Recession turns up heat under Aga manufacturer

Mar 13 2010 by Iain Laing, The Journal

THE maker of iconic cast iron Aga cookers has seen annual profits slump to less than £1m as the recession continued to impact on large household spends.

Aga Rangemaster sold 12,150 cookers in 2009, compared with 15,400 in 2008, but signalled it was hopeful of “real improvement” in 2010 as it looks to build on the recovery in sales seen in the second half of last year.

The company said that, while the recent cold weather may have slowed short-term activity, home survey numbers were ahead of 2009 as the conditions highlighted the benefits of its heat storage and stove products.

Chief executive William McGrath added: “Our lead indicators are positive and, after a slow order intake at the start of the year, prospects are encouraging heading into the spring.”

Pre-tax profits slumped to £500,000 in 2009, down from £14.4m a year earlier after revenues declined by 12.3% to £245m. At an operating level, the company reported a loss of £1.5m.

The peak of the recession in early 2009 meant first-half sales were down by 18.8%, before strengthening in the second half with a drop of 5.3%. Aga, which generates around a third of its revenue from overseas, said it reduced head count by a further 200 people to below 2,600, following on from a reduction of around 400 in 2008.

It said its ongoing focus on working capital management meant cash balances increased to £28m from £5.8m over the year.