Encouraging progress in key parts of the Group was offset by the tough market conditions which affected, in particular, AGA’s Irish operations and the Grange home furnishings business. A strong May followed by a quiet June reflected the patchy nature of the consumer markets. In the first half overall revenues and operating profits excluding property profits were slightly lower. However, the Group continues to expect revenue and profit growth for the full year as the product and cost initiatives work through.
AGA cast iron cooker growth of 4% reflects the successful introduction of `Total Control' while International displays of ‘Total Control’ installed during the first half are expected to benefit the second half. Sales in Ireland fell further in very weak markets. Rangemaster, the UK's leading range cooker producer, saw UK cooker volumes a little lower while exports to the continent continued to grow. Sink sales volumes, which link to housing completions, were up. Fired Earth saw sales up over 6% with better performance across its product categories as its turnaround continues.
The North American operation, AGA Marvel, saw new ranges of refrigeration products being established in the market. These sales to date are replacing sales to one major customer. Grange home furnishings had a further difficult time in North America and revenue and cost initiatives continue to be focused on returning the overall Grange operation to profitability.
Discussions about the funding needs of the Pension Scheme on an actuarial basis continue with the Trustee of the Scheme and its advisers. The Scheme was fully funded on an accounting basis at 31st December 2011. A clear, stable medium term framework for the Scheme will be set out as soon as possible.
Cash continues to be closely managed. After payments made as part of the German litigation settlement announced in March, increased Pension Scheme funding payments, the funding of international expansion and the usual seasonal working capital movements, net cash balances at the half year were around GBP12 million.
William McGrath, Chief Executive, commented: "Our performance has been sound in a tough first half. We have tremendous brands led by our re-energised AGA ranges and key product lines are starting to gain momentum. International sales growth remains a central objective. This will become clearer in a year in which we expect further progress."