Aga fired up by market recovery
on 21/08/2013 10:08:30
The group behind the distinctive Aga ovens said the "tide is turning" as house sales gather pace, boosted by government schemes to increase mortgage availability and the recently launched Help to Buy initiative.
Aga Rangemaster said it was on track to post a full year profit after a sales recovery since since April, following a slow start to the year.
Sales fell 4% in the first three months of 2013, but jumped by 5% in the second quarter and Aga said it expects demand to continue rising as housing markets improve in both the UK and the US.
Its floor tiles specialist business Fired Earth also delivered its first operating profit since the recession after sales rose 5% in the half year.
William McGrath, chief executive of Aga Rangemaster, said: "The tide is turning, the mood amongst our customers is better and there is a buzz about our new products."
The Leamington Spa-based firm said pension fund accounting changes and one-off costs dragged it deeper into the red in the first half, with losses widening to £2.4 million from £1.4 million a year earlier.
But operating profits held firm at £1.5 million after revenues edged up to £119.5 million.
Aga has suffered tough trading since the financial crisis saw people rein in spending on big ticket items and as mortgage approvals dried up.
It has slashed costs to offset the sales woes and invested in new products, such as iTotal Control electric Aga models, which can be controlled remotely by smartphone.
Aga's interim sales rose 8%, helped by demand for the new electric model ranges, which now account for more than 30% of all Aga sales.
Rayburn sales edged higher, although Stanley suffered further declines and Rangemaster saw a 4% fall as competitors cut prices.
Rangemaster sales have since started to improve, according to the group.
The group added that its AGA Marvel business in North America saw an "encouraging" performance thanks to a rise in US house sales.
Shares rose more than 4% and analysts at N+1 Singer said the recent sales turnaround "bodes well as general housing related activity gathers pace in the UK".