Iconic cooker manufacturer Aga said it appears the tide is finally turning after the housing downturn severely impacted on the company’s fortunes.
The firm posted a £2.4 million loss for the half-year period to June 30 but was upbeat in its assessment of its trading prospects.
Demand for the company’s range cookers fell off as the housing market on both sides of the Atlantic hit the buffers following the financial crisis which struck in 2008.
Aga has since struggled against a market in which cost-conscious consumers with less disposable income at their fingertips were shying away from what were seen as luxury purchases in favour of more standard goods.
However, the company said it had started to see signs of a recovery, with stronger sales starting to come through in the second quarter of this year.
The firm pointed out that its first-half pre-tax result included a £1.8m payment related to pension charges and a further £1.4m of non-recurring costs, and said group operating profits in the period were a positive £1.5m.
“Ever since the UK and US housing market downturn led to sharp falls in appliance sales, trading conditions have been difficult,” the company said in its interim update to the stock exchange on Wednesday.
“We have cut costs and continue with a series of efficiency and rationalisation programmes.
“We, however, have importantly kept investing in products and in our brands and these have been behind our continuing progress for the business,” the firm said.
“As the tide turns, we now feel that our major markets in the UK and North America will provide buoyancy and sales.”
The company said it had developed a new generation of electric Aga cookers which it expected would bring a “step change” in performance.
“We intend to support them with a sustained marketing effort in the UK, where existing owners trading up are a key market, and in new markets where brand recognition may be high but knowledge of the current product strengths islimited.
“The year-on-year improvements in order volumes have continued since the half year.”
Overall group revenues were marginally higher at £119.5m compared with £119.2m in the same period last year, while the operating profit return was identical to the year before.
The company said restructuring costs which related to operations in Ireland and North America would reach £2m this year, while Aga’s finance costs have increased by £500,000 as a result of higher charges on its new three-year banking facility agreed at the end of last year.
The firm confirmed it would not be paying an interim dividend.
However, the company said it was positive about future trading.
“Encouraging performances were seen, notably in North America from Aga Marvel and from Fired Earth, which made an operating profit for the first time for some years.
“While the start of the year saw trading down in the UK range cooker market, we expect the positive current trends to bring a better second half to the year.”