A £3.3m fair-value charge relating to the Fired Earth business took the shine off an otherwise good set of financial results for Aga Rangemaster (AGA). The only other bit of bad news was a £4.1m pension charge - up 17 per cent - highlighting Aga's ongoing struggle to contain its pension liabilities.
The pension commitments are substantial for a company of Aga's size. The second-half plunge in gilt yields caused the accounting deficit to double to £72m last year - more than the company's market value. If the existing deficit recovery plan remains in place, Aga will have to pay £4m to the scheme this year and £10m a year thereafter.
Fortunately, the company's operations are recovering along with the UK consumer economy. It sold 9 per cent more Aga heat-storage cookers in 2014 than in 2013, and 6 per cent more Rangemaster ovens. Historically, Aga has found mortgage approvals to be a good lead indicator of business conditions, so an increase in approvals since the start of the year bodes well for 2015 sales. A much-vaunted China launch will also take place at the end of this month.
Numis Securities forecasts full-year pre-tax profit of £13.5m, giving EPS of 14.6p (from £8.5m and 9.3p in 2014).
| AGA RANGEMASTER (AGA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 102p | MARKET VALUE: | £71m | |
| TOUCH: | 101-103p | 12-MONTH HIGH: | 191p | LOW: 95p |
| DIVIDEND YIELD: | nil | PE RATIO: | 1020 | |
| NET ASSET VALUE: | 131p* | NET CASH: | £9.2m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 259 | 19.9 | 20.5 | 1.7 |
| 2011 | 251 | 7.5 | 18.8 | 1.9 |
| 2012 | 245 | 1.7 | 2.3 | nil |
| 2013 | 250 | 1.1 | 1.2 | nil |
| 2014 | 261 | 0.7 | 0.1 | nil |
| % change | +4 | -36 | -92 | - |
Ex-div: na Payment: na *Includes intangible assets of £80.5m, or 116p a share | ||||
