17th March 2006
AGA FOODSERVICE GROUP PLC
2005 PRELIMINARY RESULTS
HIGHLIGHTS
Full year to 31st December 2005
2005 2004
Increase
�m �m %
Revenue 501.8 433.7 15.7
Operating profit 41.7 35.2 18.5
Profit before tax 43.0 36.3 18.5
Basic earnings per share 26.6p 22.9p 16.2
Dividend per share proposed 9.2p 8.3p 10.8
Shareholders' funds 298.7 275.6 8.4
Net cash 20.4 25.1
2005 Highlights:
* Strong revenue, profit and earnings growth.
* Continued growth in Consumer driven by Aga and Rangemaster, new products
(including the electric Aga) and international expansion (USA, Ireland and
France).
* Improved commercial appliance sales in Europe.
* Dividend increased by a further 10.8% to 9.2 pence - an increase of 84%
over five years reflecting the strong performance over that period.
2006 Outlook:
"This is a strong performance and the excellent earnings growth achieved in
2005 shows the strategy of the last five years has worked well. With new
products, strong routes to market and major commercial customers raising
investment levels, we believe there is considerable expansion potential
available to us."
William McGrath
Chief Executive
Enquiries:
William McGrath, Chief Executive 0207 404 5959 (today)
Shaun Smith, Finance Director 0121 711 6015 (thereafter)
Simon Sporborg, Brunswick 0207 404 5959
Aga Foodservice Group plc
2005 Preliminary Statement
CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENT
In 2005 we have produced another strong set of results and made good progress
in our objective of making Aga Foodservice a market leader in the premium
consumer and commercial cooker and refrigeration markets. The organic revenue
and profit growth was driven by good performances by Aga, Rangemaster, Aga
Bakery and Williams, our commercial refrigeration operation.
Over the last five years we have doubled sales and increased turnover, profits
and dividends each year. As importantly we have created a strong base for the
future through developing our existing products and distribution channels, as
well as acquiring further premium brands and international routes to market.
This product and geographical breadth is providing sound bases for our
businesses making them less dependent on economic cycles in particular markets.
This trend will continue as we now have firmly established market positions and
we expect to see further benefits of our investment programmes in 2006 and
beyond.
Our plan remains to expand our premium international cooker and appliance
operations and to be a world leading equipment supplier into the bakery and
foodservice industries given our product leadership positions in energy
efficiency and waste reduction.
Trading Performance
In 2005, revenues rose by 15.7% to �501.8 million and operating profits were up
18.5% to �41.7 million. The organic growth rates achieved for revenue and
operating profit were 5.2% and 13.4% respectively. Profit before tax was up
18.5% to �43.0 million. Profit after tax and earnings per share rose 17.8% and
16.2% respectively to �34.4 million and 26.6 pence. These good figures and a
balance sheet which showed net cash of �20.4 million at the year end enables us
to increase the dividend for the fifth year in a row to 9.2 pence per share -
an increase of 10.8% in the year and a cumulative increase of 84% over the last
five years.
The European consumer markets remain the heartland of the business, generating
42.9% of the total revenue. The UK markets were quiet but the strong new
product programmes and marketing campaigns for Aga and Rangemaster enabled us
to offset this while implementing our growth plans for international markets.
The Fired Earth operations saw sales fall as its core tile business proved
challenging in 2005. Fired Earth, particularly through its large inspirational
stores format, is now an integral part of our Aga retail formula and we have
taken decisive action to improve performance by cutting overhead costs and
focusing on new kitchen orientated product introductions.
The strong performance from the European foodservice operations, with revenue
up 14.1% and operating profits up 37.3%, was a particularly pleasing feature of
the year. Aga Bakery continues to increase market share in France and the UK,
it is also building a presence in Eastern European markets and for our US
operations. We benefited from the greater integration of our operations which
reduced operating costs and raised product breadth. We are delighted that in
the last year our fryers and fridges have received Government and industry
awards, notably for their energy saving characteristics. Aga Foodservice is
expanding from the already well-established platforms it has in the UK. We now
have widened packages available to enable this expansion.
In North America, performance was mixed. Our bakery operations progressed well
but our commercial refrigeration operations saw margins remain weak. Likewise,
on the consumer front, the refrigeration appliance business was strong but our
home fashions retail operations remained flat as consumer spending on furniture
was subdued. Overall, the US contributed 22.7% of total revenue and 11.3% of
operating profits. The bridgehead we have established in the USA in recent
years reinforced with new products provide the right bases on which to build
greater profitability.
Corporate Development
Over the last five years we have steadily built the overall business from
revenue of �200 million to �500 million and operating profit from �20.3 million
to �41.7 million by investing in products and by selectively acquiring
businesses which are not only strong in themselves, but also have the potential
to access product available from within the Group, bringing operational gearing
benefits to our manufacturing operations. This systematic approach to
development is itself creating new opportunities.
In 2005, we made several acquisitions, all of which we had followed for some
time; Waterford Stanley the Irish range cooker company; Heartland the
Ontario-based premium cooker and refrigeration operation; Divertimenti the
London-based high-end kitchenware business; and we acquired control of Grange -
all of which have well-established niche market positions, growth ambitions and
bring with them impressive market access for other Group products. In
Foodservice, the focus we have placed on energy efficiency and healthy cooking
is increasingly well understood and we have won a number of major awards, most
notably becoming Energy Star Partner of the Year under the US Federal
Government's energy conservation programme. We acquired the Stellar Steam
product line and since the year end we have acquired the German-based but
internationally established, Eloma - both steamer companies, which add to our
reputation for technical strength in the market place. Eloma adds appreciably
to our hot foodservice package now based on 6-burner ranges, fryers and
steamers. With cash resources to invest, we will sustain our development
approach while retaining the option to buy-back shares if market conditions
provide appropriate opportunities.
Current Trading and Outlook
The start of 2006 has seen a continuation of the themes well-established in
2005. In consumer the strength of our product offering reduces our
vulnerability to consumer market weakness in the UK and internationally we
expect to sustain top line momentum. Orders to date for Aga and Rangemaster
suggest another sound trading performance.
In Foodservice, Aga Bakery continues to gather momentum in traditional European
markets and our product range is now better known by the major supermarket
groups. With the expansion of our strong foodservice offering now including
refrigeration, fryers and steamers, we have the products to meet the needs of
commercial customers increasingly ready to look 'back of house' at cost,
efficiency, safety and waste reduction. Against this background, we see 2006 as
another year where our systematic approach to development will aid progress.
Over the last five years we have created a strong business based on premium
cookers and refrigeration and we are well positioned to continue the expansion
we have already seen.
V Cocker CBE W B McGrath
Chairman Chief Executive
17th March 2006
OPERATIONAL REVIEW - 2005 PRELIMINARY RESULTS FOR AGA FOODSERVICE GROUP PLC
We are pleased to say, revenue passed the �500 million milestone and was more
than double that of continuing operations in 2001 when the Group sold its Pipe
Systems operations. Profits have also doubled in that same period.
Consumer Operations (Revenue �284.8 million and operating profits �25.3
million)
2005 was another good year for our UK and European consumer operations.
Operating profits were �23.0 million on revenue of �215.2 million compared with
�19.6 million on revenue of �175.4 million in 2004 and �9.6 million on revenue
of �107.1 million in 2001, when we first set out our expansion plans. Organic
growth in 2005 accounted for 5.2% of revenue and 7.1% of operating profit
growth out of total growth of 22.7% and 17.3% respectively. The related US
operations progressed more slowly. Revenue was up 6.4% to �69.6 million and
operating profits rose 15.0% to �2.3 million with the refrigeration operations
performing well. Heartland, the Canadian range cooker and refrigeration
business acquired in December, did not significantly affect these numbers.
The cornerstones of our plans are:
* Product Development - 31% of Aga's revenue and 36% of Rangemaster's revenue
are from products introduced since 2001. At present the electric Aga ranges
and the 90cm Rangemaster cookers are key sources of growth.
* Geographical Expansion - international sales represent 32% of Aga and 12%
of Rangemaster sales compared with 26% and 8% in 2004 - and 8% and 6% in
2001.
* Retail Strength - with Aga and Fired Earth we have a chain of over 100
stores under Group fascias. The key to progress now is to raise the level
of sales per square foot from the 160,000 square feet available to us in
the UK where sales per square foot are �330. In the US we have 210,000
square feet available and sales per square foot are �200.
2005 consumer caution saw the overall UK market demand fall for free-standing
cookers. Against this background, Aga was able to increase unit sales of
branded cookers again, to over 12,000 - up 4.9% and Rangemaster saw cooker
sales rise by 6.4% to over 65,000. Raising volumes, given the operational
gearing of our manufacturing units is central to our success. At the same time,
growing sales of our related brands and products is now of considerable
importance. For example, cookware now represents over �6 million in sales, up
14% in the year. Similarly sinks and refrigerators are useful contributors and
are receiving further attention as we seek to drive sales through our own
retail and dealer outlets.
During the year, we benefited from key acquisitions for our consumer
operations. Waterford Stanley operates in the rapidly growing Irish market and
transforms our position in a market so well attuned to our product offerings of
cast iron cookers and stoves. Similarly, in France, La Cornue, a 2004
acquisition, provides an anchor and credibility for all our ranges being the
long established leader in premium cooking in France. La Cornue - now with new
designs made at Rangemaster - had a good year. Divertimenti, also part of
Rangemaster, epitomises quality in UK cookware and is the base for our
ambitions to be a multi-channel retailer in cookware for all our cookery brands
based on the expertise collectively available to us.
Our international development plans are now underpinned by real strength on the
ground. The potential derived from the acquisitions of La Cornue and Grange is
seen in our anchor 7,000 square foot store on Boulevard Haussmann in central
Paris where our key consumer brands are all on show. Likewise, with the
acquisition of Heartland, we now have a market leading position in Canada
through 200 dealers and also have excellent retail stores able to showcase Aga,
Heartland and Grange products in Montreal and Toronto.
In range cooking, we believe our expertise in cookery sets us apart. Whether
with radiated heat or with conventional cookers - our focus is on the premium
end of the market and the development of product features which is second to
none. As we are progressively moving into refrigeration, we have further
opportunities to educate the market on the virtues of wine cooler units, ice
makers and the European sector-changing drawer unit refrigerators.
We are now tying our overall kitchen offering more directly together through
ranges of free-standing kitchen furniture - led by our French country and
Shaker ranges, the latter based on the original American designs we acquired
last year. These quite outstanding pieces are made at Europe's premier
furniture factory at Grange in Lyon. They have real potential to set new
standards at mainstream prices through our Aga, Fired Earth and Domain outlets
as well as through Grange's 300 worldwide dealers.
In 2006 a considerable opportunity is to raise returns, using our own products,
from both Domain and Fired Earth's retail space. In 2005 these operations saw
overall sales fall by 1% and 5% respectively in tough home fashions markets. We
have the products and the onus on our higher margin, larger ticket items to
enable us to drive up the returns per square foot which remain among the best
in the respective sectors. In so doing, we have new Aga and Rangemaster
products and more Marvel refrigeration products to take to the market - hence
the optimism for 2006.
In 2006, we expect the electric Aga, the new Rangemaster and Falcon products
with their strong product features first shown to the industry at the major
trade show, "KBB" in Birmingham, and the Marvel drawer refrigerators as well as
the new free-standing Shaker furniture to have a considerable impact in
consumer markets.
Foodservice Operations (Revenue �217.0 million and operating profits �16.4
million)
Foodservice markets are recovering some of the growth rates last seen in the
mid 90's when quick service restaurant expansion was at its height. Foodservice
markets have been through cyclical lows and have become more price and
commodity driven. Now as commercial imperatives change and health, energy
efficiency and waste reduction become paramount the technology-led groups will
be clear winners. We are the international market leader in providing
specialist equipment to bakers at a time when our core values - 'choice, taste,
health, pleasure, bread' resonate so clearly with consumers. Similarly, in
prime cooking and refrigeration the technological edge we have developed brings
greater opportunities.
Our UK and European foodservice operations had an excellent year in 2005 with
sales up 14.1% and operating profits rising to �14.0 million from �10.2
million. In the USA our markets were more patchy. Sales were up 6.8% and
operating profits were down 7.7% (excluding an exceptional property sale in
2004), as increased costs caused margins to decline.
Internationally, the cornerstones of our strategy are:
* Product Development - with our premium bakery ranges, our high efficiency
refrigerators, our innovation in fryers and with the addition of steamers
and combi-steamers, we aim to be at the forefront in our chosen areas of
expertise.
* Geographical Expansion - the shift from producing for national to
international markets was a tough process but a critical phase for our
manufacturing operations. We have shown we can achieve it and expect now
further expansion.
* Major Account links - whether it is with UK based groups like Sainsbury's
and Tesco; the French-based artisan bakers; the US group Panera Bread or
the Ukranian chain Fozzy, we are well placed to address their need for
in-store bakeries.
There has been a growing recognition in the foodservice industry that it has
lagged behind in providing customers with efficient, innovative energy saving
products. The Infinity Fryer launched in 2004 brings energy and quality
benefits and the product is steadily gaining recognition. In 2005 it received
the Europe Award for Distinguished Development from the Foodservice Consultants
Society International 'FCSI'. Similarly, we were delighted to be recognised as
the US Government's energy saving scheme's 'Manufacturing Partner of the Year'
- a tremendous achievement for our Victory team as they were chosen from
entries across the spectrum of US manufacturing companies. We will press the
case that customers should specify products that are Energy Star listed.
We calculate that in the UK alone our new generation of equipment would cut
energy bills of commercial kitchens by �2.2 billion and would consequently cut
carbon emissions by 15 million tonnes, equivalent to 4.25% of the Government's
target for carbon emission reduction by 2050.
Quality, as well as eco-friendliness, is an important growth driver. The
Infinity Fryer helps maintain oil quality and keeps process contamination to a
minimum because of its built in filtration system. Our best bakery ovens cook
based on radiated heat like the Aga and provide best quality breads that have
made French bread world renowned. Further, we now have a world leading range of
combi-ovens (which combine convection cooking and steaming) and, like our
Stellar Steam ovens acquired in the US last year, are boilerless. This
dramatically cuts water usage at a time when 'thirsty' products are becoming a
real 'eco' concern. Our initiatives are making more efficient, healthy means of
cooking more readily available to a wider market.
In 2005, the particular factors which helped provide the stronger performance
were bakery expansion into Eastern Europe, where the number of new supermarket
openings is increasing rapidly and into the US where we have a complete range
of products now available to chains like caf� bakeries, supermarkets and to the
wider public sector market. Greater investment was made by major supermarket
accounts in the UK and there were larger contracts for the bakery market. These
trends should continue in 2006 and with our cohesive range of products we are
well placed to benefit internationally. We expect then that this widened
product range will enable us to address the weak performance of our low margin
commodity refrigeration operation, Victory in the USA, by adding more premium
products to leaven its overall product mix.
Financials
In 2005 we were once more able to combine organic growth with a programme of
acquisitions adding strength and depth to our core cookery-led operations.
Revenue of �501.8 million was up 15.7% from �433.7 million in 2004 and
operating profits were up 18.5% to �41.7 million and profit before tax was up
18.5% to �43.0 million from �36.3 million. Of the growth in revenue and
operating profits, organic growth rates were 5.2% and 13.4% respectively. These
figures are now on an IAS basis. Of our revenue 56.8% was generated from
consumer and 43.2% from foodservice and 53.3% was in the UK; 22.6% was in
Europe and 24.1% in North America and the rest of the world. This balance of
business is in line with the strategic objectives set in recent years to
replicate the strengths we have in niche UK operations and shows we are now
much more than a UK business. Indeed, of our 6,000 employees, 2,400 work
outside the UK.
The tax charge of �8.6 million was 20% of pre-tax profits - a rate we expect to
see increase only moderately this year, if at all. Earnings per share were 26.6
pence (2004: 22.9 pence). These figures are calculated on the basis of the
127.6 million average shares in issue during the year.
The board is pleased that, given the progress being made, it is able to raise
the full year dividends once again from 8.3 pence per share to 9.2 pence per
share, a 10.8% increase. This brings the overall dividend increase since it was
reset in 2001 to 84%.
Cash flow performance in the year was good and was particularly strong in the
second half with high investment in working capital in the first half
reversing. Working capital was �61.5 million at the year end, compared to �44.9
million at December 2004, primarily because of acquisitions, which accounted
for �8.1 million, exchange rates and overall business expansion. We continued
to invest in the business spending �10.6 million on capital equipment, compared
with �14.6 million in 2004. Depreciation was �9.8 million. We also capitalised
�2.7 million of development expenditure. Amortisation of previously capitalised
development expenditure was �1.5 million in the year.
We made a number of important acquisitions in the year and we were delighted to
acquire Waterford Stanley in June for �10.6 million. A long respected
competitor to Rayburn in cast iron cookers, it is a market leader in the
buoyant Irish market and brings an expertise in the stove market which will
help reignite our presence in the UK as we launch a stove range under the Aga
brand later this year. We acquired control of Grange which is now providing
products for our move into free-standing kitchen furniture. We acquired
Heartland in Canada for C$3 million which brings its own niche range and can
provide local market opportunities for our wider consumer offering in Canada
and the USA where Domain is to become a retail outlet for Heartland.
We have managed the move to IFRS well. The most noteworthy area that had to be
addressed was pensions. The deficit of �18.2 million, on assets of �750.6
million and appraised liabilities of �768.8 million, is now shown on the
balance sheet under IAS 19. Our scheme is large but we have been cautious for
some years in asset allocation and in managing the escalating costs of pensions
and we have a reasonably well-funded position based on mainstream assumptions
for a continuing scheme. Further, we expect a negligible charge to the income
statement in 2006 when full details of the actuarial valuation as at 31st
December 2005 are concluded. The Group continued to make a cash contribution to
the scheme of �4.9 million.
We still have a strong financial position with net cash at the year end of
�20.4 million (2004: �25.1 million). We expect to continue to make the type of
selective investments made in recent years whilst remaining alert to the
possibilities of share buy-backs to which market conditions can give rise.
We made good progress against our stated financial parameters in 2005. We
target a 10% return on sales from our manufacturing operations; we target a 15%
return on capital employed from the existing assets now combined with related
acquired operations. In proceeding with our strategy we continue to expect to
move to a geared balance sheet.
We have plans in place to drive top line growth and have the products available
and production capacity to support it. We will continue our investment
programmes which are designed to reduce vulnerability to market specific
cycles. Our priorities are to:
* Drive up retail returns per square foot.
* See our energy saving story translated into commercial sales.
* Ensure the efficiencies are delivered from our streamlined management
structures.
CONSOLIDATED INCOME STATEMENT
Year to 31st December 2005 2004
�m �m
Revenue 501.8 433.7
__________________________________________________________________________________
Group operating profit 41.7 35.2
Share of post tax result from associate 0.1 0.5
__________________________________________________________________________________
Profit before finance income and income tax 41.8 35.7
Finance income 2.3 1.4
Finance costs (1.1) (0.8)
__________________________________________________________________________________
Profit before income tax 43.0 36.3
Income tax expense (8.6) (7.1)
__________________________________________________________________________________
Profit for year 34.4 29.2
__________________________________________________________________________________
Profit attributable to equity shareholders 34.0 29.1
Profit attributable to minority shareholders 0.4 0.1
__________________________________________________________________________________
Profit for year 34.4 29.2
__________________________________________________________________________________
Earnings per share p p
Basic 26.6 22.9
Diluted 26.5 22.8
__________________________________________________________________________________
p p
Dividend per share paid 8.8 7.5
__________________________________________________________________________________
p p
Dividend per share proposed 9.2 8.3
__________________________________________________________________________________
The above results relate to continuing operations.
CONSOLIDATED BALANCE SHEET
As at 31st December 2005 2004
�m �m
Non-current assets
Goodwill 154.2 137.4
Intangible assets 19.1 8.8
Property, plant and equipment 85.3 77.2
Investments 0.3 6.5
Retirement benefit asset - 1.2
Deferred tax asset 11.3 5.6
__________________________________________________________________________________
270.2 236.7
__________________________________________________________________________________
Current assets
Inventories 89.4 70.2
Trade and other receivables 90.5 78.6
Cash and cash equivalents 55.4 49.8
__________________________________________________________________________________
235.3 198.6
__________________________________________________________________________________
Total assets 505.5 435.3
Current liabilities
Borrowings (2.1) (23.1)
Trade and other payables (117.5) (102.6)
Current tax liabilities (8.6) (2.1)
Current provisions (5.1) (4.3)
__________________________________________________________________________________
(133.3) (132.1)
__________________________________________________________________________________
Net current assets 102.0 66.5
__________________________________________________________________________________
Non-current liabilities
Borrowings (32.9) (1.6)
Other payables (0.8) (0.1)
Retirement benefit obligation (18.2) (7.8)
Deferred tax liabilities (7.6) (5.0)
Provisions (11.7) (12.9)
__________________________________________________________________________________
(71.2) (27.4)
__________________________________________________________________________________
Total liabilities (204.5) (159.5)
__________________________________________________________________________________
Net assets 301.0 275.8
__________________________________________________________________________________
Shareholders' equity
Share capital 32.1 31.5
Share premium account 65.8 60.9
Other reserves 38.3 31.5
Retained earnings 162.5 151.7
__________________________________________________________________________________
Total shareholders' funds 298.7 275.6
Minority interest in equity 2.3 0.2
__________________________________________________________________________________
Total equity 301.0 275.8
__________________________________________________________________________________
CONSOLIDATED CASH FLOW STATEMENT
Year to 31st December 2005 2004
�m �m
Cash flows from operating activities
Cash generated from operations 37.8 32.9
Finance income 2.3 1.4
Finance costs (1.0) (0.8)
Tax repayment / (payment) 1.2 (5.5)
___________________________________________________________________________________
Net cash generated from operating activities 40.3 28.0
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired (13.8) (4.6)
Purchase of property, plant and equipment (10.6) (14.2)
Expenditure on intangibles (3.2) (3.2)
Proceeds from disposal of property, plant and equipment 0.7 7.8
___________________________________________________________________________________
Net cash used in investing activities (26.9) (14.2)
___________________________________________________________________________________
Cash flows from financing activities
Dividends paid to shareholders (11.3) (9.6)
Net proceeds from issue of ordinary share capital 2.7 1.1
Repayment of / (loan) to associated undertaking 0.3 (0.3)
Purchase of own shares - (9.4)
Repayment of borrowings acquired with acquisitions (4.8) -
Finance lease (repayment) / inception (0.4) 0.1
Repayment of borrowings (3.8) (2.5)
New bank loans raised 9.1 4.8
___________________________________________________________________________________
Net cash used in financing activities (8.2) (15.8)
___________________________________________________________________________________
Effects of exchange rate changes 0.4 (0.2)
___________________________________________________________________________________
Net increase / (decrease) in cash and cash equivalents 5.6 (2.2)
Cash and cash equivalents at beginning of year 49.8 52.0
___________________________________________________________________________________
Cash and cash equivalents at end of year 55.4 49.8
___________________________________________________________________________________
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Year to 31st December 2005 2004
�m �m
Profit for year 34.4 29.2
___________________________________________________________________________________
Exchange adjustments on net investments 5.4 (3.4)
Realisation of property revaluation gains - 0.3
Cash flow hedges (0.1) -
Actuarial (losses) / gains on defined benefit pension schemes (17.5) 18.2
Deferred tax on items taken direct to reserves 5.3 (4.5)
___________________________________________________________________________________
Net (losses) / gains not recognised in income statement (6.9) 10.6
___________________________________________________________________________________
Total recognised income for year 27.5 39.8
___________________________________________________________________________________
Attributable to:
Equity shareholders 27.1 39.7
Minority interests 0.4 0.1
___________________________________________________________________________________
Total recognised income for the year 27.5 39.8
___________________________________________________________________________________
CONSOLIDATED CASHFLOW STATEMENT - RECONCILIATIONS
Reconciliation of operating profit to net cash inflow from operating activities
�m �m
Operating profit 41.7 35.2
Amortisation of intangibles 1.9 1.0
Depreciation 9.8 7.7
Profit on disposal of property, plant and equipment (0.2) (1.3)
(Increase) / decrease in inventories (4.9) (8.0)
(Increase) / decrease in receivables (4.1) (5.2)
Increase / (decrease) in payables (3.0) 6.8
Increase / (decrease) in provisions (3.4) (3.3)
____________________________________________________________________________________
Net cash inflow from operating activities 37.8 32.9
____________________________________________________________________________________
SEGMENTAL ANALYSIS
2005 2004
By primary segment - Operating Segment Segment Operating Segment Segment
business group Revenue profit assets liabilities Revenue profit assets liabilities
�m �m �m �m �m �m �m �m
UK & European Consumer 215.2 23.0 167.5 63.4 175.4 19.6 118.1 45.6
US Consumer 69.6 2.3 45.6 16.1 65.4 2.0 36.0 13.9
UK & European Foodservice 172.8 14.0 182.4 56.9 151.5 10.2 181.3 50.8
US Foodservice 44.2 2.4 42.9 9.4 41.4 3.4 36.8 7.7
_________________________________________________________________________________________________________
Total operations 501.8 41.7 438.4 145.8 433.7 35.2 372.2 118.0
Share of result of associate - 0.1 - - - 0.5 - -
Net finance income - 1.2 - - - 0.6 - -
_________________________________________________________________________________________________________
Total 501.8 43.0 438.4 145.8 433.7 36.3 372.2 118.0
Provision for businesses sold - - - 7.5 - - - 9.7
Tax - (8.6) 11.4 16.2 - (7.1) 6.8 7.1
Investments - - 0.3 - - - 6.5 -
Cash / borrowings - - 55.4 35.0 - - 49.8 24.7
_________________________________________________________________________________________________________
Total 501.8 34.4 505.5 204.5 433.7 29.2 435.3 159.5
_________________________________________________________________________________________________________
There are four main segments, as shown above: UK & European Consumer includes
the Aga, Rangemaster, Fired Earth and Grange brands operating mainly in the UK
and Europe. The US Consumer segment includes the Domain, Northland and Marvel
brands and operates mainly in North America. The UK & European Foodservice
segment includes the Falcon, Mono, Millers Vanguard and Williams brands
operating mainly in the UK and Bongard and Pavailler operating in Europe. US
Foodservice includes Adamatic, Belshaw and Victory brands operating mainly in
North America. All segments have similar customer bases, bringing together
operations selling into particular markets and working together to optimise
sales in those markets.
Revenue between UK & European and US Consumer was �2.7m (2004: �1.8m), revenue
between other business groups whilst growing is not material. Segment assets
include property, plant and equipment, intangibles, inventories and
receivables. Segment liabilities comprise operating payables, retirement
obligations and provisions. Cash, borrowings and taxation are not included in
the segments. Other external charges and income relating to corporate companies
are apportioned to the UK segments based on revenue.
2005 2004
Amortisation Impairment Impairment
By primary segment- Capital of of trade Capital Amortisation of trade
business group expenditure Depreciation intangibles receivables expenditure Depreciation of intangibles receivables
�m �m �m �m �m �m �m �m
UK & European Consumer 5.7 5.7 1.0 0.9 8.2 4.3 0.6 0.6
US Consumer 2.2 1.2 0.1 - 1.2 1.1 - 0.1
UK & European Foodservice 2.3 2.3 0.7 2.5 3.6 1.8 0.4 2.2
US Foodservice 0.4 0.6 0.1 0.1 1.2 0.5 - 0.3
______________________________________________________________________________________________________________________
Total 10.6 9.8 1.9 3.5 14.2 7.7 1.0 3.2
______________________________________________________________________________________________________________________
Impairment of goodwill was �nil.
SEGMENTAL ANALYSIS - CONTINUED
2005 2004
By secondary segment- Segment Capital Segment Capital
geographical origin Revenue assets expenditure Revenue assets expenditure
�m �m �m �m �m �m
United Kingdom 267.5 255.8 6.9 258.5 219.9 10.8
North America 113.4 88.5 2.6 106.8 73.7 2.4
Europe 113.4 86.8 1.1 63.3 75.0 1.0
Rest of World 7.5 7.3 - 5.1 3.6 -
____________________________________________________________________________________
Total operations 501.8 438.4 10.6 433.7 372.2 14.2
Tax - 11.4 - - 6.8 -
Investments - 0.3 - - 6.5 -
Cash - 55.4 - - 49.8 -
____________________________________________________________________________________
Total 501.8 505.5 10.6 433.7 435.3 14.2
____________________________________________________________________________________
Revenue by geographical destination 2005 2004
�m % �m %
United Kingdom 254.1 50.7 246.3 56.8
North America 118.1 23.5 107.9 24.9
Europe 106.4 21.2 63.6 14.6
Rest of World 23.2 4.6 15.9 3.7
__________________________________________________________________________________
Total 501.8 100.0 433.7 100.0
__________________________________________________________________________________
NOTES
1. Dividends
The Board are proposing a final dividend amounting to 6.2p per share (2004:
5.8p). An interim dividend of 3.0p per share (2004: 2.5p) has already been
paid, making the total dividend for the year 9.2p per share (2004: 8.3p). The
final dividend will be paid on 2nd June 2006 to shareholders registered on 28th
April 2006.
2. 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. The main currencies and exchange rates are:
Year to 31st December 2005 2004
Average
EUR 1.46 1.47
USD 1.83 1.83
Year end
EUR 1.46 1.41
USD 1.72 1.92
NOTES - CONTINUED
3. Income tax
2005 2004
�m �m
United Kingdom corporation tax based on a rate of 30% (2004: 30%):
Current tax on income for year 4.2 4.6
Adjustments in respect of prior years (1.6) (2.1)
__________________________________________________________________________________
United Kingdom corporation tax 2.6 2.5
Overseas current tax on income for year 3.9 2.6
__________________________________________________________________________________
Total current tax 6.5 5.1
__________________________________________________________________________________
United Kingdom deferred tax charge in year 2.9 2.1
Overseas deferred tax credit in year (0.8) (0.1)
__________________________________________________________________________________
Total deferred tax 2.1 2.0
__________________________________________________________________________________
Total United Kingdom tax 5.5 4.6
Total overseas tax 3.1 2.5
__________________________________________________________________________________
Total income tax 8.6 7.1
__________________________________________________________________________________
4. Earnings per share
2005 2004
�m �m
Earnings
Profit on ordinary activities after tax 34.4 29.2
Minority interests (0.4) (0.1)
__________________________________________________________________________________
Earnings - for basic and diluted EPS 34.0 29.1
__________________________________________________________________________________
Weighted average number of shares in issue million million
For basic EPS calculation 127.6 127.0
Dilutive effect of share options 0.8 0.6
__________________________________________________________________________________
For diluted EPS calculation 128.4 127.6
__________________________________________________________________________________
Earnings per share p p
Basic 26.6 22.9
Diluted 26.5 22.8
5. Events after Balance Sheet date
On 2nd February 2006 Eloma, the German based combi-oven maker, was acquired for
Euros 10.5m (�7.1m) in cash from the Gustatus Group. Eloma's revenue in 2005
was Euros 21m (�14.3m) and profit before interest and tax was Euros 0.7m
(�0.5m) on a proforma basis.
2006 financial calendar
Report and accounts posted 30th March 2006
Record date for final ordinary dividend 28th April 2006
Annual General Meeting 4th May 2006
Final ordinary dividend payable 2nd June 2006
2006 half year end 30th June 2006
The financial information set out in this announcement does not constitute the
Company's statutory accounts for the years ended 31st December 2005 and 2004
but is derived from those accounts. Statutory accounts for 2004 have been
delivered to the Registrar of Companies and those for 2005 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 237(2) or (3) of the Companies Act 1985.
END
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