Interim Results
September 07 2007 - 3:00AM
UK Regulatory
7th September 2007
FOR IMMEDIATE RELEASE
AGA FOODSERVICE GROUP PLC
2007 INTERIM RESULTS
HIGHLIGHTS
Aga Foodservice Group ("the Group"), which sells premium cookers and
refrigerators into the domestic and commercial markets, is issuing its interim
results for the half year ended 30th June 2007.
Half year to 30th June 2007 2006 Increase
Continuing operations �m �m %
Revenue 273.9 253.1 8
Operating profit 22.8 21.1 8
Profit before tax 22.0 21.0 5
Basic earnings per share 14.4p 13.1p 10
Dividend per share proposed 3.85p 3.5p 10
Shareholders' equity 319.0 312.4
Net (debt) / cash (79.7) 10.7
Highlights:
* Sixth successive first half year of revenue and profit growth.
* Consumer cooker sales up over 7% with Rangemaster sales particularly
strong.
* Double digit increases in earnings per share and dividend per share :
special dividend paid in June.
* Process to sell foodservice operations well underway.
* Review of strategic options for funding pension scheme announced.
"In 2007 focus is being placed on driving returns from the investments we have
made. The consumer brands business emerging from the proposed sale of foodservice
will have a strong record and great potential. With Aga and Rangemaster
manufacturing and sourcing capability, the Group has an outstanding product
offering and will look for further growth with confidence and determination."
William McGrath
Chief Executive
Enquiries:
William McGrath, Chief Executive 020 7404 5959 (today)
Shaun Smith, Finance Director 0121 711 6015 (thereafter)
Simon Sporborg / Charlotte Kenyon (Brunswick) 020 7404 5959
AGA FOODSERVICE GROUP PLC
2007 INTERIM RESULTS
The first half of 2007 saw our strategy of "equipping the world's best
kitchens" continue to pay dividends. Revenue and operating profits of our
continuing operations progressed further. The first half year also saw the
payment of a special dividend of �56 million (43 pence per share) and a share
consolidation undertaken as part of the process of raising overall shareholder
returns.
We announced on 6th July 2007 that the Group intended to further its objective
of driving strategic change in foodservice by examining ways to separate
foodservice from our consumer operations and that this could entail the sale of
foodservice. There has been considerable interest in acquiring these operations
and formal discussions are underway with a number of parties. With the sale of
foodservice the Group will indicate its plans for using the cash proceeds
received which can be expected to involve a further return of cash to
shareholders alongside continuing investment in our exciting core consumer
appliance-led businesses.
Trading Performance
In June 2007 we sold our US home fashions operation, Domain. As a consequence
the 2006 results have been restated to exclude the Domain loss of �1.0 million;
this compares to a net loss of �0.7 million in the first half of 2007.
Reported revenue in the first half of 2007 for continuing operations was �273.9
million; 8.2% ahead of the same period last year and operating profits were
�22.8 million, up 8.1% from �21.1 million. At constant exchange rates revenues
were up 11.1% to �281 million and operating profits up 10.4% to �23.3 million.
Included in operating profit in 2007 is �1.4 million of property disposal
profits. �1.8 million was included in 2006; such profits arise from our
continuing work to upgrade and consolidate our production facilities.
Interest costs rose in the period from a net �0.1 million to �0.8 million
reflecting the additional borrowings taken on after the purchase of Amana in
September 2006 and the payment of the special dividend.
Profit before tax was up 4.8% at �22.0 million. The tax rate was 18.2% compared
with 20.0% in the same period last year because UK deferred tax rates have been
reduced.
The Group's current targets are 10% ROS (return on sales) and 15% ROCE (return
on capital employed). Profit improvement was, to an extent, offset by raw
material cost increases, notably the �1.0 million absorbed as a result of the
rise in stainless steel prices.
Basic earnings per share from continuing operations, based on a weighted
average number of shares in issue of 125.6 million, were 14.4 pence per share
compared with 13.1 pence per share in the first half of 2006. This, in turn,
allowed us to raise the dividend by 10.0% to 3.85 pence per share. This follows
the special dividend of 43 pence per share paid in June and reflects the
continuing progress we have made.
Consumer Operations
The return on sales in UK and European Consumer was 10.5% (9.3% excluding
property).
Aga and Rangemaster continued to perform well. The number of cast iron cookers
sold in the first half was 9,700, up 7%. Aga saw a continuing increase in
electric model sales - a trend that will accelerate further now that the Aga
Intelligent Management System ("AIMS") has become available. For both the
Stanley and Rayburn lines, the renewed interest in carbon neutral wood burning
models provided impetus. We continue to place an onus on explaining the
environmental case for our cookers. The cooking and home heating features of
the products; the long life and recyclability; the avoidance of a multitude of
secondary appliances and the potential links to micro-generation all mean the
case for our products is cast iron. Sales outside Britain and Ireland continue
to grow as a percentage of total sales and were 16% in the first half of 2007.
The progress of Fired Earth and Grange was encouraging but returns remain too
low and the �55 million of our annual turnover which they provide is currently
making a modest contribution.
Rangemaster had another strong six months with sales up close to 10% to 36,000
units. The expansion in international markets is an important growth factor -
22% of sales were overseas. The French business in particular is performing
well and has excellent prospects. Rangemaster growth continues to be led by
product innovation and by the multi brand strategy. Providing products for
sales under the Aga Ranges, Falcon and La Cornue brands and now the Heartland
brand in Canada too, underpins the financial success of Rangemaster's
Leamington Spa production facility. The overall first half performance also saw
noteworthy progress from La Cornue and Divertimenti, the London based cookware
business.
In the US, Marvel leads the Group in refrigeration and continued to perform
well even though the premium appliance market in the USA has softened this
year. In constant currency, overall revenues rose including those for Heartland
and Aga Ranges and profits moved ahead to �0.9 million. The efficiencies of the
Marvel facilities continue to improve and with a new generation of electronic
controls now being rolled out, the potential of this business has increased
considerably. Marvel is adopting Rangemaster's process management standards as
the links between the operations becomes tighter.
The operational gearing of our businesses after the work on upgrading
facilities and products is significant. Rangemaster has recently seen further
sales momentum. Aga sales have been quiet over the summer but with AIMS now
available there is optimism for the key autumn selling period given strong
enquiry levels.
Foodservice Operations
The European foodservice operations performed satisfactorily in the first half
of the year boosted by supplying a further phase of the HM Prison refurbishment
programme. The UK commercial oven and refrigeration businesses saw larger roll
out programmes starting as the first half wore on, notably from the pub chains.
Eloma, the German combi-oven maker acquired last year had a good first half
with the number of project specifications obtained growing steadily. Efficiency
initiatives continue. Williams Refrigeration, for example, is set to
consolidate production on one expanded site following the exit from the Downham
Market site after its sale last year.
Bakery, after a good start slowed towards the end of the period as a number of
customers pushed back projects, notably in France. Recent activity shows this
was temporary. Led by the new head of European Bakery, Alain Peru, we are
looking at projects to raise efficiencies and cut costs within the bakery
operations. One success in the UK was with Whole Foods Markets. This US based
premium supermarket chain has fitted out its London flagship store with
products from across the Group's bakery and foodservice ranges - a number of
our lines are now specified in its satellite stores in the South East.
Overall margins in the US improved to 9.4%, well on the way towards hitting
10%. Amana, the microwave operation, had a buoyant first half backed by major
QSR roll outs. Our bakery operations continued to perform well through doughnut
lines for WalMart and Dunkin' Donuts. The lower margin, Victory Refrigeration,
finally saw some operational gearing benefits appear for its New Jersey
facility as it strengthened its buying group position. It is also enjoying the
high profile from Aga Foodservice being, for a second year, US Environmental
Protection Agency Manufacturing Energy Star Partner of the Year. We continue to
press the case for more efficient equipment in foodservice - a factor in the
Group being rated eleventh amongst the FTSE 350 companies in recent research
into corporate responsibility.
Upgrading production facilities to place our businesses at the forefront in
their sector is an important part of our planning. In this respect 2007 is a
particular milestone. Amana will shortly move to a new production and warehouse
facility close to its current Whirlpool base where it has remained housed since
acquisition. Belshaw will also move to a new facility in Seattle this year,
providing scope for further growth and production efficiencies in our US Bakery
operations.
Financial Position
Following the payment of the special dividend the Group ended the period with
net debt of �79.7 million. Operating cashflow was reduced by the high stock
levels as we prepared for the three planned factory moves. As this reverses it
will add significantly to the second half cash inflow the Group typically sees.
The possible sale of the foodservice operations will bring in cash and provide
a changed business profile. After a transaction the Group will restate its
financial targets. A factor to be taken into account is the Group's pension
schemes which, with assets at 30th June 2007 of �791.9 million and a
significant surplus of �73.4 million on an IAS 19 basis, are large in relation
to the business. As previously announced a �4.5 million payment was due to the
pension scheme in 2007 after the 2005 actuarial valuation. �1 million was paid
in the first half with a further �3.5 million paid in the second half. The
Group has appointed KPMG Pensions to assist in assessing how best to address
the financial strategy for the scheme against a changing market for risk
management of such schemes.
The tax charge was �4.0 million in the period and represented 18.2% of the
pre-tax profits from continuing operations. The net finance charge in the
period was �0.8 million reflecting the higher debt levels post the special
dividend and the 2006 acquisitions of Amana and Eloma.
Strategy
In 2007 we are seeking to highlight the value embedded in the market positions
we have created in our consumer and foodservice operations.
The Group's current performance is on track to produce results in line with the
Board's expectations for the year. The consumer markets will provide a single
focus for us with the likely sale of our foodservice operations.
The production capacity, the product ranges, the brands, the routes to market
in the UK and beyond and combined customer databases are all great assets. The
plans to increase the resources committed to driving top line growth are being
finalised. The Board is also considering the options to drive shareholder value
from a focussed consumer-led business. A statement of the Group's strategy will
be made when the proposals for foodservice are put to shareholders.
V Cocker CBE W B McGrath
Chairman Chief Executive
7th September 2007
AGA FOODSERVICE GROUP PLC
INTERIM RESULTS
CONSOLIDATED INCOME STATEMENT
Half year Half year Year to
to June to June December
2007 2006 2006
_______________________________________
Note �m �m �m
Continuing operations
Revenue 3 273.9 253.1 528.9
Net operating costs (251.1) (232.0) (481.2)
____________________________________________________________________________________________
Group operating profit 3 22.8 21.1 47.7
Non-recurring cost - - (1.0)
____________________________________________________________________________________________
Profit before net finance costs and income tax 22.8 21.1 46.7
Finance income 0.9 0.4 1.3
Finance costs (1.7) (0.5) (2.0)
____________________________________________________________________________________________
Profit before income tax 22.0 21.0 46.0
Income tax expense 4 (4.0) (4.2) (9.0)
____________________________________________________________________________________________
Profit for the period from continuing operations 18.0 16.8 37.0
____________________________________________________________________________________________
Discontinued operation
Post tax loss from discontinued operation 8 (0.7) (1.0) (5.9)
____________________________________________________________________________________________
Profit for the period 17.3 15.8 31.1
____________________________________________________________________________________________
Profit attributable to equity shareholders 17.4 15.9 31.1
Loss attributable to minority interests (0.1) (0.1) -
____________________________________________________________________________________________
Profit for the period 17.3 15.8 31.1
____________________________________________________________________________________________
Earnings per share - continuing 5 p p p
Basic 14.4 13.1 28.7
Diluted 14.3 13.0 28.5
____________________________________________________________________________________________
Earnings per share - total 5 p p p
Basic 13.9 12.4 24.1
Diluted 13.8 12.3 23.9
____________________________________________________________________________________________
p p p
Dividend per share 6 3.85 3.5 10.5
____________________________________________________________________________________________
CONSOLIDATED BALANCE SHEET
Half year Half year Year to
to June to June December
2007 2006* 2006*
_______________________________________
Note �m �m �m
Non-current assets
Goodwill 169.7 157.9 171.5
Intangible assets 29.1 20.1 29.1
Property, plant and equipment 84.6 86.1 85.7
Investments in associates 0.3 0.3 0.3
Retirement benefit surplus 10 76.8 4.3 29.9
Deferred tax assets 6.5 5.6 6.5
____________________________________________________________________________________________
367.0 274.3 323.0
____________________________________________________________________________________________
Current assets
Inventories 105.4 98.6 94.8
Trade and other receivables 106.3 87.9 93.0
Current tax assets 7.2 - 7.2
Cash and cash equivalents 42.6 48.9 43.2
____________________________________________________________________________________________
261.5 235.4 238.2
Assets held for sale - - 8.1
____________________________________________________________________________________________
Total assets 628.5 509.7 569.3
____________________________________________________________________________________________
Current liabilities
Borrowings (3.7) (3.9) (2.4)
Trade and other payables (117.0) (113.1) (115.2)
Current tax liabilities (16.5) (11.1) (14.4)
Current provisions (5.7) (6.7) (5.4)
____________________________________________________________________________________________
(142.9) (134.8) (137.4)
____________________________________________________________________________________________
Net current assets 118.6 100.6 100.8
____________________________________________________________________________________________
Non-current liabilities
Borrowings (118.6) (34.3) (51.7)
Other payables (1.0) (0.8) (1.0)
Retirement benefit obligation 10 (3.4) (3.3) (5.5)
Deferred tax liabilities (33.1) (11.4) (20.1)
Provisions (8.6) (10.5) (10.1)
____________________________________________________________________________________________
(164.7) (60.3) (88.4)
Liabilities held for sale - - (8.1)
____________________________________________________________________________________________
Total liabilities (307.6) (195.1) (233.9)
____________________________________________________________________________________________
Net assets 320.9 314.6 335.4
____________________________________________________________________________________________
Shareholders' equity
Share capital 9 32.4 32.2 32.3
Share premium account 68.6 67.4 67.8
Other reserves 28.3 31.6 28.5
Retained earnings 189.7 181.2 204.9
____________________________________________________________________________________________
Shareholders' equity 319.0 312.4 333.5
Minority interest in equity 1.9 2.2 1.9
____________________________________________________________________________________________
Total equity 320.9 314.6 335.4
____________________________________________________________________________________________
* Adjusted for fair value movements as required by IFRS (see note 11).
CONSOLIDATED CASH FLOW STATEMENT
Half year Half year Year to
to June to June December
2007 2006 2006
_______________________________________
Note �m �m �m
Cash flows from operating activities
Cash generated from operations 2.2 11.9 38.3
Finance income 0.9 0.4 1.3
Finance costs (1.4) (0.5) (1.8)
Tax payment (0.7) (1.7) (8.5)
____________________________________________________________________________________________
Net cash generated from operating activities 1.0 10.1 29.3
____________________________________________________________________________________________
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired - (5.0) (31.8)
Proceeds from sale of subsidiary, net of cash disposed 8 1.8 - -
Purchase of property, plant and equipment (7.0) (6.4) (14.5)
Expenditure on intangibles (1.3) (2.1) (4.1)
Proceeds from disposal of property, plant and equipment - 2.6 4.6
____________________________________________________________________________________________
Net cash used in investing activities (6.5) (10.9) (45.8)
____________________________________________________________________________________________
Cash flows from financing activities
Dividends paid to shareholders (64.7) (8.0) (12.5)
Net proceeds from issue of ordinary share capital 0.9 1.7 2.2
Repayment of borrowings acquired with acquisitions - (3.0) (3.0)
Finance lease repayment - (1.7) (1.8)
Repayment of borrowings - (0.8) -
New bank loans raised 68.8 5.6 21.6
____________________________________________________________________________________________
Net cash generated from / (used in) financing activities 5.0 (6.2) 6.5
____________________________________________________________________________________________
Effects of exchange rate changes (0.1) 0.5 (2.2)
____________________________________________________________________________________________
Net decrease in cash and cash equivalents (0.6) (6.5) (12.2)
Cash and cash equivalents at beginning of period 43.2 55.4 55.4
____________________________________________________________________________________________
Cash and cash equivalents at end of period 42.6 48.9 43.2
____________________________________________________________________________________________
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Half year Half year Year to
to June to June December
2007 2006 2006
_______________________________________
�m �m �m
Profit for the period 17.3 15.8 31.1
____________________________________________________________________________________________
Exchange adjustments on net investments (0.2) (5.4) (9.8)
Actuarial gains on defined benefit pension schemes 43.7 15.3 33.3
Deferred tax on items taken directly to reserves (11.8) (4.6) (9.9)
____________________________________________________________________________________________
Net gains not recognised in income statement 31.7 5.3 13.6
____________________________________________________________________________________________
Total recognised income for period 49.0 21.1 44.7
____________________________________________________________________________________________
Attributable to:
Equity shareholders 49.1 21.2 44.7
Minority interests (0.1) (0.1) -
____________________________________________________________________________________________
Total recognised income for period 49.0 21.1 44.7
____________________________________________________________________________________________
CONSOLIDATED CASH FLOW STATEMENT - RECONCILIATION
Reconciliation of operating profit to cash flows from operating activities
Half year Half year Year to
to June to June December
2007 2006 2006
_______________________________________
�m �m �m
Operating profit - continuing operations 22.8 21.1 47.7
Loss - discontinued operations (2.1) (1.0) (5.9)
Non-recurring cost - - (1.0)
Amortisation of intangible assets 1.0 1.0 2.5
Fair value adjustment of assets held for sale - - 3.0
Depreciation 5.4 5.2 11.1
Profit on disposal of property, plant and equipment (1.4) (1.8) (2.4)
Increase in inventories (11.3) (8.9) (8.6)
(Increase) / decrease in receivables (3.7) 2.6 (0.7)
(Decrease) / increase in payables (2.0) (2.0) 6.1
(Decrease) / increase in provisions (1.2) (0.4) (3.7)
Increase in pensions (5.3) (3.9) (9.8)
____________________________________________________________________________________________
Cash flows from operating activities 2.2 11.9 38.3
____________________________________________________________________________________________
AGA FOODSERVICE GROUP PLC
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
Financial information presented here is unaudited but has been reviewed by the
Group's auditor, Ernst & Young LLP. Its review opinion appears below.
Comparatives for the year ended 31st December 2006 are not the Group's
statutory accounts for that year as defined by Section 240 of the Companies Act
1985. Those accounts have been delivered to the Registrar of Companies. The
auditors' report on those accounts was unqualified.
The interim consolidated financial statements do not include all the
information and disclosures required in the annual financial statements and
should be read in conjunction with the Group's annual financial statements as
at 31st December 2006.
2. ACCOUNTING POLICIES
The interim financial statements have been prepared using the same accounting
policies as used in the preparation of the Group's annual financial statements
for the year ended 31st December 2006, except for the adoption of new standards
and interpretations, noted below. Adoption of these standards and
interpretations did not have any effect on the financial position or
performance of the Group.
In the current financial year, the Group will adopt IFRS 7 'Financial
Instruments: Disclosures' for the first time. As IFRS 7 is a disclosure
standard, there is no impact of that change in accounting policy on the
half-yearly financial report. The Group also adopted IFRIC Interpretation 10
which requires that an entity must not reverse an impairment loss recognised in
a previous interim period in respect of goodwill or an investment in either an
equity instrument or a financial asset carried at cost.
3. SEGMENTAL ANALYSIS
For management purposes, the Group is organised into four operating divisions
and these divisions are the basis on which the Group reports its primary
segmental information.
By primary business group Half year to Half year to Year to
June 2007 June 2006 December 2006
Revenue Operating Revenue Operating Revenue Operating
profit profit profit
______________________________________________________________
�m �m �m �m �m �m
UK & European Consumer 125.3 *13.1 116.1 11.5 243.1 25.1
US Consumer 17.1 0.8 18.9 0.8 35.5 1.4
UK & European Foodservice 94.4 5.4 95.3 **8.1 194.8 18.0
US Foodservice 37.1 3.5 22.8 0.7 55.5 3.2
____________________________________________________________________________________________
Total continuing operations 273.9 22.8 253.1 21.1 528.9 47.7
Non-recurring cost - - - - - (1.0)
Finance income - 0.9 - 0.4 - 1.3
Finance cost - (1.7) - (0.5) - (2.0)
____________________________________________________________________________________________
Total 273.9 22.0 253.1 21.0 528.9 46.0
Income tax expense - (4.0) - (4.2) - (9.0)
Discontinued operations 12.8 (0.7) 20.2 (1.0) 38.8 (5.9)
____________________________________________________________________________________________
Total 286.7 17.3 273.3 15.8 567.7 31.1
____________________________________________________________________________________________
* Includes �1.4m property profits (** includes �1.8m property profits).
SEGMENTAL ANALYSIS (CONTINUED)
Revenue by secondary segment - geographical origin
Half year to Half year to Year to
June 2007 June 2006 December 2006
______________________________________________________________
�m % �m % �m %
United Kingdom 143.6 50.1 139.3 51.0 274.9 48.4
North America 55.3 19.3 42.2 15.4 93.1 16.4
Europe 67.8 23.7 65.6 24.0 147.2 26.0
Rest of World 7.2 2.5 6.0 2.2 13.7 2.4
____________________________________________________________________________________________
Total continuing operations 273.9 95.6 253.1 92.6 528.9 93.2
Discontinued operations 12.8 4.4 20.2 7.4 38.8 6.8
____________________________________________________________________________________________
Total 286.7 100.0 273.3 100.0 567.7 100.0
____________________________________________________________________________________________
4. TAXATION
Corporation tax for the interim period to 30th June 2007 has been charged at
the estimated rates chargeable for the full year in the respective
jurisdictions as follows:
Half year Half year Year to
to June to June December
2007 2006 2006
_____________________________________________
�m �m �m
Current tax
UK corporation tax 0.5 2.7 3.1
Overseas tax 2.3 1.5 4.3
____________________________________________________________________________________________
2.8 4.2 7.4
Deferred tax
UK corporation tax 1.2 - 2.2
Overseas tax - - (0.6)
____________________________________________________________________________________________
1.2 - 1.6
____________________________________________________________________________________________
Total income tax expense 4.0 4.2 9.0
____________________________________________________________________________________________
5. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is based on the
following data:
Half year Half year Year to
to June to June December
2007 2006 2006
_____________________________________________
�m �m �m
Earnings
Profit after tax from continuing operations 18.0 16.8 37.0
Minority interests 0.1 0.1 -
____________________________________________________________________________________________
Earnings - basic and diluted EPS 18.1 16.9 37.0
Loss from discontinued operations (0.7) (1.0) (5.9)
____________________________________________________________________________________________
Profit attributable to equity 17.4 15.9 31.1
shareholders
____________________________________________________________________________________________
Weighted average number of shares in issue million million million
For basic EPS calculation 125.6 128.7 128.9
Dilutive effect of share options 0.9 1.1 1.1
____________________________________________________________________________________________
For diluted EPS calculation 126.5 129.8 130.0
____________________________________________________________________________________________
Earnings per share
Continuing operations p p p
Basic 14.4 13.1 28.7
Diluted 14.3 13.0 28.5
____________________________________________________________________________________________
Discontinued operations p p p
Basic (0.5) (0.7) (4.6)
Diluted (0.5) (0.7) (4.6)
____________________________________________________________________________________________
Total operations p p p
Basic 13.9 12.4 24.1
Diluted 13.8 12.3 23.9
____________________________________________________________________________________________
6. DIVIDENDS
Half year Half year
to June to June
Amounts recognised as distributions to equity 2007 2006
shareholders in the period:
________________________
�m �m
Final dividend of 7.0p for the year ended
31st December 2006 (2005: 6.2p) per share
2006 (2005: 6.2p) per share 9.1 8.0
______________________________________________________________________________
Special dividend of 43.0p per share 55.6 -
______________________________________________________________________________
The directors are proposing an interim dividend in respect of the financial
year ending 31st December 2007 of 3.85p per share (2006: 3.5p).
7. ACQUISITION OF SUBSIDIARIES
Prior year fair value adjustments relating to Amana of �0.1m have been made
finalising the provisional fair values made in 2006.
8. DISCONTINUED OPERATION
In December 2006, the Board announced its decision to sell Domain Inc. which
operates in the soft furnishings market in the US. On 21st June 2007 the Group
completed the disposal for a total consideration of �4.1m, including �2.0m of
loan notes, resulting in a gain on disposal of �1.4m. The results of the
discontinued operation are as follows:
Half year Half year Year to
to June to June December
2007 2006 2006
_____________________________________________
�m �m �m
Revenue 12.8 20.2 38.8
Net operating costs (14.9) (21.2) (41.5)
____________________________________________________________________________________________
Loss before income tax (2.1) (1.0) (2.7)
Finance costs - - (0.2)
Loss recognised on remeasurement to fair value - - (3.0)
____________________________________________________________________________________________
Loss for the period (2.1) (1.0) (5.9)
Profit on disposal of operation 1.4 - -
____________________________________________________________________________________________
Loss after tax for the period (0.7) (1.0) (5.9)
____________________________________________________________________________________________
Net cash inflow arising on disposal: �m
Net consideration received 1.8
Net cash disposed of -
____________________________________________________________________________________________
Total cash inflow 1.8
____________________________________________________________________________________________
The operating outflows in the period were �2.2m (half year to June 2006: �1.6m,
year to December 2006: nil) and the investing cash outflows were �0.7m (half
year to June 2006: �0.3m, year to December 2006: �0.6m).
As Domain was sold prior to 30th June 2007, the assets and liabilities
classified as part of a disposal group held for sale as at 31st December 2006
are no longer included in the balance sheet.
9. SHARE CAPITAL
During the period 405,765 ordinary shares (nominal value �105,341) were issued
in connection with the Company's share option schemes for an aggregate
consideration of �0.9m.
During the period, the Company undertook a share consolidation by which nine
existing ordinary shares with a nominal value of 25 pence were exchanged for
eight new ordinary shares with a nominal value of 28 1/8 pence. The new
ordinary shares carry the same rights as the old ordinary shares.
The number of shares in issue amounted to 115,137,149 on 30th June 2007.
10. RETIREMENT BENEFIT SCHEMES
Defined benefit schemes
Scheme assets have been valued at a market value of �791.9m and the defined
benefit liabilities at �718.5m, giving a �73.4m net surplus at the interim
date. The liabilities have been rolled forward from 31st December 2006 and
adjusted to take account of the increase in bond yields, which have increased
the discount rate from 5.2% to 5.9%.
11. IMPACT OF IFRS - RESTATEMENT OF COMPARATIVE INFORMATION
Since transition to IFRS the Group has continued to assess the detailed impact
of IFRS on the presentation of the Group's consolidated financial statements.
It has now been concluded that deferred taxation liabilities on brands
acquired, since the transition date, which are deemed to have an indefinite
life should be recognised and in accordance with IAS 8, the 2006 deferred
taxation and goodwill balances have been restated by �3.0m.
Under IFRS 3 fair values of the net assets of acquired businesses are finalised
within twelve months of the acquisition date. All fair value adjustments are
recorded with effect from the date of acquisition and as a consequence may
result in the restatement of previously reported financial results. Fair values
of the net assets acquired for Eloma and Amana, both 2006 acquisitions, have
now been finalised. This has resulted in a restatement of 2006 deferred
taxation and goodwill balances, relating to the brands, of �0.5m and �2.0m for
Eloma and Amana respectively.
The above adjustments do not affect the consolidated income statement, cashflow
or retained earnings.
12. EVENTS AFTER THE BALANCE SHEET DATE
On 6th July the Group announced it was considering the sale of the foodservice
operations.
Independent Review Report to Aga Foodservice Group plc
Introduction
We have been instructed by the Company to review the financial information for
the six months ended 30th June 2007 which comprises the Consolidated Income
Statement, Consolidated Balance Sheet, Consolidated Cash Flow Statement,
Consolidated Statement of Recognised Income and Expense, Consolidated Cash Flow
Statement - Reconciliation and the related notes 1 to 12. We have read the
other information contained in the interim report and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.
This report is made solely to the Company in accordance with guidance contained
in Bulletin 1999/4 'Review of interim financial information' issued by the
Auditing Practices Board. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company, for our work,
for this report, or for the conclusions we have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4 'Review of interim financial information' issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data, and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied, unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions. It is substantially less in scope than an audit performed in
accordance with International Standards on Auditing (UK and Ireland) and
therefore provides a lower level of assurance than an audit. Accordingly we do
not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30th June 2007.
Ernst & Young LLP
Birmingham
7th September 2007
MAIN ADDRESSES AND ADVISERS
Head Office and Registered Office:
Aga Foodservice Group plc
4 Arleston Way
Shirley
Solihull
B90 4LH
Telephone: 0121 711 6000
Fax: 0121 711 6001
e-mail: info@agafoodservice.com
Website: www.agafoodservice.com
Registered in England No. 354715
Registrars:
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex
BN99 6DA
Telephone (Helpline): 0870 600 3953
International (Helpline): 0044 (0) 121 415 7047
Auditors:
Ernst & Young LLP
Joint Financial Advisers and Stockbrokers:
Dresdner Kleinwort Securities Limited
Citigroup Global Markets Limited
2007 FINANCIAL CALENDAR
Record date for interim ordinary dividend 9th November 2007
Interim ordinary dividend payable 5th December 2007
2007 year end 31st December 2007
END
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