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AGA Aga Rangemaster

184.50
0.00 (0.00%)
Last Updated: 00:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Aga Rangemaster LSE:AGA London Ordinary Share GB00B2QMX606 ORD 46 7/8P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 184.50 - 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

AGA Rangemaster Share Discussion Threads

Showing 876 to 900 of 1000 messages
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DateSubjectAuthorDiscuss
15/5/2015
11:49
Nice little article



"Market conditions suggest 2015 will be a better year for the appliance segment and we are working to 'configure the business best' to take the opportunities that arise”

Nice little tweet

luckymouse
11/5/2015
17:02
Looks a good solid hold and expecting to rise
esavroth1
03/5/2015
14:02
Would be interesting where/or with whom the majority of the pension liability lies. A reduction of that particular segment would change things too.

With every third program on telly being a cooking/baking show its seems daft that these guys haven't really tapped into those millions of foodies with Rangemaster ads in the tea breaks? Are they on the ball? UK growth seems to be coming thro anyway but nice if they could hit it harder.

They have called in Rothschild for a reason - they are going to make a move (sell F.E.) - nice if they can kill two or three birds with one stove. Less pension, less Fired Earth exposure; more China (factory?), more marketing, distribution, more growth exposure.
That would constitute a co makeover at these very O/S levels.

luckymouse
01/5/2015
08:44
I'm sorry, but I did not want to push my luck on the generosity with which the directors were willing to spend time with me so I concentrated on the two issues I thought most germane.

I would like to be corrected here, but I think that the China business is a nice experiment that the company does with small amounts of capital. Nice if it works, but does not break the firm if it does not.
Does anyone have some evidence - I'm working with little data on China.

The China venture does provide yet another indicator of the psychological state of the senior managers. They are not heads-down-concentrate-on-survival mode. They are up-beat-lets-go-out-and-conquer mode. They are very positive. Very proud of the tradition of UK quality manufacturing. This is their time. They have been through the hard times, now lets go.
Glen

profdoc
30/4/2015
17:08
Profdoc,

Did you ask them about China and their move into that market and whether they have brought in any products from Vatti, their partner in China?

trigger blade
30/4/2015
16:51
Some well thought out contributions on this thread. I have been a buyer following the AGM Statement.Surely the market capitalisation is too low for the various brand names . Rothschild should be able to unlock this fairly readily.
look alive
30/4/2015
15:15
As a result of what I heard at AGA’s AGM this morning I have just doubled my shareholding. Following the formalities William McGrath, CEO, was kind enough to spend some time with me discussing the sales of cast iron stoves and Rangemaster.

Later other senior executives were very generous with their time, including the FD, Shaun Smith. I learned a great deal from them. I will not attribute any of the following to any one individual conversation, nor can I be too specific as I do not want to inadvertently betray the trust assumed for our discussions.

However, I can tell you in general terms about the two main points that raised my spirits.
(Earlier posts on AGA: 11th – 17th March

1. Sales trend

I needed to establish in my mind the extent to which the sales drop through the recession was cyclical or structural.

I showed a history of sales units to the directors/managers and invited them to discuss the cyclical/structural question – something they seem to discuss between themselves.

A strong belief emerged that the decline was cyclical and not that AGAs are going out of fashion. I remain somewhat cautious in judging the cyclical/structural split on cast iron, but I’m happy to accept that a fair chunk of the decline was economic cycle related and that a proper bounce back is coming.

Rangemaster has really bounced back.

They seem very excited about the USA operations too.

2. Pension deficit

Whenever I mentioned the pension deficit there was a sense that the financial markets have seriously overreacted.
There are various scenarios to consider but the most likely 9in my opinion) is where the discount rate used for liabilities rises by 2-3% and the deficit is thus eliminated.
I hope this helps. More detail at
Glen

profdoc
30/4/2015
12:44
The business obviously has a future. Surely, more true to say that the foundry is set to secure the future of the pension fund. All IMHO.
shanklin
30/4/2015
12:21
Aga fires up with £4.5 million investment at Telford plant

A multi-million pound investment in Aga's Telford foundry is set to secure the future of the historic site.



Someone has confidence in the future.....

wad collector
30/4/2015
09:21
Previous owner, Glynwed or whatever, completely screwed this co. by saddling it with an enormous pension liability, makes you wonder how it has become such an elephant, were the staff retiring at forty or something, the deficit and scheme are completely out of control withy these low gilt yields, even without them it would be the same!
bookbroker
26/4/2015
23:05
AGA - more ramps than Evel Knievel
roddyb
22/4/2015
11:13
I looked at this one a while back but struggled to see the investment case.
Holders just be aware that as it stands AGA will be relegated out of the FTSE small cap index in June.

salpara111
09/4/2015
15:10
Thanks to all recent posts in particular profdoc and Alphahunter - I was visiting as been on watch list for ages after my broker suggested buying much higher.

However given a significanty probability of a Labour/Scot-Nat coalition, Mansion Tax, Non Dom status abolition and increased higher rate taxes AGA is my hot tip for a major loser as a result of the election.

If by a remote chance (less than say 35% unfortunately imo) we get a business and economy friendly parliament then AGA will be near the top of a possible buy list (All imo etc)

Pensions agreed a major problem and why I have stayed on the side until now.

pugugly
09/4/2015
07:44
Back in with a tentative buy.

I think it has fallen too far since December and I hope it has reached bottom. But it may be a quick in and out.

Lets see what the future holds.

darias
08/4/2015
09:21
I'm worried that the next triennial valuation is due soon and the funding deficit will be significantly bigger (not a surprise) but I suspect that the payment plan into the pension will be increased .i.e. analysts forecasts of 14.2p and 17.8p are looking way too high. I'm tempted to sell until the next lot of news comes along (IMS beginning of May? 1/2 yr report/ pension update August?). Thoughts?
leonmoon
16/3/2015
10:08
Thanks Alphahunter, Glen
profdoc
15/3/2015
09:48
Profdoc,

3Y turnaround plan at Grange:

alphahunter
12/3/2015
11:19
Alphahunter,
Thank you. Some very useful points. Fingers crossed on Grange. It would only take a 10% lift to sales to reach breakeven - feasible.
Fired Earth is now profitable so there are some people out there who do not have our value-investing, bargain-hunting, penny-pinching approach. More fool them, but good for us shareholders!
On the pension: £94m of agreed cash injection over the next 6 year is a lot for such a company to find.
However, it is possible that pension deficits in UK companies are increased because of the weird things going on in the bond markets. My understanding is that if bond yields move back to 4-5% then AGA's pension deficit disappears (or even becomes a surplus). Will the trustees and the regulator still insist on these extra payments then?
Perhaps from a 2015 bond market perspective 4-5% seems a stretch, but historically, in an economy with 2-3% inflation and 2-3% real GDP growth it is far from peculiar. I know there is a risk I'm wrong on this (I would welcome your thoughts) but the upside payoff is so great that I will take the chance.
Glen

profdoc
11/3/2015
15:25
Good piece of work.

I'll be honest, I've spent 90' in total reading the Annual and Interim reports, plus 30' trying to get some company accounts and news from local websites for Grange. My impression is:

There is potentially a large earning swing if Grange can get turned around and it seems that the Co has invested and rationalised a lot their manufacturing operations (local gazette). EUR/USD may help as well.

Tail wind for input cost of cast iron? Must have plummeted.

The Pension deficit is not entirely a red herring, this is real cash that is put up into the scheme in the coming years.

If sold, Fired Earth could alleviate some of the undefunded pension fund.

Mortgage approvals is not a viable leading indicator IMHO, as the products address a niche market. Would property transactions in the Shires or second- house, non-buy-to-let mortages be more telling?

The share price mirror corporate AA bond yield. I am a taker of any downloadable UK corporate AA excel data so that I could plot them against the share price



Mesdeuxsous.


PS: Visited Fired Earth shop in SE3 where I live, tiles way above my budget.
A return flight to Marakech cost £80 (+ decent riad at €100 a night), where quality tiles cost a fraction of what is on offer in my hood.

alphahunter
11/3/2015
10:48
For what it's worth I've written up some notes on AGA - I hope someone may find them useful - sorry they are a bit long. Any thoughts/insights/reflections/contradictions (disconfirming evidence) will be welcome.
Glen
AGA Rangemaster is a manufacturer of prestige range cookers, tiles (Fired Earth) and refrigerators, with a small, but sufficient, degree of customer captivity through brand recognition and trust.
I’m looking at AGA as a company that fits into my 2015 Modified-PER portfolio - a portfolio that contains shares with:
1. A low price relative to the average earnings over at least a 7 year period (cyclically adjusted price earnings ratio, CAPE);
2. Which has a high Piotroski score indicating a recovery in profitability, efficiency and financial structure, and;
3. Reasonable business prospects, management and stability.
There is a worryingly large pension deficit to consider. But I’m prepared to take the chance that this is a red-herring, induced by the actuarial rules and the strange goings-on in the bond markets.
Cyclically adjusted price earnings ratio
To start the analysis I’ve obtained AGA’s profit numbers going back 11 years, giving us a number of pre-recession figures, recession-affected horror years, and the slow climb-out-of-the-hole statistics.
In the numbers shown below I’ve excluded the credits or deductions caused by fluctuations in the actuarial valuation of the defined benefit pension. I’ll talk about this issue a lot more later – our judgement on the pension deficit is crucial to the company valuation process.
Profit after tax (ignoring credits or debits due to defined benefit pension scheme)
2004: £19m (after £10m deduction for now jettisoned ‘Food Service division’)
2005: £24m (after £10m deduction for now jettisoned ‘Food Service division’)
2006: £27m (after £10m deduction for now jettisoned ‘Food Service division’)
2007: £18m (Food Service division sold for £265m, special dividend £55.6m. Between 2001-8 the company returned £614m to shareholders – eight times the current market capitalisation).
2008: £12m
2009: -£1m
2010: -£2m
2011: £10m
2012: £3m
2013: £4m
2014: £7m
Average annual profits after tax = £11m (see Newsletters dated 3rd and 4th February for discussion of using CAPE and mean reversion tendency)
I’m focussing on total profits after tax, rather than earnings per share, because there have been some large changes in the number of shares in issue over the years. For example, in 2006 there were 129.1m shares, followed by share consolidations (and large pay outs for shareholders).
Today, the market capitalisation is £69.3m (69.3m shares at £1).
As a multiple of average after-tax profit this is 6.3 – a cyclically adjusted price to earnings ratio of under 7 can be considered low, compared with the vast majority of companies on the stock market (around 13).
The UK accounts for 66% of AGA’s sales, and Ireland for another large chunk. The economic boom and bust in the UK and Ireland is clearly evident in the profit history.
The company says that “sales in our core markets are linked to the level of housing transactions”.
This is evidenced in the following set of numbers – the sales of (a) Cast Iron products, consisting of AGA, Rayburn and Stanley stoves, and of (b) Rangemaster stoves (Rangemaster, Falcon, Mercury (UK), La Cornue (France), Waterford (Ireland), AGA Marvel (US).
Number of units sold
2007: Cast Iron 19,600 Rangemaster 76,000
2008: Cast Iron 16,000 Rangemaster 76,000
2009: Cast Iron 12,100 Rangemaster 60,600
2010: Cast Iron 11,650 Rangemaster 63,900
2011: Cast Iron 11,000 Rangemaster 62,000
2012: Cast Iron 10,300 Rangemaster 60,000
2013: Cast Iron 10,000 Rangemaster 60,500
2014: Cast Iron: AGAs up 9%, but Rayburn/tanley ‘declined’,Rangemaster 64,000
In 2014 the number of mortgage approvals was much the same as 2013 – so it has still not taken off.

The pattern may not be entirely explained by the macroeconomic slide – perhaps managers lost their way – but I’m prepared to venture that much of the decline, particularly of the more expensive lines, is due to the economic environment. When the economy improves, where do volumes go?
Note the high operational gearing for this company. In other words, a high proportion of its costs are fixed even as volume of output rises. Therefore, increased sales feeds disproportionately into profits.
For the cheaper stoves in the Rangemaster division the company has a roughly 50% market share.
Typical retail selling price
Rangemaster £1-2,000
Mercury and Falcon £2,400 - £4,500
Redfyre, Rayburn and Stanley £4-7,000
AGA £5-12,000
La Cornue £5-100,000

Other products
• Refrigeration, Dishwasher, Sinks: AGA Marvel (US) manufactures under-counter wine and ice makers. Other Rangemaster and Falcon refrigeration is outsourced as are AGA branded refrigeration products and dishwashers. Sinks are manufactured by AGA Rangemaster in the UK.
• Fired Earth: premium tiles and paints
• Grange: kitchen & bathroom furniture sold through its 66 stores whilst Grange has a network of c400 dealers worldwide for its premium furniture range.
• Aga Cookware: From cast iron pots to tableware. One-third of sales are online.
In the next Newsletter ( I’ll examine AGA using Piotroski factors. On Friday I’ll take a closer look at its business and managers, and on Monday and Tuesday I’ll look at the pension deficit and draw my conclusions.

profdoc
09/3/2015
08:27
That's my interpretation. It's not accounting trickery, but what is required from the new generation of illogical accounting standards which place a higher degree of importance on book values rather than cash - and I say that as an accountant. But I agree they could have explained it better.
18bt
07/3/2015
12:14
thanks 18BT, yes, I pulled mine from Torygraph, not RNS..

So in essence they decided that Fired Earth was undervalued (so increased its Fair Value)
This valued mgmt's stake of 19.9% @ £3.3m
Of this £1.1m was directed via P&L to MGMT.

I've no doubt its my inability to fathom it.. but it looks like accounting trickery, and is in any case not very transparent.

rimmy2000
07/3/2015
11:51
Actual statement reads: "A fair value charge of GBP3.3 million arises from a provision for a 'cash settled share based payment' in respect of incentive arrangements with the management of Fired Earth. Of this, GBP1.1 million was paid in January 2015. The GBP3.3 million represented the value placed on management's 19.9% holding at the balance sheet date. This values Fired Earth, including an inter-company loan, at over GBP20 million". As I read this, they re-valued upwards the shareholding in Fired Earth, which led to an increase in the management's equity, which will be bought out in future, so it went through P&L. However, only £1.1m was actually paid to management, the remainder is the increase in value of their remaining stake. But I agree this isn't very clear.
18bt
07/3/2015
11:27
Can someone help me understand this paragraph from results:

"Despite the positive trend, pre-tax profits fell from £1.1m last year to just £700,000 as the business took a £3.3m hit on its Fired Earth tiles and homewares unit.
The company said that despite its strategy of concentrating on its core cooking and refrigeration brands, it decided against selling Fired Earth during the year. Instead, the company said it determined the “best option was to extend existing arrangements with management, acquire a portion of management’s shareholding and allow the benefit of work carried out to be clearer in its impact”."

So management were paid £3.3m for their stake in Fired Earth? Looks shady, unless I am mis-reading it? £3.3m went against Exceptionals.

Someone care to explain this?

rimmy2000
06/3/2015
15:06
Pension fund liability to sap any money in the years ahead.
nick rubens
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