Final Results
March 11 2011 - 2:00AM
UK Regulatory
TIDMAGA
11th March 2011
FOR IMMEDIATE RELEASE
AGA RANGEMASTER GROUP PLC
2010 FULL YEAR RESULTS
INCREASE IN PROFITS AND CASH BALANCES ACHIEVED IN EXACTING YEAR
Year to 31st December 2010 2009
GBPm GBPm
Revenue 259.1 245.0
EBITDA (before non-recurring costs) 29.8 12.6
Operating profit before amortisation 6.9 0.1
Operating profit / (loss) 5.1 (1.5)
Profit before tax 19.9 0.5
Basic earnings per share 21.7p 2.5p
Total equity 167.1 134.3
Total dividend 1.7p -
Net cash 34.6 28.0
Strategic and operational highlights
* Revenues rose nearly 6% in the year to GBP259.1 million; operating profit
before amortisation increased to GBP6.9 million (2009: GBP0.1 million) and
profit before tax including pension curtailment gains was GBP19.9 million
(2009: GBP0.5 million).
* Net cash rose again to GBP34.6 million from GBP28.0 million at the end of 2009
and GBP5.8 million at the end of 2008 reflecting continuing tight cost and
cash flow management.
* Dividends were restored for the year at a total of 1.7 pence per share
(2009: nil) - a sign of the Group's confidence in its prospects.
* Product development programmes of recent years are now providing traction
in existing and new markets. We expect this to support the trend for range
cookers to take share from equivalent built-in formats.
William McGrath, Chief Executive commented: "Our two core brands, Rangemaster
and the classic AGA, put in strong performances and were key to the near 6%
revenue increase we saw during 2010. We expect similar trend lines in 2011 in
spite of the clouds over consumer markets. Strong finances, good operational
gearing and investment in new products were the themes of 2010 which will bring
clear cut progress in 2011."
Enquiries:
William McGrath, Chief Executive 0207 404 5959 (today)
Shaun Smith, Finance Director 01926 455 731 (thereafter)
Simon Sporborg / Charlotte Kenyon, Brunswick 0207 404 5959
AGA RANGEMASTER GROUP PLC
2010 FULL YEAR RESULTS
CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENT
Overview
2010 saw good progress by the Group as we focused on range cookers and kitchen
living despite the exacting conditions and our core consumer markets remaining
subdued. Particular features of the year were:
* The restoration of revenue growth - up nearly 6% at GBP259.1 million - with
positive trend lines continuing through the year.
* The appreciable improvement in operating profits before amortisation to
GBP6.9 million (2009: GBP0.1 million) and GBP5.1 million (2009: GBP1.5 million loss)
after amortisation.
* The further strengthening of our net cash position to GBP34.6 million from
GBP28.0 million a year ago meaning we have seen the Group's net cash balances
increase by nearly GBP29 million in the last two years.
* The further integration and streamlining of our operations boosting
operational gearing as we use our Rangemaster developed business processes
across the Group. This was seen with AGA and Rangemaster in the UK and
Heartland and Marvel in North America.
* There is now a net surplus in the pension schemes on an accounting basis
and the indications are that the deficit has fallen appreciably on an
actuarial basis.
* The product development work of recent years is now bringing substantial
benefits seen, for example, with induction ranges and with the new
Rangemaster 100cm lines. We expect new products to make a substantial
impact in 2011.
These factors taken together underpin the confidence of the board in both the
resilience and the prospects for the Group which is reflected in the
restoration of dividend payments.
Trading performance in 2010
2010 saw a steady pick up in the level of sales with revenues of GBP259.1
million, up nearly 6% at the full year having been up 4.8% at the half year. Of
sales in 2010, 63% were in the UK and 37% internationally as we look to
progress towards our 50% KPI target for international sales. Profits increased
as the operational gearing benefits of higher revenues showed through. In the
year there was also a significant curtailment gain arising from the freezing of
final salaries in the pension scheme which amounted to GBP16.3 million. Taking
this and other non-recurring items into account profit before tax was GBP19.9
million compared with GBP0.5 million in the prior year.
Given the strengthened financial and cash positions, the board is proposing a
final dividend per share of 1.0 pence for the year bringing the total for the
year to 1.7 pence per share.
Strategic progress
The board's first objective since the market turned down sharply in the second
half of 2008 has been to secure the position of the Group through tight
financial management - the importance of the task heightened by the relative
size of the operations and the pension scheme. The cost cutting actions made
early in the recession have been followed up with a series of steps to
integrate our operations more closely in order to achieve efficiency
improvements. These have worked well. The cost base is now significantly lower
than it was heading into the recession and we have 20% fewer employees than
three years ago. We expect over 40% of incremental revenue to feed into
operating profits. We have also kept our focus on the well-established
positions and the continuing potential of our brands to see how they can
continue to generate the growth necessary to create the value increases
expected by our shareholders.
Our plans to develop the business are then reflected in the progress made at
Rangemaster. Since the repositioning in 2002 the brand and operation has moved
from breakeven to delivering the Group's KPI target of 10% return on sales. We
have a factory in Leamington Spa which uses modern robotics to ensure our
cooking cavities are the best in the sector. We are the first range cooker
manufacturer to receive Energy Saving Trust certification across all its dual
fuel and induction cookers. Progress continues to come from product innovation.
We have succeeded in making induction a mainstream rather than a specialist
technology due to the price points we have and it now accounts for almost 10%
of Rangemaster cooker volumes. Progress comes from closely working with our
dealers - over 200 of which have Rangemaster Design Centres - and we have
expanded the brand offering so that for every pound spent on Rangemaster
cookers in the UK a further 30 pence is spent on other Rangemaster appliances.
Growth also comes from international expansion with almost a quarter of cooker
sales volumes being outside Britain. We are now looking to raise that
proportion to over 30%.
We believe that our cast iron cooker portfolio will see sales growth as our
product development programmes align our products with changing consumer needs.
Research shows that it is the combination of a 'warm welcome home' alongside
cooking quality that has attracted generations of households to AGA, Rayburn
and Stanley. With the modern programmable AGA in particular, the AGA is more
flexible operationally and will, in future, become still more so. The electric
AGA can play a part in helping make use of renewable energy generated locally -
a key way to avoid the transmission losses suffered by the electricity grid.
With Rayburn and Stanley we have added condensing boilers and more adaptable
fluing as we drive the idea harder of having a single appliance at the heart of
the home providing cooking, hot water and central heating. Here again our
engineers have worked out how to make our products part of a system
incorporating renewables - through our Eco-Connect packages. We also have in
place an installation arrangement with the Mark Group for solar hot water and
solar electric panels.
We believe that customers want to buy a wider range of complementary products
for their home and in particular, kitchen needs - hence our ownership of Fired
Earth and Grange. Fired Earth has struggled for some years to be profitable in
spite of being widely appreciated for its product leadership and brand. We have
now narrowed the product focus of Fired Earth keeping tiles as the dominant
range and have supplemented our offering through the 'Tile Basics' range which
widens the pricing spectrum. Our KPI remains to return Fired Earth and Grange
to overall profitability and progress has been made during the year.
We also took the further step to help ensure Fired Earth achieves its KPI
target by bringing in the experienced retailer and venture capitalist, Andrew
Manders, to run Fired Earth on an interim basis and to assess a long-term
operational framework for the business. Fired Earth now operates off a lower
fixed cost base with higher net margins reducing the run rate of losses -
although sales revenues are flat.
Kitchens are also a key part of the Grange and Fired Earth's product portfolio
and Charlie Smallbone has also developed three new kitchen ranges for them -
made by Grange in France. They are helping to attract a wider and energetic
range of dealers internationally to the Grange brand. The idea of showing a
complete kitchen including appliances may prove to be the model for the future
for AGA, La Cornue and Grange in international markets as well as for Fired
Earth in the UK.
Customer relationship management
By focusing on the first 60 days after initial enquiry and tailoring our
responses to each enquirer, we have increased the conversion ratio from enquiry
to order across our brands, most notably within our own AGA Shops in the UK.
Leveraging the Group's customer database remains one of our key KPIs. Our
database of over 1.3 million households continues to grow, enabling us to
contact prospects and customers about news and events. We have increased our
contact with the people on our database through various channels, including
online, where we have developed our website, email and social media
interaction. As a result of this, we are pleased that central brochure requests
have increased by 30% while online sales have increased by 40% in the past
year.
Pension funding
The Group's main pension scheme is large relative to the size of the Group. On
an IAS 19 accounting basis at 31st December 2010 the Group's pension schemes
had a net surplus of GBP7.1 million on assets of GBP759.5 million compared to a
deficit of GBP40.5 million in 2009. This will give rise to a net pension credit
of circa GBP3.0 million in 2011 (2010: GBP0.1 million). The main pension scheme's
last formal triennial actuarial valuation was as at 31st December 2008. The
current recovery plan put in place on completion of that valuation requires
payments or guarantees of GBP2 million in 2011, GBP10 million a year from 2012 to
2020 inclusive, and a bullet payment of GBP48 million on 31st December 2020. The
indications are that the actuarial position has improved appreciably. Three
years ago the Company reached a long-term funding agreement with the trustee of
the scheme to make the scheme fully funded on a self-sufficiency basis by 31st
December 2020. This agreement is intended to provide a new recovery plan from
the 2011 triennial actuarial valuation. The Company continues to provide GBP50
million of guarantees in support of the Group's potential obligation to the
scheme in 2020 under the agreement. In the meantime the Company and trustee
continue to look to take steps to reduce the risks and minimise the volatility
of the scheme and to take measures such as the freezing of current member
pensionable salaries which will manage down the potential exposure of the Group
in the long run.
Other items
The Group received cash of GBP7.6 million on 7th January 2011 on the exercise of
an option held by Niagara Corporation to acquire the freeholds of certain
properties used by operations it acquired from the Group in 1999. Net income in
2010 from these properties was GBP0.8 million following a rent review in 2009,
and the sale will give rise to a book profit in 2011 of over GBP0.6 million.
The Group expects a judgment from a German court this year relating to the
valuation of a minority shareholding in a business which the Group acquired in
1998 and sold in 2001. A provision to meet possible costs arising has been
maintained for some years.
People
The enthusiasm and energy of our employees has been a particular feature of the
year. We have adapted well to new ideas and processes that will ensure we are
competitive and have the quality and innovative products required by our
customers.
Peter Tom left the board after six years in which he made a major contribution
to the Group's strategic development, latterly as senior non-executive
director. He was replaced by Paul Dermody as senior non-executive director, and
Jon Carling whose career has been in design and engineering within the premium
car industry - notably Jaguar and Aston Martin - and who has recently joined
Rolls-Royce aero-engine operations.
Current trading
The reduced cost base and increased efficiencies made over the past three years
means that the Group's operational gearing should, with revenue growth, bring
good progress. We have planned for continuing growth in revenue. However, as
the factors affecting trading (the UK housing market and consumer confidence)
remain fragile, we are ready to respond to difficult market conditions. Our new
product launches will, we expect, have a positive impact. The focus on cash
management and costs in recent years will be sustained.
AGA and Rayburn started 2011 encouragingly, with strong marketing and product
launch programmes in place, already reflected in lead generation and home
survey numbers. We expect the 2010 bounce-back in sales to be sustained. For
Fired Earth the stronger end to 2010 has given way to a more volatile start in
2011. Our upgraded transactional website is performing encouragingly.
Rangemaster has had a sound start to 2011, with UK orders satisfactory so far
this year and more progress being achieved on the continent. The North American
markets continue to be quiet.
We have confidence in the strategic direction we have taken in recent years -
even though our consumer markets have been buffeted by challenging economic
conditions. The systematic work to improve our operations and the focus on
niches in our market places where we can expand our market positions with
relevant and exciting products does provide expectations for strengthened
financial performance. We, therefore, expect 2011 to be a year of clear cut
progress.
BUSINESS AND FINANCE REVIEW
2010 saw improved results due to operational process efficiencies, our
strengthening product portfolio, and our continued focus on leveraging our
market leading brands. This all helped improve results, despite our markets
remaining quiet. A good lead indicator has been mortgage approvals in the UK
which picked up in late 2009 and then remained largely flat during 2010 at
levels under half the market peak of 2007. Mortgage approval levels have
started slowly in 2011. The UK appliance markets were marginally ahead with our
core sub-sector of range cookers performing better than the wider cooker
market. The North American appliance markets were up 3.3% with the premium end
weaker, most notably in the second half of the year.
Against this background, we worked methodically to raise efficiencies. The
integration of AGA, Rangemaster and Stanley into one structure has worked well
and there are now closely identified projects within the manufacturing,
distribution and service support areas of the business that will bring further
benefits. Similarly, in North America AGA Marvel is now operating as a single
operation using methodologies created in the UK for AGA Rangemaster. In
November 2010 the transfer of hot side production from Kitchener near Toronto
to our manufacturing and distribution hub in Greenville, Michigan took place.
Such efficiency improvements are critical given renewed cost pressures as
commodity and component prices rise. We have an Asian Sourcing Office based in
Hong Kong which ensures we have a flexible approach to international sourcing.
The team is also part of the push to sell our products into emerging markets.
In all our markets we keep close control of key inputs like steel, electricity
and gas taking hedged positions where economical and practical whilst also
looking to mitigate inflationary pressures through selling price increases. Our
two-year electricity and gas deal entered into at the end of 2009 has, for
example, proved worthwhile as prices have subsequently risen sharply. We feel
that we have fundamentally reduced the cost base and that there is deliverable
operational gearing available to the Group.
Cast iron cookers : AGA, Rayburn and Stanley
2008 and 2009 saw sharp falls in demand for cast iron cookers, most notably in
Ireland. In 2010 AGA sales partially recovered but Rayburn and Stanley sales
did not. Overall with sales of 11,650 units we moved further away from our 2007
sales level and our KPI of 19,600 units. The improved AGA sales reflected the
return of some confidence to our customer base. Our good lead generation was
helped by our 'Official Guide' to purchasing an AGA which summarises the key
features of why so many people love and cherish their AGA and how easy to buy
and how flexible the modern products are. We are now looking to have AGA
cookers in more kitchen specialist stores showing the AGA in modern kitchen
formats where built-in lines are typically found. We have also segmented our
market by focusing inter alia, on 'entry level' prices, notably with the
two-oven oil AGA at GBP4,995 and the emerging markets for home energy management
with the new Kidderminster centre. Trade up programmes and burner upgrades to
add programmability to existing models have become a well-developed and a
noteworthy adjunct to the business. We are also expanding our 'grass roots'
contact with consumers through our 2010/2011 sponsorship of the AGA Ladies'
Point-to-Point races, which will culminate in the final at Cheltenham on 4th
May.
Rayburn has seen a complete product line overhaul in the last four years. The
600 Series is steadily building a position in the oil and gas market given its
'A' rated condensing boiler and its larger ovens. We are adding a conventional
flue model to a power flue option which materially expands the target market
for Rayburn by simplifying many installations. In 2010 demand was lower for
wood burning models - a trend we expect to see reverse as the oil price moves
back up. We have looked again at our routes to market and are working to
establish closer links in the heating and plumbing specialist sector to
emphasise that the Rayburn or Stanley can be the hub of a domestic heating
system - potentially incorporating renewables such as solar collectors where
systems need to be integrated. Our expanded presence in the stove market
supports this trend. Indeed, success in stoves was central to sustaining our
position in what were exceptionally difficult markets in Ireland. The Cara
insert stove - which makes a solid fuel fire up to three times more efficient
than an open fire - helped stove volumes in Ireland rise 30%.
Rangemaster cookers and other appliances
2010 was another successful year for the Rangemaster operations. Cooker volumes
were up by nearly 5% to 63,900 - still well short of the 76,000 units
established as the base level KPI in 2007. The capacity of the Leamington Spa
factory is 100,000 units. The product manufacturing efficiency programme
continues to be strong - seen, for example, in the expanded use of robotics and
specifically the new internally designed and patented single piece base frame
providing solidity to the products.
The range cooker market outperformed the overall cooker market in the UK. We
are determined to underline the virtues of having a range at the heart of the
kitchen moving the centre of gravity of a household from the sitting room to
the kitchen and how it brings greater flexibility than built-in equivalent
products and can often be less costly. We now have a strong overall portfolio
of products with refrigeration lines including side-by-side and integrated
models. We continue to expand our continental operations, building up design
centres equivalent to those in the UK. With induction sales growing rapidly and
with the 100cm models starting to impact in a sub sector of the range cooker
market in which we previously did not have a product offering, and with new
designs being prepared for launch, volumes are expected to rise further this
year.
Our Nottingham plant makes specialised parts for our cookers and is also the
last significant domestic stainless steel sink manufacturing facility in the
UK. We have been investing to enhance our design capabilities expanding our
Rangemaster sink brand alongside our trade brand, Leisure.
In North America, AGA Marvel had a tough second half as the housing market
remained slow and higher end appliances struggled as a sub sector. Our hot-side
operation, encompassing sales of Heartland and AGA branded cookers, was quiet.
We have integrated our dealer structures to have the strongest offering
possible - acting as distributor ourselves in Canada. Our product portfolio has
been strengthened with new Energy Star rated products, a new forced air
platform for beverage centres and a clear door refrigerator. All these new
lines made in our factory in Michigan will enable us to benefit quickly when
market conditions improve.
Cookware - sold by AGA and Divertimenti - is a significant part of our product
offering. 2010 was a strong year and online sales grew rapidly. The great
reputation of Divertimenti and its two flagship London stores was underpinned
by our successful cookery schools which attract top chefs to lead termly
classes and by suppliers looking to Divertimenti as a natural partner when
launching new products. At AGA we are launching complete new ranges of cast
iron and stainless steel saucepans this spring in order to tap into the
considerable growth opportunities in the cookware business.
Fired Earth made a loss as revenues were flat. Larger bathroom and kitchen
installations were slow but the tile business, backed by the launch last spring
of the 'Tile Basics,' range saw revenues up 3% with orders up 5%.
Grange was close to breakeven in Europe with rationalisation in France now
producing a good balance with our Romanian factory established in 2004. Our
modular lines, typified by bespoke wall-to-ceiling bookcases, represent 20% of
sales and continue to gain recognition. Our dealers see Grange's heritage
supplemented by modern design as making Grange a growing force in their market
places. Our innovative multi-functional coffee table epitomises the new
vibrancy of Grange. It is in North America, where Grange has a fixed cost
rental structure and with revenues flat at $7 million, that it continues to
make losses. New products increased sales to key specialist customers and the
benefits of systematic marketing initiatives provide a basis to expect
continuing progress in 2011. Working more closely with the Group's customer
database is key to improving performance. We continue to develop our approach
to customer relationship management.
Finance strategy
The Group seeks to maintain a strong balance sheet to fund its development
opportunities whilst also being mindful of the scale of the main pension
scheme.
The Group has continued with a rigorous and disciplined approach to cost and
cash management. The result is both improved profitability and an increase in
net cash from GBP28.0 million at the start of the year to GBP34.6 million at the
end of 2010. We therefore have the financial resource to assist the Group to
pursue its development plans.
Revenue
Group revenues increased by 5.8% to GBP259.1 million from the GBP245.0 million
reported in 2009. Second half revenues of GBP135.7 million were up 6.7%, an
increase over the growth experienced in the first half when revenues were
GBP123.4 million, up 4.8% on the GBP117.8 million reported in the first half of
2009. Of total revenues 37% were outside the UK (2009: 36%).
Operating profit
The operating profit for the year was GBP5.1 million, much improved from the loss
of GBP1.5 million reported in 2009. The second half profit of GBP4.3 million
followed on from a first half profit of GBP0.8 million as the Group benefitted
more fully from the operational efficiencies implemented in 2008 and 2009.
Non-recurring costs
Non-recurring costs in the year totalled GBP1.4 million. The cost of transferring
our hot-side business from Canada to Greenville was $1.0 million (GBP0.7 million)
and is expected to deliver cost savings of $0.9 million in 2011. Integrating
the sales distribution structure for the Group in Ireland cost GBP0.3 million.
Stanley is now the Irish local distributor for our appliance brands in Ireland.
In addition, there were headcount reductions at AGA and Fired Earth.
Finance costs
Net finance costs for the year were GBP0.2 million (2009: GBP0.2 million finance
income). During the year the average interest rate on cash deposits was 0.3%
and over 1% on borrowings, which was primarily the cost of currency loans held
for hedging purposes.
Profit before tax
Profit before tax in the year was GBP19.9 million (2009: GBP0.5 million) and
included a pension curtailment gain of GBP16.3 million as we froze the
pensionable salary for all scheme members whose salaries were not frozen in
2009.
Taxation
The Group's tax charge was GBP5.0 million (2009: GBPnil) on profits before tax of
GBP19.9 million. The Group tax rate was 25.1%.
Moving forward the Group expects to pay tax at around the UK standard rate of
27% once the benefit of the tax losses arising during the economic slow down
have been utilised.
Earnings per share
Basic earnings per share were 21.7 pence (2009: 2.5 pence) based on an average
number of shares in issue of 69.2 million (2009: 69.2 million).
Dividends
The board is proposing a final dividend of 1.0 pence per share making the full
year dividend 1.7 pence (2009: nil pence). The cash cost of the total dividend
for the full year will be GBP1.2 million. The final dividend will be paid on 3rd
June 2011.
Cash flow
The Group has continued with its disciplined approach to cash management. The
outcome was cash flow generated from operating activities of GBP15.7 million in
the year which followed on from the GBP25.3 million generated in 2009 and
resulted from a determined effort to destock further and manage working capital
down in the face of difficult economic conditions.
The net inflow from working capital in the year was GBP8.7 million (2009: GBP22.9
million).
Capital expenditure including intangibles in the year totalled GBP5.7 million
compared to GBP8.1 million in 2009 (which included a GBP2.8 million payment on the
AGA Marvel facility in the US). The depreciation and amortisation of
intangibles charge in 2010 was GBP8.3 million (2009: GBP8.7 million).
The resulting net cash position at 31st December 2010 was GBP34.6 million (2009:
GBP28.0 million).
CONSOLIDATED INCOME STATEMENT
Year to 31st December
2010 2009
GBPm GBPm
Revenue 259.1 245.0
Net operating costs (254.0) (246.5)
_____________________________________________________________________________________
Group operating profit / (loss) 5.1 (1.5)
Net pension credit 16.4 5.4
Non-recurring cost (1.4) (3.6)
_____________________________________________________________________________________
Profit before net finance costs and income tax 20.1 0.3
Finance income 0.2 1.1
Finance costs (0.4) (0.9)
_____________________________________________________________________________________
Profit before income tax 19.9 0.5
Income tax expense (5.0) -
_____________________________________________________________________________________
Profit for year 14.9 0.5
_____________________________________________________________________________________
Profit attributable to:
Equity holders of the parent 15.0 1.7
Non-controlling interests (0.1) (1.2)
_____________________________________________________________________________________
Profit for year 14.9 0.5
_____________________________________________________________________________________
Earnings per share attributable to equity holders of p p
the parent
Basic 21.7 2.5
Diluted 21.7 2.5
____________________________________________________________________________________
Dividend per share p p
Interim paid 0.7 -
Final proposed 1.0 -
____________________________________________________________________________________
Total ordinary dividend 1.7 -
____________________________________________________________________________________
All operations are continuing.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME / (LOSSES)
Year to 31st December 2010 2009
GBPm GBPm
Profit for year 14.9 0.5
_________________________________________________________________________________________
Exchange adjustments on hedge of net investments - 1.6
Exchange differences on translation of foreign operations (1.1) (9.3)
Actuarial gains / (losses) on defined benefit pension schemes 26.6 (104.5)
Deferred tax on actuarial (gains) / losses (7.2) 29.3
_________________________________________________________________________________________
Other comprehensive income / (losses) for the year 18.3 (82.9)
_________________________________________________________________________________________
Total comprehensive income / (losses) for the year 33.2 (82.4)
_________________________________________________________________________________________
Attributable to:
Equity holders of parent 33.3 (81.1)
Non-controlling interests (0.1) (1.3)
_________________________________________________________________________________________
Total comprehensive income / (losses) for the year 33.2 (82.4)
_________________________________________________________________________________________
CONSOLIDATED BALANCE SHEET
As at 31st December 2010 2009
GBPm GBPm
Non-current assets
Goodwill 66.7 66.9
Intangible assets 22.9 23.2
Property, plant and equipment 40.8 50.8
Retirement benefit surplus 8.6 -
Deferred tax assets 11.8 21.7
___________________________________________________________________________________
150.8 162.6
___________________________________________________________________________________
Current assets
Inventories 42.8 46.0
Trade and other receivables 30.6 31.7
Current tax assets 1.8 1.8
Cash and cash equivalents 51.7 45.0
___________________________________________________________________________________
126.9 124.5
Assets held for sale 10.2 3.1
___________________________________________________________________________________
Total assets 287.9 290.2
___________________________________________________________________________________
Current liabilities
Borrowings (1.7) (1.3)
Trade and other payables (67.5) (63.2)
Current tax liabilities (20.4) (18.4)
Current provisions (2.1) (2.4)
___________________________________________________________________________________
(91.7) (85.3)
___________________________________________________________________________________
Net current assets 35.2 39.2
___________________________________________________________________________________
Non-current liabilities
Borrowings (15.4) (15.7)
Retirement benefit obligation (1.5) (40.5)
Deferred tax liabilities (4.0) (6.1)
Provisions (8.2) (8.3)
___________________________________________________________________________________
(29.1) (70.6)
___________________________________________________________________________________
Total liabilities (120.8) (155.9)
___________________________________________________________________________________
Net assets 167.1 134.3
___________________________________________________________________________________
Equity
Share capital 32.5 32.5
Share premium account 29.6 29.6
Other reserves 84.7 85.8
Retained earnings / (losses) 19.9 (14.1)
___________________________________________________________________________________
Equity attributable to equity holders of the parent 166.7 133.8
Non-controlling interest 0.4 0.5
___________________________________________________________________________________
Total equity 167.1 134.3
___________________________________________________________________________________
CONSOLIDATED CASH FLOW STATEMENT
Year to 31st December 2010 2009
GBPm GBPm
Operating activities
Profit before income tax 19.9 0.5
Reconciliation of profit before income tax to net cash flows:
Net finance costs / (income) 0.2 (0.2)
Depreciation of property, plant and equipment 6.5 7.1
Impairment of assets held for sale - 0.8
Amortisation of intangible assets 1.8 1.6
Loss on disposal of property, plant and equipment 0.1 0.1
Share based payments expense 0.1 0.2
Decrease in inventories 3.1 15.3
Decrease in receivables 0.8 5.6
Increase in payables 4.8 2.0
Decrease in provisions (0.4) (1.3)
Movement in pensions (21.2) (6.4)
____________________________________________________________________________________
Cash generated from operating activities 15.7 25.3
Finance income 0.2 1.1
Finance costs (0.4) (0.9)
Tax (payment) / receipt (2.3) 4.0
____________________________________________________________________________________
Net cash flows from operating activities 13.2 29.5
____________________________________________________________________________________
Investing activities
Disposal related costs (0.4) (0.4)
Purchase of Mercury - (0.5)
Purchase of property, plant and equipment (3.7) (6.2)
Expenditure on intangibles (2.0) (1.9)
Proceeds from disposal of property, plant and equipment 0.1 -
____________________________________________________________________________________
Net cash used in investing activities (6.0) (9.0)
____________________________________________________________________________________
Financing activities
Dividends paid (0.5) -
Repayment of borrowings (0.2) (20.5)
New bank loans raised 0.3 2.6
____________________________________________________________________________________
Net cash used in financing activities (0.4) (17.9)
____________________________________________________________________________________
Effects of exchange rate changes (0.1) (0.5)
____________________________________________________________________________________
Net increase in cash and cash equivalents 6.7 2.1
Cash and cash equivalents at beginning of year 45.0 42.9
____________________________________________________________________________________
Cash and cash equivalents at end of year 51.7 45.0
____________________________________________________________________________________
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31st December 2010
Equity attributable to equity holders of the parent
Non-
Share Share Other Retained controlling Total
capital premium reserves earnings Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1st January 2010 32.5 29.6 85.8 (14.1) 133.8 0.5 134.3
_____________________________________________________________________________________________
Comprehensive income
Profit / (loss) for the year - - - 15.0 15.0 (0.1) 14.9
Other comprehensive income /
(losses):
Exchange differences on
translation of foreign operations - - (1.1) - (1.1) - (1.1)
Actuarial gains on defined
benefit pension schemes - - - 26.6 26.6 - 26.6
Deferred tax on actuarial gains - - - (7.2) (7.2) - (7.2)
_____________________________________________________________________________________________
Total comprehensive income /
(losses) for the year to 31st
December 2010 - - (1.1) 34.4 33.3 (0.1) 33.2
Dividends paid - - - (0.5) (0.5) - (0.5)
Share based payments - - - 0.1 0.1 - 0.1
_____________________________________________________________________________________________
At 31st December 2010 32.5 29.6 84.7 19.9 166.7 0.4 167.1
_____________________________________________________________________________________________
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31st December 2009
Equity attributable to equity holders of the parent
Non-
Share Share Other Retained controlling Total
capital premium reserves earnings Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1st January 2009 32.5 29.6 95.5 57.1 214.7 1.8 216.5
_____________________________________________________________________________________________
Comprehensive income
Profit / (loss) for the year - - - 1.7 1.7 (1.2) 0.5
Other comprehensive (losses) /
income:
Exchange adjustments on
hedge of net investments - - 1.6 - 1.6 - 1.6
Exchange differences on
translation of foreign operations - - (9.2) - (9.2) (0.1) (9.3)
Actuarial losses on defined
benefit pension schemes - - - (104.5) (104.5) - (104.5)
Deferred tax on actuarial losses - - - 29.3 29.3 - 29.3
_____________________________________________________________________________________________
Total comprehensive losses for
the year to 31st December 2009 - - (7.6) (73.5) (81.1) (1.3) (82.4)
Transfer between reserves - - (2.1) 2.1 - - -
Share based payments - - - 0.2 0.2 - 0.2
_____________________________________________________________________________________________
At 31st December 2009 32.5 29.6 85.8 (14.1) 133.8 0.5 134.3
_____________________________________________________________________________________________
NOTES
1. Segmental analysis
The directors consider that there are two operating segments namely AGA and Rangemaster.
The two operating segments are considered to meet the aggregation criteria of
IFRS 8 in full and so the directors consider that there is only one aggregated
reportable segment. The majority of the disclosures as required under IFRS 8
have therefore already been given in these financial statements.
Segment assets include property, plant and equipment, intangibles, inventories,
retirement benefit surpluses and receivables - cash and taxation are not
included. Non-current assets exclude the deferred tax assets. Entity wide
disclosures in respect of revenues from external customers, total segment
assets and non-current assets are provided below:
2010 2009
Total Non- Total Non-
segment current segment current
Revenue assets assets Revenue assets assets
GBPm GBPm GBPm GBPm GBPm GBPm
United Kingdom 163.1 117.9 68.9 156.5 116.3 69.0
North America 29.8 42.0 30.3 30.6 43.2 30.5
Europe 59.9 62.7 39.8 53.8 62.2 41.4
Rest of World 6.3 - - 4.1 - -
___________________________________________________________________________________________
Total operations 259.1 222.6 139.0 245.0 221.7 140.9
Tax - 13.6 11.8 - 23.5 21.7
Cash - 51.7 - - 45.0 -
___________________________________________________________________________________________
Total 259.1 287.9 150.8 245.0 290.2 162.6
___________________________________________________________________________________________
2. Dividends
The directors are recommending a final dividend of 1.0 pence per share in
respect of the financial year ended 31st December 2010 (2009: nil). An interim
dividend of 0.7 pence per share was paid in the year (2009: nil).
3. Exchange rates
The income statements of overseas subsidiaries are translated into sterling
using average exchange rates and balance sheets are translated at year end
rates.
4. Net pension credit
2010 2009
GBPm GBPm
Current service cost - defined benefit (3.1) (2.3)
Curtailment gain 16.3 3.8
Net pension returns on assets and interest costs 3.2 3.9
________________________________________________________________________________
Net pension credit 16.4 5.4
________________________________________________________________________________
5. Income tax
2010 2009
GBPm GBPm
United Kingdom corporation tax based on a rate
of 28.0% (2009: 28.0%):
Current tax on income for year 0.5 (1.6)
Adjustments in respect of prior years 3.4 3.5
________________________________________________________________________________
United Kingdom corporation tax 3.9 1.9
Overseas current tax on income for year 0.5 1.1
________________________________________________________________________________
Total current tax charge 4.4 3.0
________________________________________________________________________________
United Kingdom deferred tax charge / (credit):
- change in rate of corporation tax 0.1 -
- current year 3.8 (0.8)
- prior year adjustments (3.1) -
Overseas deferred tax credit in year (0.2) (2.2)
________________________________________________________________________________
Total deferred tax charge / (credit) 0.6 (3.0)
________________________________________________________________________________
Total United Kingdom tax 4.7 1.1
Total overseas tax 0.3 (1.1)
________________________________________________________________________________
Total income tax 5.0 -
________________________________________________________________________________
6. Earnings per share
2010 2009
GBPm GBPm
Earnings for the purpose of the basic and diluted EPS
Profit after tax 14.9 0.5
Non-controlling interest 0.1 1.2
________________________________________________________________________________
Profit attributable to equity shareholders - for basic
and diluted EPS 15.0 1.7
________________________________________________________________________________
Weighted average number of shares in issue million million
For basic EPS calculation 69.2 69.2
Dilutive effect of share options and Long-Term Incentive Plan - -
________________________________________________________________________________
For diluted EPS calculation 69.2 69.2
________________________________________________________________________________
Earnings per share p p
Basic 21.7 2.5
Diluted 21.7 2.5
________________________________________________________________________________
7. Non-recurring cost
The GBP1.4m non-recurring cost relates primarily to integration costs at AGA
Marvel and further rationalisation costs at AGA, Fired Earth and Waterford
Stanley.
8. Post balance sheet event
On 7th January 2011 the Group received GBP7.6m on the exercise of an option held
by Niagara Corporation to acquire the freeholds of certain properties used by
the operations it acquired from the Group in 1999.
2011 financial calendar
Annual General Meeting 5th May 2011
2011 half year close 30th June 2011
Record date for final ordinary dividend 22nd April 2011
Final ordinary dividend payable 3rd June 2011
The financial information set out in this announcement does not constitute the
Company's statutory accounts for the years ended 31st December 2010 and 2009.
The financial information within this announcement is prepared in line with the
accounting policies presented within the Company's statutory accounts.
Statutory accounts for 2009 have been delivered to the Registrar of Companies
and those for 2010 will be delivered following the Company's Annual General
Meeting. The Company's auditor has reported on these accounts; its reports were
unqualified and did not contain statements under section 498(2) or (3) of the
Companies Act 2006.
END
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