
Sales at AGA Marvel, the North American business, continue to be below those of 2008. The action taken to move to a new refrigeration factory in Greenville, Michigan, to reduce the cost base substantially means the business is trading around breakeven despite volumes being down 35%.
Fired Earth's orders are down in the last ten weeks and have yet to see a return to 2008 levels. Grange has seen some improvement in order levels in the last ten weeks. Fired Earth's move into fitted kitchen ranges was marked with the launch of the Moderne Collection designed by Charles Smallbone. Hand-made by Grange, utilising existing capacity in France, the collection will be taken to more Fired Earth and Grange outlets internationally in 2010.
The Group continues to focus on managing its cost base tightly as well as improving cash generation. The Group is progressing well with combining AGA and Rangemaster operations in the UK. This project will be completed by the first half of 2010 and will further position the Group to take advantage of the operational leverage inherent in the business as end markets improve and incremental sales are generated.
Enquiries:
William McGrath, Chief Executive, Aga Rangemaster Group plc - 01926 455731 Simon Sporborg/Charlotte Kenyon, Brunswick Group - 020 7404 5959
Notes to Editors:
A summation of the sales and marketing initiatives across the Group for the autumn is available on our website at www.agarangemaster.com.
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