Final Results
March 16 2007 - 3:00AM
UK Regulatory
16th March 2007
FOR IMMEDIATE RELEASE
AGA FOODSERVICE GROUP PLC
2006 PRELIMINARY RESULTS
HIGHLIGHTS
Full year to 31st December 2006
2006 2005 Increase
�m �m %
Continuing Operations
-Revenue 528.9 459.9 15.0
-Operating profit 47.7 41.4 15.2
-Profit before tax 46.0 42.7 7.7
-Basic earnings per share 28.7p 26.4p 8.7
Dividend per share 10.5p 9.2p 14.1
Special dividend proposed 43.0p -
Shareholders' funds 333.5 298.7
Net (debt) / cash (10.9) 20.4
* Good growth achieved by Aga, Rangemaster and Marvel our core consumer
brands.
* Continuing progress in foodservice with strong contributions from the
recently acquired Eloma and Amana businesses with energy and accelerated
cooking initiatives gaining customer recognition.
* Aga Foodervice Inc named US Energy Star Partner of the Year by US
Environmental Protection Agency.
* Strong finances enable 50 pence dividend (including 43 pence special
dividend and 7 pence final dividend) to be paid at a cost of �65 million.
* Decision to sell loss making Domain Home - treated as discontinued.
* Good order intake underpins confidence in current trading.
"We have strong brands and market positions. We have the ideas and resources to
develop them further as well as increasing shareholder returns with a special
dividend. We remain committed to driving innovation and structural change in
the foodservice sector."
William McGrath
Chief Executive
Enquiries:
William McGrath, Chief Executive 0207 404 5959 (today)
Shaun Smith, Finance Director 0121 711 6015 (thereafter)
Simon Sporborg/Nina Coad, Brunswick 0207 404 5959
Aga Foodservice Group plc
2006 Preliminary Statement
CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENT
Aga Foodservice is the Group that equips the world's best kitchens. We are
pleased that in 2006 we achieved another good set of results which helped make
us a market leader in the premium consumer and commercial cooker and
refrigeration markets. Encouragingly, core businesses like Aga and Rangemaster
and our international bakery and refrigeration activities performed well.
Our vision encompasses the world's best kitchens be they in your home or where
you eat out. Our aim is to continue to expand our premium brands and to be a
world leading supplier into the bakery and refrigeration markets where we have
sector leading products for changing markets. We have invested heavily in
recent years in products and acquisitions. We have worked to make our business
less cyclical and dependent on narrow markets. This trend will continue. We
embrace enthusiastically the sustainability agenda covering energy efficiency
and waste reduction. We believe that our strategy developed in recent years
will continue to generate attractive returns for shareholders.
Trading performance - continuing operations
In 2006 revenue rose by 15.0% to �528.9 million of which organic growth was
over 5.0%. Operating profits were up 15.2% to �47.7 million. The loss made by
Domain Home is shown under discontinued operations. Profit before tax was up
7.7% to �46.0 million. Profit after tax and earnings per share rose 8.5% and
8.7% respectively to �37.0 million and 28.7 pence. These good figures and a
balance sheet which showed a small debt level of �10.9 million at the year end
enables us to recommend an increase to the dividend for the sixth year in a row
to 10.5 pence per share - an overall increase of 110% in that period - and to
announce a special dividend of 43 pence per share. Since the disposal of pipe
systems we have returned �125.5 million to shareholders whilst the market value
of the company has increased from �250 million to over �525 million.
The UK and European consumer markets remain the heartland of the business
generating 46.0% of total revenues. Whilst UK markets were mixed during the
year strong new product introductions and marketing campaigns for Aga and
Rangemaster in particular enabled us to make continued progress while growth
came through more strongly in continental markets. All of our brands performed
particularly well in Ireland which is now firmly established as a core business
area. Revenues fell at Fired Earth as we switched from soft furnishings to
higher-margin kitchen furniture although prospects have steadily improved there
as the process of integrating Fired Earth into Aga was completed.
There was a strong performance from the European foodservice operations in 2006
with revenue up 12.7% and operating profits up 28.6% (11.4% excluding the
Williams property disposal profit). Aga Bakery continued its expansion outside
its home markets of the UK and France into Eastern Europe and the US.
Similarly, in refrigeration, Aga Foodservice is expanding from the
well-established platform we have in the UK and is trading well in Australia
and China.
In North America, markets remained mixed. In the consumer markets we have
developed a strong team incorporating Marvel, Aga Ranges and Heartland, our
2005 acquisition in Canada. Marvel, the refrigeration appliance business, is
well established in its markets and grew strongly. We invested in our North
American cooking operations to build further market recognition which held back
their results. Otherwise, in foodservice, during the first half we incurred a
cost of �0.8 million to reorganise our bakery operations to better position
them for the next phase of growth. The acquisition of Amana, the microwave
business, in September strengthened our operations materially, opening up new
major account opportunities. Overall, the US contributed 17.2% of revenue and
9.6% of operating profits.
Corporate development
We have steadily grown the overall business over the last six years by
investing in our products and by making acquisitions of businesses both strong
in themselves, and using cross-selling initiatives which could bring
operational gearing benefits to the Group as a whole. This strategy has worked
well and is continuing to create opportunities. Aga is iconic and our consumer
brands are outstanding; their value and potential is at the heart of our
thinking. As we strengthen them further by investment, we see ever greater
opportunities to grow them - primarily organically. Where we have less
intrinsic strength and where we are active in markets undergoing structural
changes reducing profitability, decisive action is needed. This applies in the
case of Domain where a strong franchise is being impacted by a weak market and
changing sourcing patterns. In December the board concluded a review of the
business with the assistance of Ernst & Young Orenda and initiated its sale. As
a result it is being shown as a discontinued operation in these results.
In foodservice we see a sector where the pace of change is accelerating because
our customers need quality food faster and are starting to realise that for too
long equipment has been inefficient. We are already well placed to benefit
because of our strong product offering and established market positions. Our
proposals for 'increasing efficiency in the commercial kitchen' highlight the
contribution this sector can make to address environmental imperatives.
Government, lobby groups, manufacturers and caterers themselves are putting
efficiency high on their agendas. We are delighted that Aga Foodservice Inc has
been named 2007 Energy Star Partner of the Year by the US Federal Environmental
Protection Agency.
During 2006 we approached Enodis, a UK quoted foodservice operation, primarily
operating in the US. We believed that there was an opportunity to create a
clear international leader in a sector which should consolidate and in
geographical, product and financial grounds value would be created. We remain
committed to driving structural change in the sector and seeking the best way
to achieve it in the interest of our shareholders.
Our strong balance sheet and good cash flows mean that we can return cash to
shareholders as part of the process of establishing a sound long-term debt/
equity structure. We are proposing a special dividend of 43 pence per share,
bringing the total dividend payable in June 2007 to 50 pence per share. This
leaves flexibility as we consider further acquisitions and a share buy-back
programme. We also have flexibility to buy-back up to 10% of the shares in the
market given our longer-term gearing target of 2 times net debt to EBITDA.
Current trading and outlook
The start of 2007 has seen a continuation of the trends seen in the second half
of 2006. The strength of our UK product offering and the positions we have
created internationally is providing momentum. The mixture of product
introductions, larger account wins and steady underlying markets provides
confidence. Lead indicators and order books are positive. Against this
background, we see 2007 as another year of progress.
V Cocker CBE W B McGrath
Chairman Chief Executive
16th March 2007
OPERATIONAL REVIEW - 2006 PRELIMINARY RESULTS FOR AGA FOODSERVICE GROUP PLC
UK and European Consumer (Revenue �243.1 million and operating profits �25.1
million)
Our UK and European consumer operations had another good year. Revenue rose
13.0% to �243.1 million and operating profits rose 9.1% to �25.1 million. We
have added greater flexibility to our range of cast iron cookers through fuel
types and design and continue to win new converts to radiated heat cooking.
Sales of the electric Aga and 3 and 4-oven models grew as the trend towards our
larger models continued. In 2006 the wood burning Rayburn and Stanley models
saw marked revivals. We see sales of 20,000 cast iron cookers sold under our
three brands as a base point on which to build substantially. Of these cookers
62% are sold in the UK, 30% in Ireland and the remainder primarily in Northern
Europe and the East Coast of the USA.
The link between Aga and Fired Earth for paint and tiles and kitchen furniture
supplied by Grange continues to develop. Fired Earth has shifted from soft
furnishings towards kitchen and bathroom furniture and the benefits of the
repositioning are starting to be seen. The new catalogue and roll outs of Fired
Earth branded paints in two major DIY chains will provide a boost this year.
Our brands have distinctive selling processes linked to events and
demonstrations. This will prove important in our major current initiative to
highlight to existing customers the benefits in look, efficiency and
functionality of our modern ranges as we offer upgrade options to them. In
addition, new products like the high efficiency Rayburn and the Stanley Supreme
are expected to sell strongly this year. The number of home surveys - a good
sales lead indicator - so far this year is up significantly on last year,
providing confidence that we will see a rise in revenues this year.
Rangemaster's success continues. In 2006 we sold over 70,000 cookers, up 7.6%
in the year. The 90cm ranges account for 49% of sales (47% in 2005) and over
18% (14% in 2005) are exported - with Ireland and France growing particularly
quickly. The high levels of functionality available, with our hobs and our
three or four ovens, mean we can offer impressive flexibility alongside value.
As we develop the business we are making Rangemaster a highly distinctive
overall kitchen brand incorporating fridges as well as sinks. We expect this
trend to continue. Rangemaster, as a manufacturing centre, is also now
supplying products to widen our Falcon, Aga, Heartland and La Cornue offerings
worldwide. During the year we expanded successfully through Divertimenti, our
multi-channel cookware operation which has two London retail outlets. The
reported numbers also include the �0.8 million cost of our exit from the AFE
Online business. La Cornue - notably in the USA where it is the only cooker in
Williams-Sonoma stores - is performing well. Orders year to date are running 8%
up. We can build on this as new lines become available, such as via innovation,
combining the advantages of range cookers and built-ins and adding induction
hobs to the Falcon range.
UK and European Foodservice (Revenue �194.8 million and operating profits �18.0
million)
Our UK and European foodservice operations had a good year. Revenues grew 12.7%
to �194.8 million and operating profits rose 28.6% to �18.0 million.
The UK foodservice market is yet to see the investment in equipment at a level
to support the underlying growth in eating out and the need to cut energy
consumption translated into materially greater demand. Against that background,
the impact of major individual projects remains significant to performance. In
2006 we benefited from sports projects including Wembley Stadium and the new
Ascot racecourse grandstand. Our largest contract was with the Prison Service
to which we have provided both equipment and ongoing service support under a
long-term maintenance agreement for a major asset renewal programme. At the
start of 2007 we are again working closely with the Prison Service as well as
on some large pub chain roll out programmes. We are also supplying a wide range
of equipment to the Whole Food Markets for its flagship store in Kensington. It
has bakery, refrigeration and prime cooking equipment. We have also launched
Infinity II an update of our deep fat fryer which without in-built filtration
provides a lower cost option whilst still achieving the oil savings from the
burner system.
Eloma, our German combi-oven manufacturer acquired in February 2006, accounted
for �14.1 million of revenues and contributed �1.3 million in operating profit.
Its prospects are excellent internationally.
Eloma has technically strong products and its most recent introductions, the
Compact six tray and Genius Touch self cooking programmes, are within that
tradition. We have added a sharper sales edge. The Eloma 'hot spot' tray
accessory provides a major patented product differentiator which will generate
a significant new customer base particularly at the 'smaller table top' end of
the market, where our Amana microwave operation is already strong.
In Bakery our European operations continued to make good progress, notably in
Eastern Europe, where Poland, Russia and the Ukraine account for 16% of sales.
The trend is being driven by the rise of in-store bakeries in supermarkets as
was seen in Western Europe some years ago. In addition, we are seeing the
growth across our markets of caf� bakeries in which our convection ovens and
fridges are central. We have reinforced our position with the artisan bakers
this year with the launch of the Paneotrad, a moulder / divider which cuts
production time by two hours or a quarter of the total time with commensurate
water, energy and labour savings. We expect it to become in time a standard
piece of equipment globally.
Our major markets remain France and the UK and while these are relatively
mature they continue to provide sound platforms for our manufacturing
operations working with leading companies like Sainsbury's, Marks & Spencer,
Somerfield, Auchan and Carrefour.
Order intake in the year to date is running 7% ahead of the prior year and a
good 2007 is expected.
US Foodservice Operations (Revenue �55.5 million and operating profits �3.2
million)
At the start of 2006 we focussed our manufacturing-led operations on ensuring
that our efficiencies, sourcing capabilities and management product expertise
was applied across the operations. This has worked well. A highlight of the
year was the acquisition of Amana Commercial Microwaves from Whirlpool for $49
million (�26.1 million). Amana is the well-established leader in its
marketplace, selling to a wide customer base in the USA with major chains like
McDonalds, KFC and Burger King and with a strong international business. In
2006 it contributed �1.8 million on revenues of �9.2 million after the date of
acquisition. We are currently investing in a new production facility close to
the existing Whirlpool factory where Amana products are produced and in two
major new product lines, which will confirm its market leading position after
their launch within the next twelve months.
In our established foodservice businesses, revenue growth helped raise profits
although these remained below the Group average and our targets. We are making
good headway with the US buying groups and chains with our hot offering of
Amana, Eloma combis, the Infinity fryer and Stellar Steam, which represents a
materially better product offering than ever before.
In Aga Bakery in the USA our doughnut equipment operation, Belshaw, continues
to perform particularly well as it supports the continuing expansion of Dunkin'
Donuts and WalMart. We have integrated the management of Adamatic with Belshaw,
whose roll lines for bakeries have much in common with some Belshaw lines.
After a difficult period for Adamatic caused by weak market conditions and the
need to rationalise our lines and cut costs which reduced profits by �0.8
million in the year, the business is starting to recover.
US Consumer (Revenue �35.5 million and operating profits �1.4 million)
In consumer markets our Marvel business performed particularly well through its
wine cabinet and ice maker business to which it has successfully added drawer
units. With the amount of refrigeration increasing both inside the house and
outside, in the 'kitchen in the garden', the market is buoyant. We supply
product to Viking, a major in upscale US appliances, and this business was
strong throughout the year. With a new generation of product underway with new
electronic controllers and dual temperature zones, the prospects are good. Our
cooker business continued to gain recognition. Aga is now a well known brand
and we look to our owned and dealer structure to accelerate the growth rate -
as we do for Heartland in Canada, where Aga and Rangemaster sourced
products are now coming to market to supplement its own established lines.
Domain in contrast was operating in a long running, severe consumer downturn
for soft furnishings and its revenues were down 7.4% - typical of the market.
This resulted in a �2.9 million operating loss, including costs for
reorganisation and stock clearances, in spite of hard work on merchandising and
sourcing and on expansion of the Aga led retail space. We have also written
down the net assets by �3.0 million. This makes the discontinued loss �5.9
million. As previously stated, the board concluded a review of the business
with the assistance of Ernst & Young Orenda and has initiated its sale.
Financials
2006 was a further year in which our well established development plans for the
Group saw us make progress both organically and through acquisitions.
Revenue from continuing operations of �528.9 million (2005: �459.9 million) was
up 15.0% on 2005 whilst operating profits from continuing operations of �47.7
million, before non-recurring items, were up 15.2%. Profit before taxation from
continuing operations was up 7.7% to �46.0 million (2005: �42.7 million).
Return on sales was 9%. We have set ourselves the target to drive the return on
sales to 10% over the next two years.
Consumer revenues were �278.6 million and accounted for 52.7% of the total
whilst foodservice revenues represented the other 47.3%.
The Group continues to expand internationally with the UK representing 49.2%
(2005: 55.3%) of the total, Europe 26.9% (2005: 23.1%) and North America 18.7%
(2005: 16.6%).
The tax charge was �9.0 million in the period and represented 19.6% of the
pre-tax profits - a rate we expect to rise only modestly this year. As
anticipated cash tax paid was �8.5 million (2005: �1.2 million repayment).
Earnings per share from continuing operations were 28.7 pence (2005: 26.4
pence) calculated on the average number of shares in issue during the year. The
board, having considered the progress made by the Group, is proposing a 14.1%
increase in the full year dividend, raising it from 9.2 pence to 10.5 pence per
share. This means the dividend paid has now more than doubled since 2001. Over
the same period the share price has risen from 216 pence at the end of 2001 to
reach an all time high of 434 pence on 28th December 2006 giving the Group a
market capitalisation of �560 million. The share price rose a third in 2006.
Our strong financial position provides scope to return more cash to
shareholders. The board is therefore, proposing a special dividend of 43.0
pence per share. It is also proposing a share consolidation which will allow
the share price performance before and after the return to be more easily
compared. The special dividend will be proposed as an ordinary resolution at
the AGM and is expected to be paid on 1st June along with the 2006 final
dividend. A circular will shortly be sent to shareholders detailing the
proposed return and the consolidation.
Operating cashflow performance in the year was similar to last year with an
operating profit from continuing operations conversion rate of 85%. Working
capital was �71.6 million (2005: �61.5 million) at the year end - acquired
companies representing �7.3 million of the increase.
Net capital expenditure in the year was �14.0 million. We spent �14.5 million
(2005: �10.6 million) on capital equipment which compares to depreciation of
�11.1 million (2005: �9.8 million). Of this investment, �3.5 million was on a
new facility for Waterford Stanley and �0.3 million was the down payment on a
new facility extension for Williams Refrigeration in King's Lynn which will
cost �1.3 million in total. We also purchased Marvel's Richmond, Indiana site
for �1.5 million. Our investment programme continues to help underpin future
growth. We also capitalised �4.1 million of intangible expenditure (2005: �3.2
million) and amortised �2.5 million (2005: �1.9 million).
We made two foodservice acquisitions in the year; Eloma, the German combi-oven
manufacturer in February for �7.8 million and Amana, the market leading
commercial microwave oven business for �26.1 million in September. Both
businesses have integrated well and contributed in total revenues of �23.3
million and profits of �3.1 million.
We continue to focus attention on our pension schemes. A formal actuarial
valuation by Watson Wyatt, the scheme actuaries, was concluded during the year.
This showed an actuarial deficit of �4.8 million at 31st December 2005. At 31st
December 2006, the scheme was showing a surplus under IAS 19 of �24.4 million
(2005: deficit �18.2 million) on assets of �784.6 million (2005: �750.6
million) and appraised liabilities of �760.2 million (2005: �768.8 million).
Movements in bond yields and actual experience being better than model
expectations accounted for the improvements. The cash contribution for current
employees was �5.8 million (2005: �4.9 million). This includes an additional
�1.0 million contribution towards making good the actuarial deficit. A payment
of �4.0 million to pay off the actuarial deficit will be made in 2007. The
current service cost of �6.9 million in 2006 was offset under IAS 19 by the net
return on the assets / liabilities of the scheme. The income statement included
a �3.8 million credit (2005: �1.5 million) for pensions. In 2007 the net return
on scheme assets / liabilities is expected to exceed the current service cost
by around �3 million.
The Group ended the year with net debt of �10.9 million (2005: cash �20.4
million).
CONSOLIDATED INCOME STATEMENT
Year to 31st December 2006 2005
�m �m
Continuing operations
Revenue 528.9 459.9
Net operating costs (481.2) (418.5)
________________________________________________________________________________
Group operating profit 47.7 41.4
Non-recurring cost (1.0) -
Share of post tax result from associate - 0.1
________________________________________________________________________________
Profit before net finance costs and income tax 46.7 41.5
Finance income 1.3 2.3
Finance costs (2.0) (1.1)
________________________________________________________________________________
Profit before income tax 46.0 42.7
Income tax expense (9.0) (8.6)
________________________________________________________________________________
Profit for year from continuing operations 37.0 34.1
________________________________________________________________________________
Discontinued operation
Post tax (loss) / profit from discontinued operation (5.9) 0.3
________________________________________________________________________________
Profit for year 31.1 34.4
________________________________________________________________________________
Profit attributable to equity shareholders 31.1 34.0
Profit attributable to minority shareholders - 0.4
________________________________________________________________________________
Profit for year 31.1 34.4
________________________________________________________________________________
Earnings per share - continuing operations p p
Basic 28.7 26.4
Diluted 28.5 26.3
Earnings per share - total operations p p
Basic 24.1 26.6
Diluted 23.9 26.5
________________________________________________________________________________
p p
Dividend per share 10.5 9.2
________________________________________________________________________________
CONSOLIDATED BALANCE SHEET
As at 31st December 2006 2005
�m �m
Non-current assets
Goodwill 166.0 154.2
Intangible assets 29.1 19.1
Property, plant and equipment 85.7 85.3
Investments in associates 0.3 0.3
Retirement benefit surplus 29.9 -
Deferred tax assets 6.5 11.3
________________________________________________________________________________
317.5 270.2
________________________________________________________________________________
Current assets
Inventories 94.8 89.4
Trade and other receivables 93.0 90.4
Current tax assets 7.2 0.1
Cash and cash equivalents 43.2 55.4
________________________________________________________________________________
238.2 235.3
Assets held for sale 8.1 -
________________________________________________________________________________
Total assets 563.8 505.5
Current liabilities
Borrowings (2.4) (2.1)
Trade and other payables (115.2) (117.5)
Current tax liabilities (14.4) (8.6)
Current provisions (5.4) (5.1)
________________________________________________________________________________
(137.4) (133.3)
________________________________________________________________________________
Net current assets 100.8 102.0
________________________________________________________________________________
Non-current liabilities
Borrowings (51.7) (32.9)
Other payables (1.0) (0.8)
Retirement benefit obligations (5.5) (18.2)
Deferred tax liabilities (14.6) (7.6)
Provisions (10.1) (11.7)
________________________________________________________________________________
(82.9) (71.2)
Liabilities held for sale (8.1) -
________________________________________________________________________________
Total liabilities (228.4) (204.5)
________________________________________________________________________________
Net assets 335.4 301.0
________________________________________________________________________________
Shareholders' equity
Share capital 32.3 32.1
Share premium account 67.8 65.8
Other reserves 28.5 38.3
Retained earnings 204.9 162.5
________________________________________________________________________________
Shareholders' equity 333.5 298.7
Minority interest in equity 1.9 2.3
________________________________________________________________________________
Total equity 335.4 301.0
________________________________________________________________________________
CONSOLIDATED CASH FLOW STATEMENT
Year to 31st December 2006 2005
�m �m
Cash flows from operating activities
Cash generated from operations 38.3 37.8
Finance income 1.3 2.3
Finance costs (1.8) (1.0)
Tax (payment) / repayment (8.5) 1.2
________________________________________________________________________________
Net cash generated from operating activities 29.3 40.3
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired (31.8) (13.8)
Purchase of property, plant and equipment (14.5) (10.6)
Expenditure on intangibles (4.1) (3.2)
Proceeds from disposal of property, plant and equipment and 4.6 0.7
intangibles
________________________________________________________________________________
Net cash used in investing activities (45.8) (26.9)
________________________________________________________________________________
Cash flows from financing activities
Dividends paid to shareholders (12.5) (11.3)
Net proceeds from issue of ordinary share capital 2.2 2.7
Repayment of loan to associated undertaking - 0.3
Repayment of borrowings acquired with acquisitions (3.0) (4.8)
Finance lease repayment (1.8) (0.4)
Repayment of borrowings - (3.8)
New bank loans raised 21.6 9.1
________________________________________________________________________________
Net cash used in financing activities 6.5 (8.2)
________________________________________________________________________________
Effects of exchange rate changes (2.2) 0.4
________________________________________________________________________________
Net (decrease) / increase in cash and cash equivalents (12.2) 5.6
Cash and cash equivalents at beginning of year 55.4 49.8
________________________________________________________________________________
Cash and cash equivalents at end of year 43.2 55.4
________________________________________________________________________________
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Year to 31st December 2006 2005
�m �m
Profit for year 31.1 34.4
________________________________________________________________________________
Exchange adjustments on net investments (9.8) 5.4
Cash flow hedges - (0.1)
Actuarial gains / (losses) on defined benefit pension schemes 33.3 (17.5)
Deferred tax on items taken direct to reserves (9.9) 5.3
________________________________________________________________________________
Net gains / (losses) not recognised in income statement 13.6 (6.9)
________________________________________________________________________________
Total recognised income for year 44.7 27.5
________________________________________________________________________________
Attributable to:
Equity shareholders 44.7 27.1
Minority interests - 0.4
________________________________________________________________________________
Total recognised income for the year 44.7 27.5
________________________________________________________________________________
CONSOLIDATED CASHFLOW STATEMENT - RECONCILIATION
Reconciliation of operating profit to cash flows from operating activities
�m �m
Operating profit - continuing operations 47.7 41.4
(Loss) / profit - discontinued operations (5.9) 0.3
Non-recurring cost (1.0) -
Amortisation of intangibles 2.5 1.9
Fair value adjustment of assets held for sale 3.0 -
Depreciation 11.1 9.8
Profit on disposal of property, plant and equipment (2.4) (0.2)
Increase in inventories (8.6) (4.9)
Increase in receivables (10.5) (4.1)
Increase / (decrease) in payables 6.1 (3.0)
Decrease in provisions (3.7) (3.4)
________________________________________________________________________________
Cash flows from operating activities 38.3 37.8
________________________________________________________________________________
SEGMENTAL ANALYSIS
2006 2005
By primary segment - Revenue Operating Segment Segment Revenue Operating Segment Segment
business group profit assets liabilities profit assets liabilities
�m �m �m �m �m �m �m �m
UK & European Consumer 243.1 25.1 192.3 62.3 215.2 23.0 167.5 63.4
US Consumer 35.5 1.4 32.0 6.5 27.7 2.0 31.5 6.1
UK & European Foodservice 194.8 18.0 208.5 50.8 172.8 14.0 182.4 56.9
US Foodservice 55.5 3.2 65.7 12.1 44.2 2.4 42.9 9.4
______________________________________________________________________________________________________
Total continuing operations 528.9 47.7 498.5 131.7 459.9 41.4 424.3 135.8
Discontinued operation 38.8 (5.9) 8.1 8.1 41.9 0.3 14.1 10.0
Non-recurring cost - (1.0) - - - - - -
Share of result of associate - - - - - 0.1 - -
Net finance income - (0.7) - - - 1.2 - -
______________________________________________________________________________________________________
Total 567.7 40.1 506.6 139.8 501.8 43.0 438.4 145.8
Provision for businesses sold - - - 5.5 - - - 7.5
Tax - (9.0) 13.7 29.0 - (8.6) 11.4 16.2
Investments - - 0.3 - - - 0.3 -
Cash / borrowings - - 43.2 54.1 - - 55.4 35.0
______________________________________________________________________________________________________
Total 567.7 31.1 563.8 228.4 501.8 34.4 505.5 204.5
______________________________________________________________________________________________________
There are four main segments, as shown above: UK & European Consumer includes
the Aga, Rangemaster, Fired Earth, Waterford Stanley and Grange brands
operating mainly in the UK and Europe. The US Consumer segment includes the Aga
Ranges, Heartland 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, Eloma, and
Pavailler operating in Europe. US Foodservice includes Adamatic, Amana, 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. The discontinued
operation relates to the soft furnishings line of the business at Domain.
Revenue between UK & European and US Consumer was �6.3m (2005: �2.7m). 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.
2006 2005
Amortisation Amortisation
By primary segment - Capital of Capital of
business group expenditure Depreciation intangibles expenditure Depreciation intangibles
�m �m �m �m �m �m
UK & European Consumer 11.6 6.5 1.3 7.3 5.7 1.0
US Consumer 2.6 0.5 0.1 1.5 0.3 0.1
UK & European Foodservice 3.0 2.5 1.0 3.2 2.3 0.7
US Foodservice 0.8 0.7 0.1 0.6 0.6 0.1
_____________________________________________________________________________________________________
Total continuing operations 18.0 10.2 2.5 12.6 8.9 1.9
Discontinued operations 0.6 0.9 - 1.2 0.9 -
_____________________________________________________________________________________________________
Total operations 18.6 11.1 2.5 13.8 9.8 1.9
_____________________________________________________________________________________________________
2006 2005
By secondary segment - Segment Capital Segment Capital
geographical origin Revenue assets expenditure Revenue assets expenditure
�m �m �m �m �m �m
United Kingdom 274.9 258.3 8.4 267.5 225.3 8.7
North America 93.1 99.7 3.4 71.5 72.7 2.2
Europe 147.2 132.3 6.2 113.4 119.0 1.7
Rest of World 13.7 8.2 - 7.5 7.3 -
_____________________________________________________________________________________________________
Total continuing operations 528.9 498.5 18.0 459.9 424.3 12.6
Discontinued operation 38.8 8.1 0.6 41.9 14.1 1.2
Tax - 13.7 - - 11.4 -
Investments - 0.3 - - 0.3 -
Cash - 43.2 - - 55.4 -
_____________________________________________________________________________________________________
Total 567.7 563.8 18.6 501.8 505.5 13.8
_____________________________________________________________________________________________________
Revenue by geographical destination 2006 2005
�m % �m %
United Kingdom 260.3 45.9 254.1 50.6
North America 98.8 17.4 76.2 15.2
Europe 142.1 25.0 106.4 21.2
Rest of World 27.7 4.9 23.2 4.7
________________________________________________________________________________
Total continuing operations 528.9 93.2 459.9 91.7
Discontinued operations 38.8 6.8 41.9 8.3
________________________________________________________________________________
Total operations 567.7 100.0 501.8 100.0
________________________________________________________________________________
NOTES
1. Dividends
The Board are proposing a final dividend amounting to 7.0p per share (2005:
6.2p). An interim dividend of 3.5p per share (2005: 3.0p) has already been
paid, making the total dividend for the year 10.5p per share (2005: 9.2p). The
final ordinary dividend will be paid on 1st June 2007 to shareholders
registered on 27th April 2007.
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 2006 2005
Average
EUR 1.47 1.46
USD 1.84 1.83
Year end
EUR 1.48 1.46
USD 1.96 1.72
3. Income tax
2006 2005
�m �m
United Kingdom corporation tax based on a rate of 30%
(2005: 30%):
Current tax on income for year 2.4 4.2
Adjustments in respect of prior years 0.7 (1.6)
________________________________________________________________________________
United Kingdom corporation tax 3.1 2.6
Overseas current tax on income for year 4.3 3.9
________________________________________________________________________________
Total current tax 7.4 6.5
________________________________________________________________________________
United Kingdom deferred tax charge in year 2.2 2.9
Overseas deferred tax credit in year (0.6) (0.8)
________________________________________________________________________________
Total deferred tax 1.6 2.1
________________________________________________________________________________
Total United Kingdom tax 5.3 5.5
Total overseas tax 3.7 3.1
________________________________________________________________________________
Total income tax 9.0 8.6
________________________________________________________________________________
4. Earnings per share
2006 2005
�m �m
Earnings
Profit for year from continuing operations 37.0 34.1
Minority interests - (0.4)
________________________________________________________________________________
Earnings from continuing operations - for basic & diluted EPS 37.0 33.7
(Loss) / profit from discontinued operations (5.9) 0.3
________________________________________________________________________________
Profit for period 31.1 34.0
_________________________________________________________________________________
Weighted average number of shares in issue million million
For basic EPS calculation 128.9 127.6
Dilutive effect of share options 1.1 0.8
________________________________________________________________________________
For diluted EPS calculation 130.0 128.4
________________________________________________________________________________
Earnings per share p p
Continuing operations
Basic 28.7 26.4
Diluted 28.5 26.3
________________________________________________________________________________
Discontinued operations
Basic (4.6) 0.2
Diluted (4.6) 0.2
________________________________________________________________________________
Total operations
Basic 24.1 26.6
Diluted 23.9 26.5
5. Post balance sheet event
The Group has announced a special dividend of 43.0p to be paid in June 2007 and
this will be accompanied by a share consolidation.
2007 FINANCIAL CALENDAR
Report and accounts posted 30th March 2007
Record date for final ordinary dividend 27th April 2007
Annual General Meeting 11th May 2007
Final ordinary dividend payable 1st June 2007
2007 half year end 30th June 2007
The financial information set out in this announcement does not constitute the
Company's statutory accounts for the years ended 31st December 2006 and 2005
but is derived from those accounts. Statutory accounts for 2005 have been
delivered to the Registrar of Companies and those for 2006 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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