Aga upbeat after profits rebound
The firm behind iconic cast iron Aga cookers reported a surge in annual profits today and said the bounce back in sales should continue into 2011.
A recovery in demand for its cooker range following the recession helped Aga Rangemaster notch up £19.9m in pre-tax profits against £500,000 in 2009, although it said 2010 results included a £16.3m boost from changes to its staff pension scheme.
Analysts calculated that underlying profits rose to £5m from £300,000 a year earlier.
Revenues rose nearly 6% as improved customer confidence helped Aga sales rebound, while sales volumes of its Rangemaster range lifted nearly 5%.
William McGrath, chief executive of Aga Rangemaster, said: “We expect similar trend lines in 2011 in spite of the clouds over consumer markets.”
The new financial year has begun “encouragingly” for Aga and its harder-hit brand Rayburn, according to the group.
Rangemaster got off to a sound start, although its tile chain Fired Earth has seen more volatile trading.
It has been slashing costs and introducing new ranges to offset tough conditions sparked by the financial crisis.
The group has trimmed its workforce by a fifth over the past three years.
New products have helped the firm tap into improved consumer markets over the past year, such as more fuel-efficient models and induction cookers.
It is expecting new ranges to have a “substantial impact” this year, while the group added surging oil prices would likely drive greater sales of wood-burning ovens.
Shares leapt 10% today on its results and confident outlook.
Andrew Wade, analyst at Numis Securities, said: “With Aga and Rangemaster both making solid starts to 2011, we expect self-help initiatives to drive progress through the year.”
