More on Aga Foodservice
Aga: Trading statement
Aga Foodservices said trading in the first six months to June 2005 has been good despite slowing consumer spending.
Aga has reportedly had a “record” first half in the consumer market (which accounts for about 55% of its profits) with new product launches (electric and 3-oven Agas) helping to maintain sales volumes. UK consumer sales were flat but exports have grown rapidly. Exports now make up a quarter of Aga’s consumer sales.
Foodservice sales have improved gradually after a slow start to the year. A change in the structure of its European operations, brining all business under a single structure is reportedly paying off with both product and production benefits. A new product, the Infinity Fryer which avoids toxins caused by overcooking food through filtration and other controls is selling well.
The company said profits for the half year would be ahead of 2004 (on an IFRS basis) and in line with expectations. (The half year IFRS pre-tax profit for 2004 is expected to be £15.5m compared with £12.7m under UK GAAP). The company expects to meet profit targets for the full year.
The company seems to be performing well but slowing consumer markets are a worry. Aga hints at an acquisition saying it will “continue to take opportunities to strengthen its operations by acquiring complementary
businesses” and may provide further upside.
The share trades at 318.5p on a prospective PE of 11x, within the sector range. The yield is 3.2%
Random picks: Abbot | Antofagasta | Compass | Easyjet | National Grid | St James Place | Whitbread | DS Smith | Anglo American | Brambles